Legislative update: Senate Democrats propose smaller budget cut for Illinois higher education

Lori Clark
Lori Clark

In Springfield …

Last week, both chambers of the Illinois General Assembly continued to move bills through committees and through third readings.

However, the three big issues remaining are the FY 2013 appropriations, pension stabilization, and Medicaid reform and cuts.

Most of the discussions on these three issues have taken place behind closed doors, but with the adjournment date looming Thursday, May 31, it is expected that action will begin this week.

Medicaid

It appears as though the working group appointed to deal with Medicaid reforms and to make recommendations on how to reduce the state’s FY 2013 Medicaid payments by the $2.7 billion called for in Gov. Pat Quinn’s budget proposal have reached a tentative agreement.

Legislation is expected this week.

One portion of the agreement involves new revenue to be derived from a $1-per-pack cigarette tax, anticipated to raise $700 million, which would be matched by $700 million in federal funding. There also would be $100 million raised through an additional hospital assessment, also to be matched by federal funds.

The working committee identified approximately $1.4 billon in cuts, including reductions in provider rates, ending a drug program for some participants, reducing eligibility from improved screening procedures and lowering income thresholds.

We are watching this issue carefully because if the $2.7 billion in cuts are not achieved, it is likely that all other appropriations, including higher education, will face further reductions in FY 2013.

FY 2013 Appropriations

The FY 2013 appropriations bills in the House of Representatives are not being released from the five appropriations committees, including higher education, pending the outcome of the Medicaid reductions.

At this time, higher education is facing a 6.14 percent reduction from the FY 2012 base appropriation.

Last Friday, the Senate Democrats released a budget proposal that calls for spending $553 million more than the House proposal. For higher education, the Senate proposal would amount to a 3.25 percent reduction, instead of the 6.14 percent in the House. The Senate proposal also would maintain funding for the Monetary Award Program at the FY 2012 level, versus the more than $14 million reduction in the House.

This will make for some interesting negotiations over the coming days.

Photo of moneyPensions

Discussions around the issue of stabilizing the five state-funded pension systems continue behind closed doors. Legislation is likely to emerge this week. Keep checking the NIU State Pension & Budget Update website for current information.

Minimum Wage Increase

The Senate Executive Committee last week, on a partisan vote, approved SB 1565, sponsored by Sen. Kimberly Lightford.

The bill would increase the minimum wage by 50 cents per hour plus the consumer price index until it meets a 1968 level indexed for inflation. This likely would increase the minimum wage from $8.25 to $12.47 by 2017 – by far, the highest minimum wage rate in the United States.

Sen. Lightford has agreed to hold this bill for now and to hold meetings with the business community over the summer to try to address their concerns.

Re-employment of University Annuitants

HB 4996, which restricts the ability of public universities to hire annuitants, is now on third reading in the Senate. Senate Committee Amendment 1 was adopted that will move the implementation and effective date back one year, until 2013.

In Washington, D.C. …

Obama-SOTUPresident Obama last week warned congressional leaders that he would not tolerate a replay of last summer’s bitter debt ceiling fight that resulted in the first-ever credit rating downgrade for the United States.

Obama issued this statement after House Speaker John Boehner stated that he wanted to address the debt-limit, budget and expiring taxes now and not during a lame duck session of Congress in the fall.

Boehner indicated his desire to enact even more debt reductions than the level agreed to in last summer’s Budget Control Act.

However, in the House last week, the Defense Authorization Act (H.R. 4310) was passed by a vote of 299-120. This bill calls for $643 billion in spending, $3.6 billion more than the president’s request and $8 billion more than provided for in the Budget Control Act.

The full Senate Committee on Appropriation is undertaking the final markup of the FY 2013 appropriations bills for Military Construction and Veterans Affairs and the Department of Homeland Security.

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

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