Next session dates: House & Senate in continuous session
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This week...
Governor, Senate Democrats Pull Out All Stops for Universal Health Care
Using every trick in the playbook, Governor Rod Blagojevich and Senate President Emil Jones (D-Chicago) pushed through a massive expansion of health care that could have serious repercussions for Illinois' fiscal health in the future. Dubbed "Illinois Covered", the new universal health care program imposes a new three percent payroll tax on Illinois employers to fund the new state program that provides free or partially-subsidized health care to families making less than $63,000 annually.
While the Governor and his allies claim that the final version of the plan contained in Amendment #9 to SB 5 is a "scaled back" version designed to hold costs down, in essence the bill is not scaled down in either scope or cost. Rather, the bill is phased in over a longer period of time and continues to place costly and burdensome mandates that could limit choice in the private marketplace. Over a period of years, the program's cost is set to skyrocket placing an enormous burden on the state's finances.
The newest version of the Governor's healthcare plan passed the Senate Public Health Committee on a partisan 7-4 vote. The IMA applauds Senator Carole Pankau (R-Roselle), Senator Bill Brady (R-Bloomington), Senator Christine Radogno (R-LaGrange) and Senator Dale Righter (R-Mattoon) for opposing a program that is too big and too expensive.
General Assembly Passes Energy Rate Relief Package
After months of political pressure from legislators and the Attorney General, the state's utility companies agreed to a final electric rate relief package that will provide $1 billion to residential electric customers over a period of four years. In addition to providing checks and credits to customers, the program also creates a new Illinois Power Agency designed to independently procure power for the transmission companies and encourages new environmental policies that will lead to energy efficiency and renewable energy. Most importantly, SB 1592 will preserve the competitive electric market and encourage increased competition resulting in lower prices and increased service. The measure passed the Senate (40-13-1) and House (80-33-1) and now awaits action by the Governor.
Ten years ago, the Illinois General Assembly passed electric deregulation designed to increase competition in the marketplace. As part of the 1997 legislation, the General Assembly chose to reduce residential rates by 20 percent and then froze them for a decade. In addition, generation and transmission companies were split. Industrial and commercial customers paid a transition charge and saw gradual increases in their electric bills during the decade. During that period of time, residential and business customers saved billions of dollars.
Earlier this year, when the electric rate freeze expired, politicians overreacted and threatened to extend the rate freeze. If a freeze was enacted, the transmission companies would have been required to sell power at a loss which could have led to bankruptcy. If this occurred, transmission companies would have had to buy power on the high-cost daily spot market which would have led to brownouts and even higher costs.
In the end, facing a threat to their financial viability, the utility companies cut a deal and were forced to pay $1 billion. While residential electric customers will see some rate relief, the overall concept of state government forcing law abiding business to pay money is chilling.
Legislative Leaders Meet, Senate Democrats Introduce Budget, Capital Bill
The four legislative leaders met for the first time in a closed meeting without the Governor in an effort to reach an accord on a spending plan for the remainder of the fiscal year. According to news reports, the meeting was substantive and productive as leaders discussed education, capital spending and potential revenue.
Prior to the meeting, the Senate Democrats rolled out a budget package (SB 1110, SB 1084, SB 1, SB 2, and HB 556) that included nearly $2.3 billion in new spending financed largely through an increase in gambling, a new 75 cents tax on cigarettes (see next story), and sweeping revenue from dedicated funds. The budget proposal sought to increase education spending by $900 million, fully funded the statutory pension contribution, included pork projects, and authorized a new $7.5 billion bond program for roads, schools, and transit.
The Senate budget proposal passed the Senate Appropriations Committee on a partisan vote but was not voted on by the full chamber.
Cigarette Tax Hike Passes Revenue Committee
Late this week, Senator John Cullerton (D-Chicago) introduced an amendment to legislation (HB 556) increasing the tax on a pack of cigarettes by 75 cents. Later, the bill was further amended to increase the tax by a total of 90 cents per pack and include a local-option tax for counties. Under the plan, each county in Illinois could vote to impose a local cigarette tax of up to $2 per pack creating a costly and cumbersome new tax system for businesses.
Designed to help address the budget impasse, the new tax would generate roughly $300 million for the state coffers. The measure passed the Senate Revenue Committee on a partisan vote and will likely be debated in budget negotiations.
Other Springfield Highlights available online
