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Dear Neighbor:
Recently, many of my constituents have reached out to me regarding Senate Bill 2505 which addressed Illinois' disastrous financial situation. This was one of the most difficult votes the legislature has taken because they were necessary votes, not easy votes. As one of 46 states dealing with revenue shortfalls and budget deficits, Illinois had to take action to avoid an economic disaster. In the long-run, this bill will put Illinois on a stable footing, correct mistakes of the past, deal with an unprecedented recession, and move Illinois forward on a better, more prosperous path. Had we done nothing to solve the state's structural revenue deficit, we would have become insolvent and our bonds would have been reduced to junk status. In the past I have voted against state budgets that do nothing but kick the can further down the road; however, I know that, for once, this legislation confronts our problems head-on.
I would not have voted for this bill if it failed to cap future state spending, increased property taxes, or if the legislature did not pass significant structural and cost-saving reforms to state programs.
The state owes $8.2 billion to vendors, hospitals, schools and businesses for services already rendered. For months I met with social service agencies that exhausted their last lines of credit as the state fell further behind in monthly payments, propelling more employee layoffs and forcing individuals to either forgo these basic services or turn to more costly options such as emergency room visits or institutionalized care. On top of backlogged bills, the state's structural deficit was projected to leave us with a $6.2 billion deficit for FY12. State revenues from sources such as income and sales taxes are down 25%. Doing nothing would have resulted in financial disaster, prompted creditors and lenders to flee the state and would have left us all in a worse situation than we are now in. Our debt would have been downgraded, contractors would have refused to do business with the state, and the basic operating costs of government would have increased dramatically. Most importantly, our real problems would have been merely pushed off until next month, next year, or next term - none of which we can afford.
What are we doing about spending?
My foremost concern in considering any increase in any state tax is whether or not the state is using each dollar efficiently and without waste. My constituents, too, rightly demand budget cuts and although the media coverage on our progress is scant, we are cutting. We cut over $3 billion from the state budget in the last 2 years. Every state agency, department and program has been forced to sharply reduce budgets and do more with less. We drastically restructured the way we develop budget plans and operate state government and passed bi-partisan reform measures on some of the most imperative budget issues. However, doing nothing but cut our way out of the budget deficit would result in a 40% reduction in the state budget, devastating the state's ability to educate our children, keep citizens safe, and care for our elderly.
Illinois ranks second lowest in the nation for the number of state employees per capita and 6th lowest in per capita spending. The national average is 85 state workers per 10,000 in population; Illinois has 54 state workers per 10,000 in population. There are 20% less state employees than there were just seven years ago as a result of our efforts to consolidate government.
Some of the cuts made in FY11 alone include:
- Central Management Services: $16.5 million
- Department of Children and Family Services: $34.5 million
- Department of Natural Resources: $8.5 million
- Department of Corrections: $42 million
- Department of Human Services: $576 million
- Department of Healthcare and Family Services: $216 million
- Department of Revenue: $15 million
A more complete budget outline - including reductions - can be found here.
These cuts are in addition to extensive cuts in FY10 that include:
- State operations: $185 million
- Grants: $250 million
- Department on Aging: $29 million
- Illinois State Board of Education: $174 million
- Department of Revenue: $15 million
- State Police: $24 million
- Department of Commerce and Economic Opportunity: $10 million
Additional FY10 cuts may be found here and here.
Last year we passed pension reforms that reduced benefits and extended the retirement age for new state employees. While both sides of the aisle agree that more reform is needed and we continue to work on this issue,Senate Bill 1946 saved the state $400 million this year alone and is projected to save at least $75 billion over the next 35 years.
Senate Bill 2505 also caps state budget growth at 2% per year - if we spend beyond that cap, the income tax increase is repealed. This ensures that the additional revenue generated is being spent as promised and NOT to expand or create new state programs. Due to inflation we will still need to cut roughly $2.2 billion from the state budget over the next three years in order to keep spending under this cap. State government will not grow as a result of this bill.
In another effort at significant reform and savings, the General Assembly passed sweeping Medicaid reform in House Bill 5420 which I co-sponsored as a member of the House task force on Medicaid reform. Medicaid comprises a significant portion of the state's overall budget and the reforms included in this bill will save the state $800 million over the next five years. The bill requires that at least 50% of recipients be shifted into a less expensive managed care program by 2015 and prohibits expansion of programs or eligibility for at least two years. To sharply cut back on fraud, recipients will now be required to show proof of Illinois residency and income annually rather than receiving automatic re-enrollment. These reforms ensure that eligible individuals are receiving the most effective and cost-efficient health care while reinforcing the intent of Medicaid as the payer of last resort.
