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Statehouse update: Spring work about to begin

February 4, 2013
Lori Clark

Lori Clark

In Springfield …

Last week, the Illinois House of Representatives began its Spring Session.

On Wednesday, the House adopted rules that will govern its operations over the next two years (the 98th General Assembly), and House committee appointments were announced. Thursday’s House session was canceled, and the Senate did not convene.

Next week should see both chambers begin work in earnest.

To date, 1,253 bills have been filed in the House and 1,279 in the Senate. Friday, Feb. 15, is the last day to file substantive bills in the Senate, and Tuesday, Feb. 26, is the last day to file substantive bills in the House, so we can expect many more bills to be filed before the deadline.

As we begin this new session of the General Assembly, it is important to understand some of the key budgetary and fiscal issues that must be addressed.

Hearings will begin this week to determine what revenue number will be used by the General Assembly as they work through the appropriations process. At this time, the best estimate is that revenue increases will be modest, perhaps in the range of $600 million. However, the demands on revenue will continue to greatly surpass available funds.

There has been no resolution on the issue of stabilizing the five state-funded pension systems, and an additional $1 billion must be contributed into these systems in FY 2014.

Photo of a man hanging his head over a pile of unpaid bills

Further, employee healthcare costs continue to increase rapidly, and there are mandatory debt service payments that must be made – including an estimated $1.65 billion for repayment of the pension bonds issues in 2003, 2010 and 2011.

There also is a huge backlog of unpaid bills that must be paid.

Further complicating this issue is the fact that the 67 percent income tax increase passed two years ago will expire Jan. 1, 2015. If this increase is not extended, the state budget gap could widen even further. As an example, the $7.5 billion that was raised through the 2011 tax increase was used to make the state’s annual pension payments.

Illinois’ bond ratings are now the lowest in the nation, making it more costly to borrow additional money. There also could be severe fiscal implication in Illinois and at NIU if sequestration reduces the amount of federal funding that flows to the state and to entities within the state.

Gov. Pat Quinn will deliver his State of the State address at noon Wednesday, Feb. 6. We will provide you with a summary of this speech, but it is likely to contain dire warnings about what many are referring to as Illinois “fiscal cliff.”  The governor’s budget message will be delivered in March.

The House appropriations committees, including the Higher Education Appropriation Committee, will be given an allocation (percent of available revenue that will be allocated to higher education – and that includes public universities, community colleges, IBHE, ISAC, etc.), and then the committee members will work with the stakeholders on specific allocations.

We should have a better idea of what our appropriation might look like during this process. You will recall that in FY 2013, higher education appropriations were reduced by 6.14 percent.

We will do our best to keep you informed in a timely manner about what is occurring in Springfield. Regular updates again will be posted to the NIU State Pension & Budget Update website.

In addition, in these uncertain times, there are sure to be questions and rumors. We continue to provide a Rumors & Questions section; we encourage you to submit questions you might have about the budget, pensions or federal or state legislative environment.

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