Week of March 22nd., 2010
As expected, last week was very busy on the floor of the Illinois House. After weeks of bills working through the committee process, many proposals were finally heard for a vote last week. The scheduled deadline for passage of House Bills to the Senate is Friday, March 26th. So, this week also promises to be a very active week full of floor action and final votes on dozens of measures. Remember, you can follow the action closely and even watch on the Internet at www.ilga.gov
There were several bills voted on last week that could be of importance as we move toward a budget solution. An important start on pension reform passed the House in the form of HB6368. I was a chief co-sponsor of the proposal and lead republican sponsor. This legislation made important modernizations to two of the five state pension systems. This particular bill deals with the retirement systems for members of the General Assembly (GARS) and the Judges Retirement System (JRS).
Most people have strong opinions regarding changes to the pension systems and almost all agree that the retirement age should be increased. Data shows that people are living longer and, as a result, they are drawing retirement benefits for a longer period of time after reaching retirement age. So, one of the changes agreed to for these two systems was to raise the age for full retirement benefits from 62 to 67.
In addition, this legislation changed the calculation of the benefit for an annuitant to sixty percent of the average of highest eight of the last ten years of service. Currently, these systems pay an eye-popping eighty-five percent of the persons last days pay. Plus, this new pension law requires a cap for the amount that any individual can draw annually from the system. The new limit is the same cap as the Social Security System cap.
There are a couple of other modernizations made as well. The bottom line is that reforms to these systems will reduce the state’s required payment next year by about $22 million. These modernizations are a good start. But, it is equally important that the full actuarial calculated payment to the state pension systems is made. Modernizations to the systems must go hand in hand with stabilization and that means we cannot reduce or skip required employer matching payments.
In the coming weeks, there will be further modernizations made to other state pension systems including Teacher’s Retirement (TRS), State University Retirement (SURS) and State Employee Retirement (SERS). Once again, modernizations should be made that are supported by real data and any agreement must include the fact that full payments are made annually by the State. There should be no more pension raids. Pension payments being skipped or shorted is the primary reason for the unfunded pension liability that we face here in Illinois.
The other significant part of the legislation passed for GARS and JRS is that the changes are for new members of the system. There are those who believe that changes can be made for current workers. Others argue that changing the rules for those already in the system is both unfair and unconstitutional. It appears that Representatives of the House are satisfied it is either fair to only make changes apply to new pension system members or they think there are Constitutional issues related to changes for current system members. The legislation passed by a unanimous vote and now moves to the Senate for consideration. We need more bi-partisan efforts like this as we look for other ways to save the state and taxpayers money. That balance is important.
Another bill that will bring some fiscal restraint also passed handily. HB4711, a bill that I am chief sponsor of, easily passed the House by a vote of 103-7. This bill is simple, it states that if the General Assembly passes a mandate for schools districts, the mandate must be fully funded. If the mandate is not fully funded, then the local school district can waive the mandate and not implement the new requirement. While the legislation is only for any new mandate, the savings could be huge. Each year, dozens of new mandates are passed without regard for funding. Those become de facto property tax increases for local school districts or they cause the district to cut in other areas. Obviously, with such a lopsided vote, this was also supported in a bi-partisan manner.
HJR74 also unanimously passed the House last week. This proposal requires the State Board of Education to establish a Blue Ribbon Committee on existing mandates and recommend which existing mandates can be waived immediately by schools in order to help cope with what is expected to be a very difficult budget year. The State Superintendent of Schools has already started to from the committee and a report with recommendations is due back to the General Assembly by May 1st.
There are still several gun bills that could possibly be called for a vote this week. I will continue to oppose any attempts to infringe upon Second Amendment Rights. Law abiding citizens should not have the government attempting to interfere with their Constitutional rights. Thanks to all of you who have contacted me to keep me informed about these important bills.
Legislation designed to create a new tax credit for small business job development advanced this week. The governor proposed this tax credit in his budget address. Once again, there was good support from both sides of the aisle for this proposal. Unfortunately though, another measure, which expanded prevailing wage laws to the aggregate transport industry also advanced this week. The estimated cost increase for the Illinois Department of Transportation (IDOT) per construction season is around $10 million. This is the wrong message to send employers at the wring time for Illinois. We cannot afford to increase the cost of construction for taxpayers and we cannot afford to see Illinois continue to be viewed negatively by job producers.
Many people have written to me to express views related to the Health Care legislation being debated at the National level. As you know, I do not have a direct vote on this measure. However, the current version of the legislation appears to go way to far toward nationalized health care for me. I do agree that we must make some reforms to health care in the United States. But, I think this legislation could cause many more problems than it solves. This past week, Caterpillar announced that the proposal would cost them over $100 million the first year. Some may not mind that. But, remember, in this global economy there is very little that keeps companies from locating elsewhere in order to remain competitive. Both sides of the aisle make some good points regarding what needs to be included in a good health care reform bill. The problem is that this legislation, if it passes, will contain only one side of the argument and I think that will lead to some very serious negative consequences for our great Nation.
Please keep the correspondence coming, you can reach me at: P.O. Box 125, Hutsonville, IL 62433, call me at 618-563-4128 or 217-558-1040 or e-mail me at reddyunit1@aol.com. You can also read more on my web site: www.peopleforeddy.com or and follow me on Twitter at www.twitter.com/RepEddy and www.tweetillinois.org.