The legislature voted to limit the senior citizen free rides program on public transportation to those individuals qualifying for the Circuit Breaker program. With Senate Bill 3778, all other higher-income senior citizens will still receive half-priced fare, as they had before Governor Blagojevich enacted the free rides program in 2007. The program has strained the Regional Transportation Authority's budget with upwards of $70 million per year in lost revenues - a figure that could have easily doubled over the next twenty years had the legislature not taken action.
What does Senate Bill 2505 do?
- Individual income tax rates increase from 3% to 5% for the next four years (drops to 3.75% for the following 10 years and drops to 3.25% thereafter)
- Corporate income tax rates increase from 4.8% to 7% for the next four years (drops to 6.4% for the following 10 years and drops to 4.9% thereafter)
- Reinstates estate tax to 2009 levels
- Caps spending growth at 2% per year. If the state spends beyond the cap, all income tax increases are repealed. This is not to fund new programs or expand existing ones, but is only meant to compensate for inflation.
What will Senate Bill 2505 pay for?
All revenue from the corporate tax increase will address the structural deficit. Revenue from the individual income tax increase will be split. In the first four years (at the 2% rate increase), 75% of the increase will go towards the structural deficit while the remainder will pay outstanding bills to providers and vendors. In the following ten years (at the .75% rate), 66% will be used for debt service on bonds and the remaining 33% will be used for education and human services. From thereafter, the .25% income tax increase will be used for education and human services.
How will Illinois be able to compete?
Since the beginning of the recession, at least 30 states have enacted revenue-increasing measures. Several of these states that increased the income tax now report higher personal income and above-average scores on key economic indicators. As I outlined in an e-letter last year, Illinois has a relatively low state tax burden. Even with the tax increase at its highest point Illinois is still in line with other Midwestern states and maintains a competitive edge in taxing rates. In many cases, Illinois still has the lowest tax burden of the neighboring states. I encourage you to read my previous e-letter regarding Illinois tax rates to better understand the comparative differences between Illinois, our neighboring states, and the rest of the country.
How will we prevent budget deficits in the future?
In addition to Senate Bill 2505, I advocated for drastic budget reforms through a budgeting for outcomes process or zero-based budgeting that the state will now use for future state budgets. This is a results-driven approach that allows the government to make the most efficient use out of every public dollar. In the process, programs and vendors become more competitive and must prove effectiveness and cost-efficiency in order to be granted an allocation for the year's budget. This also limits spending to projected revenue and forces the legislature and the Governor to reconsider spending priorities annually.
As the New York Times editorialized on Illinois' budget, "Unable to pay its bills, it finally accepted reality last week and raised taxes on incomes and businesses - a first step toward getting its house in order," I stress the importance of this bill as just one important component in doing the responsible thing. I am serious about lasting structural reform for now and assure you that when the legislature convenes in February, budget issues will once again be the central focus of our efforts. I will continue to advocate for the kind of long-term responsibility that we have lacked for far too long and lead the fight for spending cuts and fiscal stability. As always, I will keep you updated on our reforms, budget developments and other important pieces of legislation as more details become available.
Very truly yours,
Sara Feigenholtz
| Other Bills of Interest |
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Death Penalty: Senate Bill 3539 abolishes the death penalty in Illinois. As a co-sponsor of this measure, I am thrilled that Illinois is ending a criminal sentence that has proven to be ineffective in deterring murder, immoral and inherently broken beyond repair. This bill passed the House and Senate and will be sent to the Governor for approval.
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| New Laws Enacted on January 1, 2011 |
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Campaign finance:
New campaign finance legislation will, for the first time, cap political campaign contributions by individuals, organizations, businesses, unions and political action committees. Campaign disclosure regulations are made more transparent by increasing the number of reports filed by candidates from two to four per year and requiring all donations over $1,000 to be reported within five days.
Speeding: Laws for speeding violations are strengthened, making speeding in excess of 30 miles an hour over the limit punishable by a $1,500 fine and 6 months prison time. Speeding in excess of 40 miles an hour over the limit is punishable of up to a $2,500 fine and one year prison time, with court supervision no longer a penalty option for offenders. Offenders 40 mph over the limit must also be fingerprinted.
Red Light Cameras: Motorists will also be given more rights in regards to red-light cameras. Locations of the cameras will be posted online and every violation will be reviewed by an officer before a citation is issued. Drivers are given more leeway in crossing the white lines and making right turns on a red light. Those still wishing to challenge the ticket can do so without having to pay a fee if their challenge is denied.
