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Legislative Action Special Section

Not all was shelved 'til next session


When the Illinois House of Representatives adjourned at 5 a.m. on June 30, state lawmakers concluded their spring session at the earliest time since 1970. Not only did lawmakers leave early they worked slowly. The pace of the spring session was among the slowest in memory, and only in its final hours did a few elements of drama emerge.

The reasons for the inactivity were both financial and political. First, there was no money to spend without raising taxes, and virtually no one wanted to do that. Second, elections loom in November for all 118 House members and 20 members of the Senate. Because the elections are the last before 1991's redistricting, lawmakers were especially reluctant to take controversial positions. Further complicating the picture is the impending departure of Gov. James R. Thompson after 14 years in office, whose lame-duck status weakened his bargaining position.

The session started with a waiting list of items that called for legislative attention: property tax relief/reform; expansion of Chicago's McCormick Place Convention Center including the construction of a domed stadium for the Chicago Bears' football team; and Illinois' reaction to U.S. Supreme Court rulings that allow new state regulation of abortions. A few new initiatives surfaced late in the session. One was state assistance to help build five marinas, including one at Navy Pier in Chicago. A second was a proposal to spend $350 million downstate in water supply projects and school construction projects. Lawmakers shelved both initiatives.

But not everything got shelved or postponed. Lawmakers found money to fund a new contract for Chicago teachers. They took the first steps towards assisting East St. Louis. They averted, temporarily, the closing of Department of Employment Security offices.

Finding money to pay salary increases for Chicago teachers and thus ensuring that schools open in Chicago this fall was one of the big accomplishments. Chicago teachers and the Chicago Board of Education had negotiated a three-year contract with 7 percent annual raises, but the money for the raises was lacking. Lawmakers found $66 million from two sources. They freed up $51 million through a creative financing scheme that permits revenue from a .26 percent Chicago property tax levy for paying teacher pensions to be used instead for general school purposes — to pay for salaries. They freed another $ 15 million from another local property tax levy — that levied by Chicago's School Finance Authority which no longer needs its property tax revenue to repay bonds that were issued in 1979 to bail out the Chicago schools in an earlier crisis.

The pension portion of S.B. 1591 was complex. The measure would require that the state be responsible for contributions to the Chicago Teachers' Pension Fund and to make contributions at the same rate that it does for the downstate teachers' system. In so doing the state would assume the Chicago system's $1.4 billion unfunded liability.

To gain the support of Chicago teachers, who would see the immediate salary increases on the one hand and a more poorly funded pensions system on the other, lawmakers allowed Chicago teachers to retire at age 55 instead of 60. Downstate teachers promptly protested but dropped their opposition when they too were allowed to retire at 55.

A special section of the bill to benefit Chicago General Supt. of Schools Ted Kimbrough complicated passage in the Senate. Kimbrough needed 18 hours of graduate work to earn his Illinois administrator's certificate. The bill waived the certification requirement for Kimbrough's current term. Sen. Howard Brookins (D-18, Chicago) refused to vote for the measure because of Kimbrough: "I am saying to you he has fired people in the Board of Education who have more qualifications than he does.'' Brookins was persuaded to change his mind and ultimately voted for the plan.

Republicans complained about the precedent of robbing pension funds and suggested the matter should have come up before the 11 th hour. "One time during this session do what's right," Senate Minority Leader James "Pate" Philip (R-23, Wood Dale) urged his colleagues. Senate President Philip J. Rock (D-8, Oak Park) meanwhile argued that the measure was the only one available to open Chicago schools.

The measure cleared the Senate with the bare 30-vote required majority. It was one of the last issues considered in the House, and House Speaker Michael J. Madigan (D-30, Chicago) wandered the floor to round up the 60th vote.

But the bailout did not get by Thompson as passed. Thompson used his amendatory veto on August 16 to strike state assumption of the Chicago pension system and the lower retirement age for all teachers. The governor calculated that the reduced retirement age would increase the liability of teacher pension systems by $500 million. Adding the $1.4 billion in unfunded obligations owed by Chicago, he put obligations assumed by the state under S.B. 1591 at nearly $2 billion. "Because this bill was more than a bailout for Chicago schools, I approved only the portions that will help Chicago schools," Thompson said in making his amendatory veto.

Thompson's amendatory revisions will be considered by lawmakers when they return to Springfield in November. A three-fifths vote is needed to either override Thompson's changes or to accept them and be effective this fall. A simple majority acceptance delays the effectiveness until July 1, 1991. Thompson has pledged to work to round up Republican votes to make the revised measure immediately effective.

Speaker Madigan was likewise the key player in help for financially beleaguered East St. Louis.

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Legislative Action Special Section

Marathon negotiations in Madigan's office yielded a plan that included $34 million in loans for the hard-pressed city and a new outside oversight of city finances. Rep. Wyvetter Younge (D-l13, East St. Louis) resisted the oversight but finally acceeded to it. Speaker Madigan declined to push the bailout until Younge acquiesced to its conditions.

