Capitol Update - April 12

Moody’s Investors Service labels current Illinois budget situation “unsustainable”
The globally-followed credit-rating firm Moody’s, which has downgraded debt securities issued by the state and its affiliates in the recent past, has issued another warning. In the most recent caution issued to Springfield, Moody’s indicated that if the state does not enact a budget by May 31, Illinois will be on a pathway to “unsustainable fiscal challenges.”

Creating special concerns for credit analysts is the growing possibility that Illinois’ fiscal situation could threaten its ability to maintain an investment-quality credit rating. Only two additional credit reductions would reduce Illinois’ credit rating to non-investment-grade level.  Moody’s analysts warned that the consequence of this loss of investment-grade quality could expand the cuts that are now being inflicted on social service offices and departments within institutions of higher education. This is a serious threat to public universities and community services across Illinois.

“Illinois is at a critical juncture,” stated Moody’s vice president and senior credit officer.  The credit-rating official pointed out that Illinois already has the lowest debt rating of any state in the U.S.  The developing budget situation has already helped to create a significant pension underfunding situation, which has exacerbated the overall picture of Illinois’ debt-to-assets ratio.

Irresponsible stopgap spending plan passes House
Last week the Illinois House passed a temporary stopgap budget that does nothing to solve the long-term problems facing state government. Rather than focusing on putting into place a full-year budget that funds all of state government and gives schools, service providers and everyday Illinoisans some certainty, the House instead passed a short-term bill that just strings Illinoisans along for a few more months.

The funding that was included in the bill which passed the House isn’t even close to what vital programs need. For example, the spending plan includes only 36% of the funding for domestic violence shelters, only 36% for infant mortality programs and only 38% for the senior meals program.

To make matters worse, the plan would spend $1.5 million on a program in Chicago that has already been disbanded and employees laid off, and more than $500,000 on two programs that are currently ineligible to receive funds due to noncompliance issues with reporting of how state funds were previously spent.

Instead of stopgaps and governing through piecemeal “solutions”, we need to get serious about tackling the problems state government faces. That can only be done through a balanced budget.

Republicans have said over and over again that we are ready and willing to work with our colleagues on the other side of the aisle to find an agreement on a budget that balances and fixes the long term issues facing our state while respecting the priorities of both parties. We have been clear about our priorities: a budget that actually balances, property tax relief for families and businesses, term limits and fair maps to restore accountability and trust to government, and other reforms to make Illinois competitive, grow our economy and most importantly create jobs.

New bill allows volunteer work at state parks
On Wednesday the House passed a bipartisan measure to allow volunteer work to be performed at state parks. The legislation was sponsored by Rep. Ryan Spain of Peoria who said his intention was to allow volunteers to create an Adopt-a-Trail program as well as allow volunteer work at state parks and trails. The bill allows volunteers to conduct spring cleanups, accessibility projects, special events, trail maintenance, enhancement, or realignment, public information and assistance, or training.

This legislation attempts to resolve a long-standing problem at many parks and facilities where volunteers are being told they are not permitted to help keep trails clean and maintained. Currently, those individuals are able to assist with removal of trash and litter. Rep. Spain said his intention is not to take away work done by state employees, but rather to allow supplemental efforts to help keep our state parks in better shape for future generations.

The bill, HB 3455, was suggested by trail riders at Jubilee State Park and negotiated with the Department of Natural Resources and other stakeholders. It passed House by a vote of 113-0.

Governor begins consolidation of IHPA into IDNR
In an executive order, Gov. Bruce Rauner took steps last week to trigger the elimination of the Illinois Historic Preservation Agency (IHPA).  The agency operates more than 50 historic and cultural-heritage sites throughout Illinois. IHPA was separated out from the former Department of Conservation in 1985.

Under the terms of Rauner’s Executive Order, most of IHPA will be returned to what is now the Department of Natural Resources. The consolidation of the two agencies is expected to generate significant administrative savings. A key entity within IHPA, the Abraham Lincoln Presidential Library and Museum, will be granted its own Board of Trustees and autonomy directly under the Office of the Governor.

The consolidation of most of the IHPA and granting of autonomy to the Lincoln Presidential Library will take effect 60 days after issuance of the Executive Order, unless the implementation of the order is blocked by joint resolution of the Illinois General Assembly. The Executive Order was released on March 31, setting the stage for this change to be implemented at the end of May.

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