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Ellen

Ellen Garber Bronfeld

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Arc Capitol Update

The Arc of Illinois

January 6, 2011

Leaders in The Arc:

Phil Milsk, our Governmental Affairs Consultant, provides us with this update on

activities in the Capitol.

1. Taxes

We haven't seen an income tax bill yet, but some members have told us they are

expecting a bill that would increase the personal income tax from 3% to 5%. It

could be temporary (2 -5 years?) or " permanent " (meaning no sunset). The roll

calls in each chamber are still iffy, so it doesn't hurt for our folks to

continue calling their reps and senators. Call their Springfield offices.

Just say please vote " yes " to raise the income tax and that we need new revenues

to fund vital services and we cannot cut our way out of this fiscal disaster.

Tuesday the Senate Executive Committee approved 2 bills with fiscal impact: (1)

SB 3514, was approved by a partisan roll call vote of 8-5. If passed and signed

into law, this would authorize $4 billion in pension obligation bonds. It

expands the State's indebtedness, but also relieves the burden of paying the

pension payment out of GRF or not paying it at all, which would require

legislation and just kicks the can down the road. (2) HB 3659, Senate Amendment

3, was approved 12-0-1 by the committee. It is intended to facilitate the

collection of use tax on goods purchased via the internet from out of state

vendors who do sufficient business in Illinois to give them the requisite

constitutional " nexus " in order for the tax to be legal. I've heard estimates

this could raise anywhere from $200 million to $2 billion/year.

2. Political " Cover " for a Tax Increase

Democrats are trying to move measures that would give them political cover for

a tax increase vote. (1) Medicaid " reform " passed the Senate last night 58-0.

We know most if not all of the elements of it. Most of the bill was negotiated

by Sen. Steans and Sen. Righter. On the long-term care side, there's a section

on " re-balancing " that I think is OK. It talks about unified budgeting for

long-term care and allowing up to 4% transfer authority (say, for example, if

the Governor wants to move money from the Department on Aging to DHS to expand

community based services for persons with DD, he could do so up to 4% of the

specific line he's moving if the HFS Director certifies the need. Righter's

changes clarified that SODCs are included. Still no definitions of " community "

and " institutions " , but I think we go with federal definitions. The intent is

clear. Monies can only go one way, from institutional care to community care.

Some bad stuff on All Kids.

(2) HJRCA 61(Taxpayer Bill of Rights) is a proposed constitutional amendment

that would mandate a cap on total annual GRF appropriations equal to the

previous year's total starting in FY 2014. If it passes both houses it would go

on the ballot in 2012. I really dislike this, but easy to sell to voters who

are fed up with politicians and government. I look at this as Prop 13 for

State Government. Colorado passed a similar measure in 1995 and it almost

ruined its education system. The only exception would be if the Governor

declares a fiscal emergency ratified by the Comptroller and the Treasurer.

Speaker Madigan is sponsoring the measure and wants to pass it. It's terrible

policy and we should be getting calls into House members to vote " no " .

3. Death Penalty Abolition

We've worked on death penalty issues before and there's a bill that would

abolish the death penalty in Illinois and create a new fund for services to

victims' families with some of the savings realized. Despite the Supreme

Court's decision declaring the death penalty unconstitutional for persons with

cognitive disabilities, the reality is that many individuals on death row have

some type of disability including undiagnosed cognitive disabilities. Rep

Yarbrough is the sponsor and they are a handful of votes away from calling the

bill in the House. Targets include Moffitt, Coulson, J. Gordon. We should

support this bill.

That's pretty much it for now. Will keep you posted.

Phil

See story below on Speaker Madigans efforts on the income tax increase.

Make sure your make your calls to support new revenue today!

Tony auski

The Arc of Illinois

815-464-1832

Democratic leaders push for income-tax compromise

Madigan visits state Senate floor to press for tax hike

By Ray Long and , Tribune reporters

10:24 PM CST, January 5, 2011

SPRINGFIELD House Speaker Madigan took the rare step Wednesday of

walking the floor of the Senate to garner support for a major income-tax

increase, a move some Democratic lawmakers hope will lead to a compromise as a

lame-duck session draws to a close.

The lobbying effort unfolded as the Senate overwhelmingly approved reforms in

the state's expensive Medicaid program that are aimed at consolidating health

care, cutting fraud and waste, and saving money.

Madigan, who is also Illinois Democratic Party chairman, joined Senate President

Cullerton in fanning out on the Democratic side of the full Senate shortly

after the two Chicago powerhouses emerged from a closed-door summit with Gov.

Pat Quinn, a longtime booster of an income tax hike.

The plan would raise the personal income tax rate to 5 percent from 3 percent,

potentially for two to five years, largely to stabilize the state's woeful

budget. Lawmakers also would raise the personal income tax an additional

one-quarter to one-half percentage point beyond that to borrow money to start

paying down a multibillion-dollar backlog of bills.

But several Democratic senators are unhappy because they're being asked to vote

for a tax hike that would not provide more money for schools or property tax

relief. A similar 67 percent hike in the income tax rate the Senate approved in

May 2009 would have done just that and more. But that plan stalled in the House.

" What we're indeed asking people to do now is to pay more money but not receive

any of the benefits other than us paying down our debts, " said Sen. Meeks,

D-Chicago, who championed the earlier proposal. " If we act now but we don't

include any property tax relief, or any money for education, it is the fear of

some of ours that we'll never get around to it.

" If that's the proposal on the table, from my perspective, it's unacceptable, "

said Meeks before Madigan stopped by his desk.

Madigan made the point to senators that Illinois needs to get its finances in

order, pay the backlog of bills, and improve a credit rating that is so low it

is costing the state more to borrow money, according to several lawmakers.

" This is Madigan's, certainly his way of telling you that, 'something has to be

done, and I'm going to be the one to do it,' " said Sen. Lou Viverito, D-

Burbank, a longtime Madigan ally who spoke to the speaker for several minutes.

Viverito said he is hopeful Madigan can craft a compromise plan that would be

accepted in the Senate, possibly with some of the components of the version that

previously passed the chamber.

Cullerton said the parties in negotiations are " very close " but still needed to

reach an overall framework.

After exiting the Senate, Madigan declined to give specifics or to predict if

the House would vote this week. He placed the blame on Republican lawmakers who

have shown little interest in jumping aboard a tax increase proposal.

" They are continuing on a campaign plan which means they are not participating

in governmental decisions, " Madigan said.

No votes were taken on a tax hike Wednesday, but the Senate did agree 58-0 on

Medicaid reforms long sought by Republicans.

Under the legislation, Medicaid applicants would be required to prove Illinois

residency and show one month's income before they could sign up. Recipients

would no longer be automatically re-enrolled and those abusing the system could

face a $2,000 fine.

Income limits would also be put in place for the All Kids health insurance

program $66,150 for a family of four. Officials said the limit would result in

about 3,100 children losing coverage.

Senate Republican leader Radogno said she is happy with movement on

Medicaid reforms, but is waiting on changes to workers' compensation laws and

the education system before she would consider a tax increase.

" We did try to help them from getting into this mess in the first place, " said

Radogno, of Lemont. " Democrats have been in place for eight years; they have

created this hole, and if they feel the way out of it is a tax increase, they

have the votes to pass it. "

rlong@...

mcgarcia@...

Copyright 2011, Chicago Tribune

www.chicagotribune.com/news/local/ct-met-illinois-legislature-0106-20110105,0,28\

52495.story

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