The money comes from bonds to be sold by the Illinois Development Finance Authority. Funds can be used by East St. Louis to reorganize debt and maintain operations. The payments on the bonds must be made by East St. Louis.

The oversight comes from a five-member Financial Advisory Authority whose members are appointed by the governor and confirmed by the Senate. The authority must approve both a three-year financial plan and annual budgets. It has the power to reject city contracts.

Failure by the city to make bond payments, to balance its budget or to produce an acceptable financial plan triggers a provision to allow the authority to intercept state payments to the city. The authority continues in existence until the city budget has been balanced for 10 years. Development Finance Authority involvement continues until repayment of all bonds.

As part of the package lawmakers also decreed that if a qualified applicant proposes to dock a riverboat in East St. Louis, he shall be given one of the five licenses to be allocated this year. The operations of the floating casino could give the East St. Louis economy a boost and provide more money for the city.

Lawmakers also provided, albeit temporarily, relief for the financially distressed Illinois Department of Employment Security (IDES). Business, labor and government agreed to the bailout on June 28. All parties blamed the problem on the federal government, which has been holding federal unemployment insurance taxes to offset the budget deficit.

Thompson had proposed to close the gap with a .1 percent increase in employers' tax rates to a maximum of $9 per employee. Business interests had opposed the increase, and lawmakers were unwilling to consider any tax increases. Without new money IDES said it would have to close 20 of its 63 full-service offices, shutdown 96 outreach offices and lay off at least 200 employees.

The accord calls for using $7 million in unemployment insurance (UI) taxes for operations and for suspending $2 million earmarked in fiscal year 1991 for legal services to small employers and claimants. But all parties recognized that the solution was only temporary; in fiscal year 1992 the shortfall will rise to $30 million.

"This difficult situation would have been avoided if the Congress used federal UI tax dollars for the purpose they were collected," said Lester W. Brann Jr., president of the Illinois State Chamber of Commerce. Richard J. Walsh, president of the Illinois State AFL-CIO, noted, "This is a band-aid solution, at best. This problem is not the fault of Illinois workers, business or government." The solution also preserves $71 million in unemployment insurance tax cuts for employers and 4.6 percent benefit increases, both resulting from the 1987 reform package.

The big ticket failure was the $1.4 billion expansion of Chicago's McCormick Place Convention Center, including a domed stadium for the Bears. Officials of the Metropolitan Pier and Exposition Authority, which runs McCormick Place, argue that without new facilities the huge Chicago convention center is in danger of losing its preeminent place. Authority executives also argued that state and local tax revenues would drop without the expansion but increase with it.

Although the project was dubbed McDome, authority officials downplayed the Bears' domed stadium. They argue that the Bears represented a way to hold down costs of building the facility. They had reached agreement with the Bears on $8 million in annual lease payments by the team to defray the stadium cost.

But the project hit snags. The first was the climate of the session. Lawmakers were hard at work trimming money from state service budgets. They were not inclined to be tagged as favoring the Chicago Bears while condemning human services.

Also causing problems was the question of increasing statewide taxes for a facility that benefitted Chicago. Initial proposals called for increases in statewide taxes on car rentals and hotel rooms. Later revisions relied on Chicago area taxes but left open the question of whether those revenues would be sufficient and if not, whether a subsidy from general state taxes would be necessary.

Finally, there was the question of political support. Gov. Thompson pushed the project but as a lame duck with little clout. Chicago Mayor Richard M. Daley declared that he was neutral on the matter. To pass a project of that size requires mayoral support, not mayoral neutrality.

Although McDome failed in the spring session, no one believes it is dead. Efforts to revive the program are anticipated in the fall veto session, which will convene after the November election but before the Chicago 1991 mayoral election.

McDome itself spawned another spending initiative, this one for downstate Illinois. A package of water supply and school construction projects was assembled as the downstate offset to the McDome project. Then, with McDome dead in the water, the proponents decided to push the downstate projects anyway.

McDome itself spawned another spending initiative, this one for downstate Illinois

Sen. Vince Demuzio (D-49, Carlinville) and Sen. Denny Jacobs (D-36, East Moline) popped the plan on June 29. Their plan called for selling $350 million in bonds over several years. The bonds would be repaid with money raised by the change in the state sales tax this year, a reform that imposed 1.25 percent higher taxes on goods purchased out-of-state. That money had been earmarked for downstate sewage treatment projects but would support more bonds; any excess would otherwise be returned to the general funds.

The Jacobs and Demuzio plan would have provided $250 million for downstate cities who were having trouble with contaminated water, low pressure or drought-related supply problems. The money would be allocated by the Department of Commerce and Community Affairs which would run the loan and grant program. The Illinois Environmental Protection Agency identified 164 communities with serious

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water supply problems.