Credit History Discrimination: The Employee Credit Privacy Act prohibits employees from inquiring or using an applicant or employee's credit history as a basis for employment, recruitment, discharge or compensation. There are some limited exceptions.
Public Safety:
Individuals convicted of an aggravated weapons charge that did not have a valid firearms owner identification card and possessed a loaded firearm will face a mandatory one to three-year prison sentence. A new law also adds misrepresentation of oneself to existing home invasion and burglary offenses in order to combat thieves who pose as a government representative, construction worker or utilities employee. Finally, making a false 911 call is now a Class 4 Felony (on par with filing a false police report).
Military Personnel:
While members of the military may now vote by fax or email, children and grandparents are now eligible for Family Military Leave. Disabled veterans who move into a nursing home or VA facility no longer need to forfeit their veterans' homestead exemption if the house is still occupied by a spouse or is unoccupied. In an effort to help military personnel keep their homes and avoid foreclosure, active duty service members may now apply for a 90-day foreclosure delay.
Child Safety: Parents who fail to strap a child into a car seat face a fine of $75 (up from $50). Parents are also prohibited from leaving children in the custody of a convicted child sex offender. A new law combats "sexting" by giving courts the ability to require counseling or supervision to minors charged with sending sexually explicit messages and are not subject to felony child pornography charges. Additionally, Chicago Public Schools will launch a violence hot-line for anonymous crime and violence prevention calls.
Primary Elections: Illinois' primary elections will now take place on the third Tuesday of March during even years. For the primary election, candidates for governor and lieutenant governor will run on the same ticket rather than running independent of each other.
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| Tax Assistance |
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Assistance for Families of Military Personnel
The Illinois CPA Society is offering free tax for active duty military personnel and their families. For more information on these services, visit the ICPAS website. You can also download an application form here.
Chicago Tax Assistance Center
The City of Chicago provides tax preparation and filing assistance for eligible individuals. Individuals meeting certain income requirements may be eligible for up to $5,567 through the Earned Income Tax Credit.
Families earning less than $50,000 and individuals earning less than $25,000 are also eligible for free tax preparation assistance through the Center for Economic Progress and the Tax Assistance Program.
For more information, eligibility requirements, and to locate a tax assistance site and hours, call 311 City Services or click here.
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| Community Events |
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44th Ward Chicago Driver Survival Seminar
Tuesday, January 25, 7:00 p.m. - 9:00 p.m.
23rd District Police Station, 850 W. Addison
Alderman Tunney and The Expired Meter are hosting this seminar to help Chicago drivers learn how to successfully fight parking tickets and deal with red light camera and speeding tickets as well as learn about new driving laws and safety tips. For more information visit The Expired Meter or email seminar@theexpiredmeter.com.
Lincoln Park Chamber of Commerce, State of the Ward
Thursday, January 27, 11:30 a.m. - 1:30 p.m.
DePaul University Student Center, 2250 N. Sheffield Ave., Room 120AB
Alderman Vi Daley (43rd) and Alderman Scott Waguespack (32nd) will address business leaders on neighborhood goals and the future of the community. The 2011 LPCC Board of Directors will also be elected at this event. Tickets purchased at the door are $45/member and $50/non-member. For more information contact the LPCC office at 773-880-5200 or email Katie@lincolnparkchamber.com.
New Schools Expo
Saturday, January 29. 9:00 a.m. - 3:00 p.m.
Soldier Field, 1410 S. Museum Campus Dr., United Club Level One
85 of Chicago's new public elementary, high school, and charter schools will be showcased at this event. Parents can learn more about Chicago's schools, apply for admission, attend workshops, meet school leaders and enjoy a free screening of The Lottery. Parents wishing to apply on-site should bring copies of the parent's license or ID card as well as separate proof of residency (i.e. utility bill, mortgage, medical card, bank statement, check card, or voter registration card. Rental leases and cell phone bills are not accepted). Admission and parking is free. For more information on the event, directions, and parking instruction, visit the expo's website or call 1-877-7-MYCHOICE.
Lake View Citizens' Council, Skate Party & Reception
Saturday, January 29, 2:00 p.m. - 4:00 p.m (ice skate)
Rink at Wrigley, Clark and Waveland (ice skate)
The Lake View Citizens' Council is hosting a free skating event for Lakeview residents. There will be limited free skate rental also available for residents. Afterwards, join LVCC at Vines on Clark (3554 N. Clark St.) from 3:00 p.m. - 5:00 p.m. for a reception. Dues paid members will receive two free drink tickets and light food. Non-dues paid members of LVCC may attend for $10/person. If you plan to attend the reception, RSVP to president@lakeviewcitizens.org by January 27.
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