Next session dates: May 13-16, 2008
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This week...
IMA Testifies at Climate Change Hearing
Members of the Senate Subcommittee on Global Warming & Climate Change hosted a subject matter hearing this week to discuss comprehensive legislation entitled the "Global Warming Response Act." Sponsored by Sen. Don Harmon (D-Oak Park), the legislation (SB 2220) is an initiative of alarmist environmentalists who contend that the burning of fossil fuels is the primary cause of global warming resulting in "grave risks to the economy, public health and environment."
At the hearing, IMA environmental expert Dave Kolaz testified in opposition to the comprehensive legislation noting that it is called "global warming, not Illinois warming." The IMA provided research statistics indicating that SB 2220 would hurt the Illinois economy as a result of higher energy costs, job loss, and lower economic output. Kolaz testified that any changes should be made at the federal level instead of state-by-state approach. In addition, his testimony coincided with comments from Dr. X, a scientist at the University of Alabama, who indicated that the majority of warming is not man-made and environmentalists only have theories – not hard data or facts.
The legislation would enact a cap-and-trade program in Illinois designed to lower carbon dioxide emissions to 1990 levels by the year 2020. Further, the bill would mandate new California-style air emission limits for automobiles that would reduce the use of alternative fuels, decrease vehicle choice, and cede Illinois environmental regulatory action to California officials. It also called for new building energy standards, energy efficient furnaces, and a clean fuel standard that would reduce the carbon intensity in motor fuel by at least 10 percent by the year 2020. According to testimony, the technology currently does not exist to meet this threshold.
Officials from the Auto Alliance noted that due to current federal CAFÉ standards, the proposed Illinois law would only increase the price of vehicles and harm domestic auto manufacturers while having no environmental impact.
The IMA appreciates the effort of Senator Harmon and committee members to hold a series of summer hearings to debate the actual merits of the bill instead of moving forward with a quick vote in the waning days of the legislative session.
Testing Water Supplies
The House Environmental Health Committee is poised to consider and amendment to legislation (HB 2167,) next week that would mandate that public water supplies be tested for the presence of "trace contaminants." Sponsored by Rep. Paul Froehlich (D-Schaumberg), the measure would require testing for a number of items including natural and synthetic hormones, chemicals in cosmetics, shampoos, shaving lotions, skin creams, flame retardants, plastics, and anti-bacterial soap beginning on July 1, 2009.
The bill however fails to identify who should conduct the testing, how often the water should be tested, or what should be done with the results. Unfortunately, this appears to be a political knee-jerk reaction to recent press reports regarding the presence of trace amounts of various products in water supplies. While trace amounts have been found in untreated water, they are safe levels that do not impact humans and are often removed in water treatment processes.
Ban on Pay to Play?
In light of revelations at the ongoing trial of Tony Rezko in which accusations have been made that the Governor and his fundraisers accepted political contributions in exchange for jobs and state contracts, members of the House and Senate are working toward passage of a new ethics law that would ban political contributions from "business entities" with state contracts or bids worth more than $50,000.
The current language in HB 824 is the result of negotiations between Sen. Don Harmon (D-Oak Park) and Rep. John Fritchey (D-Chicago). Under the bill, any for-profit business entity and their executives and affiliated entities would be barred from making political contributions in excess of $500 to an executive branch official who would oversee the agency responsible for awarding the contract. This would primarily impact the Governor but could apply to any executive branch official.
The proposed law currently exempts not-for-profit organizations including trade associations and labor unions. A number of problems must be addressed including the massive new reporting requirements on businesses where they would have to list every executive and their family members (including children) and affiliated companies within 48 hours of making a bid on a state contract. Further, clarification is needed with respect to the difference between a state contract, grant and other funding mechanisms. Some members of the Senate want to include a ban or limit on contributions to the state parties.
HB 824 was amended and sits on 3rd reading in the Senate. It must be passed by the Senate and then be adopted in the House before going to the Governor for his signature.
Successful IMA Business Day
Hundreds of manufacturing and business leaders gathered together in Springfield this week as part of the annual Business Day event at the State Capitol. In addition to listening to legislative leaders, IMA members were able to take their concerns over tax, labor, health care, and environmental policy directly to their elected officials.
Attendees were able to hear candid remarks at the luncheon from Senate Republican Leader Frank Watson (R-Greenville), House Republican Leader Tom Cross (R-Oswego), and Rep. John Bradley (D-Marion) who represented House Speaker Michael J. Madigan (D-Chicago). Later in the day, IMA Board Members enjoyed a special opportunity to meet privately with Speaker Madigan, Leader Watson, and Leader Cross in their respective offices.
All the featured speakers at the luncheon noted that the current political environment in Springfield is hostile and is likely to result in an overtime legislative session as lawmakers grapple to find solutions to the state's current fiscal crisis and desire to pass a $25 billion capitol infrastructure plan.
Later in the evening, more than 100 lawmakers from all sides of the political spectrum joined together under a tent in the IMA parking lot for a gala reception that allowed IMA members to interact socially with the respective legislators. Thank you to IMA members and legislators who participated in the event.
Illinois Debt Grows
As Illinois Comptroller Dan Hynes notes in his latest issue of Fiscal Focus, long-term debt "is not a glamorous topic." However, it is a critical issue to every Illinois citizen and business that operates within the state who must pay the taxes to finance these long-term costs.
According to the Comptroller's report, at the end of fiscal year 2007, Illinois' outstanding general obligation (G.O.) bonds totaled $19.9 billion, including $10 billion in pension funding bonds. G.O Bonds are used primarily for roads, bridges, schools and other infrastructure needs. According to Moody's Investor Services, Illinois' net tax-supported debt per capita was $1,985 which ranked 7th highest nationwide. When measured using net tax-supported debt as a percentage of personal income, Illinois' rank jumped from 20th in 2000 to 6th highest in 2007.
Because long-term debt has a major impact on a state's finances, the drafters of the 1970 State Constitution required that a supermajority vote (3/5) be required in order to issue bonds and increase debt. As the Governor and lawmakers debate how to pay for a new $25 billion capitol infrastructure program, it is imperative that they look at the entire state budget and how the new debt will impact our financial future.
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