The remaining $100 million would have been available for elementary and secondary school construction under a program to have been administered by the State Board of Education. Dcmuzio said priorities would have gone to buildings with health and safety problems, such as asbestos, to districts that wanted to consolidate and to districts where enrollment growth was causing crowding.

The measure passed the Senate without a "nay" vote. In the House the measure never got called. "Chicago got everything; downstate got nothing," Demuzio complained. But when McDome reappears, expect to see the downstate projects re-emerge like the fabled Cheshire cat.

Another 11th-hour capital project, this one to spend $70 million to build marinas around Illinois, met the same fate as the other downstate projects. The administration proposal that surfaced on June 29 would have allocated $40 million to Chicago's Navy Pier, $10 million to East Peoria. $5 million to Alton, $5 million to Joliet and $10 million to Steamboat Basin. The Senate appropriations committees, viewing the bill for the first time, debated where Steamboat Basin was located. Eventually they discovered it was at the west end of the Illinois and Michigan Canal. The Senate ultimately rejected the plan.

Lawmakers were spared votes on other, more controversial, measures. New restrictions on abortion permitted under the U.S. Supreme Court's Webster decision were left stalled in committee. Lawmakers will not tangle with that issue until after the November election.

State lawmakers moved ahead on a couple of fronts in the war on drugs. The Drug-Free Workplace Act cleared the General Assembly by overwhelming margins and on August 20 was awaiting gubernatorial action. The bill applies to companies with contracts of $5,000 or more with the state which employ 25 or more workers.

The measure first requires such companies to establish policies against employee distribution and use of drugs at work along with penalties for violation. Next it would require that workers be warned of the dangers of drug abuse and informed of available counseling and treatment programs. And companies must help workers select such programs.

Lawmakers also enacted new penalties for sale of drug paraphernalia, items such as water pipes or coccaine spoons. Under S.B. 1456 the penalty would be hiked from a business offense to a class four felony. Sale of devices to a minor would be increased from a class four to a class three felony. Thompson amendatorily vetoed the measure to remove a $10,000 cap in the fine structure, providing instead to retain the existing $1,000 per item fine and setting that as the minimum fine to be assessed.

Lawmakers were spared votes on other, more controversial measures

Lawmakers also found money in the session's closing hours to bolster the state's sagging trauma network. The emergency rooms of hospitals within the trauma network provide highly specialized treatment for victims of automobile accidents, gunshot wounds and heart attacks. The high cost of providing the specialized care had caused four Chicago hospitals to drop out of the system in the last three years.

Lawmakers addressed the relatively small but highly visibile piece of the health care crisis when they allocated $5 million for the most specialized trauma centers. The grants will be split among hospitals based on the number of low-income patients, the severity of injuries and the hospital's financial need. Approximately $3 million will go to four Chicago hospitals while the balance will be split among 12 suburban and downstate hospitals.

State-chartered banks can open additional branches under a measure approved by lawmakers and signed by the governor. S.B. 1488 (Public Act 86-1178) increases the number of branches that a state bank can operate. In signing the new law Thompson said that it would prevent federally chartered banks from gaining a competitive edge over state-chartered banks.

Business interests saw one major victory in the legislature. They won lawmakers' approval of a plan to allow small businesses to buy "no frills" health insurance. By easing requirements on what must be included in such plans —dropping for example required coverages for alcoholism treatment — in theory more businesses will be able to provide the coverage. Mammography screening for breast cancer is a required part of these plans. The bill applies to businesses with less than 25 workers that have not offered health insurance in the last year.

Business lost but labor won, again, on the issue of family leave. Lawmakers re-passed a measure that allows workers up to eight weeks of unpaid leave for illness and/or family medical emergencies. Lawmakers had passed the Family Responsibility and Medical Leave Act in 1989, only to see it vetoed by the governor. Business wants to see a repeat of that gubernatorial action.

Thompson's promised veto of family leaves guarantees another revisitation of that issue. None of the other unresolved issues will go away either. Already the issues are coming into focus for the lawmakers next session in Springfield. The expansion of McCormick place for Chicago and water supply projects for down-state are an obvious trade-off.

One other issue looms large on lawmakers' agenda. Pressure is building to do something about disparities between what is spent to educate children in "rich" and "poor" school districts. The promise of a lawsuit challenging Illinois' current school finance system may spur preemptive action on the equity issue.

There is also the big "T" issue, extension of the income tax surcharge. Lawmakers will have to decide whether to extend all or part of the temporary income tax increase which will expire on June 30, 1991. Half of the revenues are used for education; the other half go directly to all city and county governments. Premonitions of that battle pervaded the spring legislative session.

School finance, property tax reform and the tax extension are incredibly complex issues. At the same time one basic question underrides all three: Should property-tax-dependent local governments in Illinois be shifted to a more general tax and in the trade lose some control to state government? That touches a great many Illinoisans and so generates a great deal of legislative interest. Look for attempts to tie together solutions to the three big issues.

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