February 22, 2008

“The most important political office is that of the private citizen.” 

~Louis Brandeis

There was relatively little action this week at the Capitol as this 2008 spring session gets underway. The highlight of the week was the Wednesday budget address by the Governor to a joint session of the Illinois General Assembly. While most expected an announcement of a major new tax, the Governor’s speech was fairly short, both in terms of length and specifics.

While the budget will dominate the debate this spring session the following dot points are some of the highlights from the Governor’s plan:

FY08 Revenue Shortfall - $750 million

• To address shortfall the Governor proposes to raise $750 million from fund transfers and corporate loophole closures.  No specifics were provided.

Tax Credits- Corporate and Child Tax Credits (One time program $1.2 billion)

• A 20% corporate tax cut for those corporations that paid taxes for 2007 ($300 million).
• Provide an Illinois Child Tax credit, $300 per child for taxpayers who qualify for the federal plan ($900 million).
• Healthcare Expansion Costs ($417 million)
• Program to be funded by an employer assessment beginning January 1, 2009.
• Assessment applies to all employers of more than 10 employees who spend less than 4 percent of their payroll costs providing healthcare.
• Employer Payroll Tax Assessment is 3%
• Once fully annualized this is estimated to raise $1 billion each year. 

Capital Projects

• Lease the Lottery for $10 - $12 billion
• $7 billion of this cash will fund part of $11 billion infrastructure program.
• $4 billion (or remainder of cash) will go into a trust and earn interest to continue the current amount paid from lottery to education
• Bond $3.8 billion using Road Fund as debt service source
• $600 million in “raids” from Dedicated Funds
• $500 million in fund raids (requires legislation)
• $100  million in administrative “chargebacks” from various funds (law expired – requires legislation)

Business Taxes - $1.25 billion

• Annualized $1 billion in business taxes -   3% payroll tax
• $250 million in business taxes in FY08 by “closing loopholes”

A copy of the budget address and other documents can be downloaded from the noted links:

http://www.illinois.gov/gov/budgetaddress/documents/FY2009ShortBudgetPresentation.pdf

http://www.illinois.gov/gov/budgetaddress/documents/022008SPEECHtext.pdf

On Wednesday, the Senate Local Government Committee approved two bills of interest and sent them to the full Senate for further consideration. Senate Bill 1992, sponsored by Senator Pam Althoff, grants the authority for counties (except for Cook County) to place a question on the ballot for a property tax to be levied for a county farmland preservation easement program. IF the voters so authorize, the county could levy an annual 0.05% property tax with proceeds being used for the purchase of easements to preserve farmland. In effect, the county voters would be asked if they support a countywide funding mechanism for the purchase of development rights. The legislation allows the question to be placed on the ballot by the county board OR by a petition of the citizens.  Conversely, the legislation also gives the citizens the opportunity to petition for a vote to be held to discontinue the program and tax. IAR had expressed concern that the petition requirements, in terms of the number of citizens to get a question on the ballot, were very low (only 100 “taxpayers”). The sponsor indicated that she would work with IAR to modify the number and would discuss other concerns. In other action, the Committee approved Senate Bill 1990, sponsored by Senator Todd Sieben. This bill would authorize the residents of the Galena Territory to begin the process of determining whether they would like to incorporate as a separate village. The State legislation merely provides the authorization for hearings and a vote of the residents that will determine the final decision on the issue of incorporation. 

On Thursday, the House Local Government Committee took action on House Bill 4294. This bill, sponsored by Representative Patricia Lindner, would authorize the counties of Will, Kendall, Boone, Grundy, Lake and DeKalb to impose a county motor fuel tax IF APPROVED by the voters. This bill is pending in the House.

On Friday morning the House Revenue Committee approved House Bill 4201, sponsored by Representative Keith Sommer. This legislation extends the term of the Tax Increment Financing (TIF) District in the village of Downs. This bill has been sent to the House floor for further consideration.

On Friday, the House of Representatives took final action on House Bill 4129 and sent the bill to the Senate for their consideration. You will recall that this bill, sponsored by Representative Frank Mautino, amends the Private Sewage Disposal Licensing Act, to allow for new technology to be used as an option for smaller systems that service primarily residential properties. The intent is to allow for new technology, tested and proven in other states and often at a lesser cost, to be used in Illinois. IAR SUPPORTED this legislation which received unanimous support in the House.

The General Assembly is scheduled to be in session next week Tuesday, February 26-Thursday, February 28th. Full schedules in Senate and House Committees along with floor action will occur. 

Next Tuesday is the annual IAR lobby day- Capitol Conference and record-breaking registration numbers have been recorded! We will highlight the day’s events next week.

For more information, contact Greg St. Aubin, Director of IAR Governmental Affairs, gstaubin@iar.org, or Julie Sullivan, Assistant Director, Legislative and Political Affairs, jsullivan@iar.org.

Contact information for members of the House and Senate, notice of committee hearings, text of legislation and roll call votes are all available on the Illinois General Assembly’s Web site, www.ilga.gov.