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Legislative update: Budget, pension, Medicaid await Illinois General Assembly before May 31

May 15, 2012
Lori Clark

Lori Clark

In Springfield …

With only three weeks left before the scheduled May 31 adjournment of the Illinois General Assembly, there are three major issues still unresolved: the Fiscal Year 2013 budget, pension stabilization and Medicaid reform.

FY2013 Budget

The House Higher Education Appropriations Committee has been meeting frequently over the past several weeks to determine how to reduce the FY13 higher education appropriations by approximately $113 million, or 6.14 percent over FY12 base funding. This is the appropriation level that was allocated for higher education in both the House and the Senate.

Members of the committee are likely to pass an appropriations bill out of committee this week and send it to the full House. It is anticipated that the Senate will concur with most of the House appropriations, so we should have a good indication of the severity of the reductions in the near future.

Retiree Health Care Benefits

Senate Bill 1313 was passed out of the House with 74 votes (60 were needed for passage) Wednesday, May 9, and out of the Senate with 31 votes (30 were needed for passage) Thursday, May 10. The bill now goes to Gov. Pat Quinn, who has indicated that he will sign it into law.

This bill eliminates the current system of health benefits for retired state employees, including university retirees. The current system provides retirees with “free” health care after 20 years of service.

While state insurance for retirees will still be available, existing and future retirees will now have to pay a monthly premium for this insurance. The director of the Department of Central Management Services has been charged with the responsibility of establishing the level of these annual premiums. It is anticipated that there will be a formula that takes into account age (and Medicare eligibility), length of service and ability to pay.

This change will take effect July 1, 2012.

State-Supported Pension Systems

There is an increasing likelihood that some type of pension stabilization efforts will be voted on during the next three weeks.

Numerous business groups, as well as Chicago Mayor Rahm Emanuel and other suburban mayors, are publicly calling for changes to the existing state-supported pension systems. Gov. Quinn’s Pension Working Group continues to meet, and there are new amendments being added to existing bills that would significantly alter the systems.

Legislative leaders and the governor also are meeting with key stakeholders.

On Friday, May 11, House Speaker Michael Madigan introduced three amendments to House Bill 3637 that will transfer the responsibility of annual contributions to the pension costs for teachers in the Teachers’ Retirement System away from the state to the Personal Property Replacement Tax. These amendments will be heard Wednesday in the House Executive Committee meeting.

College Illinois! Audit

The auditor general released a scathing audit of the College Illinois! program administered by the Illinois Student Assistance Commission (ISAC). The audit cited conflicts of interest where ISAC employees benefited financially from investing in companies doing business with the state, as well as questionable investments.

Auditor General William G. Holland has referred this audit to the Illinois Office of Executive Inspector General for consideration and possible follow-up.

It is important to note that there have been significant personnel and leadership changes at ISAC over the last year. Eric Zarnikow, the new ISAC executive director, has issued a statement on the future of the College Illinois! program following the audit.

Monetary Assistance Program Task Force

Senate Joint Resolution 69, sponsored by Sen. Edward Maloney and Rep. Daniel Biss, was unanimously adopted by the Senate last week.

Currently assigned to the House Higher Education Committee, it requires ISAC to convene a task force to deliberate options for the adoption of new rules for the Monetary Award Program, with the goal of improving the outcome for students who receive these awards.

The task force is to include one representative of each of the following: Illinois public universities; public community colleges; non-profit, private colleges and universities; proprietary institution; association of financial aid administrators; student currently receiving a MAP grant; Illinois Community College Board; Illinois Board of Higher Education; the lieutenant governor; and the executive director of ISAC.

There has been a lot of discussion this year about adopting some type of a merit system (e.g., SAT/ACT scores, GPA) for recipients, requiring non-completers to pay back MAP grants, etc. There is pretty widespread concern that the current system is unsustainable, and that changes must be made.

In Washington, D.C. …

U.S. CapitolFiscal Year 2013 Appropriations

The House passed the Commerce-Justice-Science (CJS) appropriation bill, H.R. 5326, after considering about 65 amendments.

Rep. Jeff Flake’s amendment (H.AMDT.1094) to prohibit the use of funds to be used to carry out the functions of the Political Science Program in the Division of Social and Economic Sciences in the National Science Foundation was agreed to by a vote of 218-208.

Before officially passing the CJS legislation, the House took up and adopted H.R. 5652, the Sequester Replacement Reconciliation Act. The legislation will serve as the budget for the House for FY2013.

The overall discretionary spending level contained in legislation is $19 billion below the level contained in the Budget Control Act of last year. It seeks to prevent the impending sequestration of the defense budget with cuts from mandatory domestic programs.

Federally Subsidized Student Loans

So far, the Senate has failed to advance a bill to keep federally subsidized college student loan rates lower for another year, prolonging the debate on an issue that has emerged as an election year flashpoint. It failed on a party-line vote of 52-45, with 60 votes needed for passage.

There is no clear path forward for lawmakers who have until July 1 to reauthorize lower rates for approximately 7 million borrowers who would otherwise see rates on subsidized student loans jump from 3.4 percent to 6.8 percent.

National Research Council Study Released

The National Research Council (NRC) will release its study, Research Universities and the Future of America: Ten Breakthrough Actions Vital to Our Prosperity and Security, on Thursday, June 14.

This is the report, requested by Congress in June 2009, aimed at examining “the health and competitiveness of our nation’s research universities and their strong partnership with government and industry that is critical to the nation’s prosperity and national goals.”

The request asked for “the top 10 actions that Congress, the federal government, state governments, research universities, and others could take to assure the ability of the American research university to maintain the excellence in research and doctoral education needed to help the United States compete, prosper, and achieve national goals for health, energy, the environment, and security in the global community of the 21st century.”

DHS Expands List of Disciplines Covered by Extended OPT

The Department of Homeland Security announced last week that it has expanded the list of academic fields and disciplines that would be eligible for the longer 29-month optional practical training (OPT) program.

The 29-month period that applies to many of the science, technology, engineering, and math (STEM) disciplines is intended to acknowledge, among other things, the importance of these fields to the economy. Graduates from these academic disciplines would be eligible to remain in the country under the OPT program for 29 months.

Since the original list was created several years, many interested parties have been advocating for the expansion of the list to include a number of areas of study which were not originally included, such as animal and veterinary sciences. The regular OPT period covers 12 months.

The Voices section of NIU Today features opinions and perspectives from across campus. Lori Clark is director of State and Federal Relations for NIU.