McConnaughay Issues End of Session Report

A press release from State Senator Karen McConnaughay:

Senator McConnaughay’s End of Session Round-Up

This spring a number of issues were at play in the General Assembly including the budget, the future of the 67 percent tax hike, and education funding.

Karen McConnaughay

Karen McConnaughay

I would love to report that we solved them all and your future is secure, but unfortunately the state’s majority party has put off, yet again, making the tough decisions on these most pressing issues.

On May 30, just hours before we adjourned, Democrats passed a $35.4 billion budget that increases spending by raiding special purpose funds, like the road fund, underfunding the state’s real obligations, and using one-time revenues to pay for ongoing programs.

Worst of all, the budget appears to be digging Illinois into an even deeper fiscal hole that many believe will be used to justify making the 67 percent tax hike permanent during the lame-duck session after the November general election.

Today I promise you I will not vote for a lame-duck tax increase.

On June 16 I will host a free Citizens Utility Board Clinic at the Elgin Township Building in Elgin at 725 S. McLean Blvd. Staff from the Citizens Utility Board will be on hand to go over your phone bill with you and teach you tips and tricks for saving money. Please call my office at 847-214-8245 with any questions!

Your input is always vital to the work I do. This summer I will be spending my time in the district, meeting with constituents and making sure your voice is heard in Springfield. Please contact me or my office with questions or concerns you may have. You can also visit my legislative website at http://senatormcconnaughay.com/.

Karen McConnaughay
State Senator for the 33rd District

Budget Gimmicks Increase State Spending, Foreshadow Lame-Duck Tax Hike

While taxpayers can be happy that the FY15 budget was passed without an extension of the 2011 income tax hike, which is scheduled to be phased out starting in January of 2015, the debate over the future of that tax hike may have just begun according to Senator Karen “Every spring we watch the most important issue in the state, the budget, be held until the last minute,” said McConnaugnay.

“And every year we see a budget passed that is full of pet projects and new programs; and fails to address the fundamental issues with Illinois’ economy.”

When it became obvious during the final days of the legislative session that there was not sufficient support to pass a tax increase, the majority didn’t focus on core state obligations or reducing state spending. Instead they pieced together a budget that continues to fund failed programs, offers special earmarks and increases spending on new and expanded programs.

They also deferred payment of bills, underfunded state insurance payments and reversed certain Medicaid reforms intended to reduce state expenditures. The end result was the permanent addition of millions of dollars in spending pressures with no funds to cover those costs.

McConnaughay notes that the FY15 budget spends $35.4 billion in taxpayer money but redirects funds from important programs.

“Illinois is a transportation hub for the nation. Sadly, this year’s budget again diverts money from the Road Fund that should rightly go to preserving and strengthening one of the state’s greatest assets.”

While Republicans successfully fought the extension of the 67 percent income tax increase, as well as efforts to implement a graduated, or “progressive,” tax system, Democrats have indicated they plan to revive calls for an extension of the tax increase following the November election. Their stop-gap budget signals a post-election tax hike is imminent, and further brings into question Illinois’ financial status among investors and rating agencies.

“At the end of the day we’re watching a party in the super-majority play games with the people of this state’s hard earned dollars, and that is really unfortunate,” said McConnaughay. “A budget was passed last week, but the budget debate is just beginning. This debate will continue during the November lame-duck session after the general election when I can almost guarantee you will see a push to make the tax hike permanent.”

Illinois already has the lowest credit rating in the nation, and on June 3 Moody’s Investors Service released a statement expressing concerns over the revenue hole resulting from the Democrats’ inability to plan for the phase-out of the tax increase. Additionally, the use of one-time cash infusions to pay for permanent programs and the deferral of paying state obligations—gimmicks used in this most recent budget—have contributed to the state’s bond downgrades in the past.

While the state’s budget woes continue to dominate as the most critical policy issue facing Illinois, the dialogue on the state’s education funding formula and Governor Quinn’s Neighborhood Recovery scandal will likely continue throughout the summer and into the fall.

Debate on Education Funding Reform Continues

After drawing attention to the inequities in the state’s school funding formula in their March 2012 report, “School Funding in Illinois: An Examination,” Senate Republicans have continued to offer specific suggestions on how to infuse greater parity into the system.

Using a “back-to-basics” approach, Senate GOP lawmakers have suggested fully funding the Foundation Level grant at 100 percent, increasing the equitability of the state’s Poverty Grant, providing mandate relief for Illinois schools, eliminating the Chicago Block grant and instilling greater transparency into education funding.

“Unfortunately, the ‘reform’ bill we last week, which started as a bi-partisan effort to address inequities in the state’s school-aid formula, became a partisan plan that not only exacerbates existing inequities in funding, it makes the funding formula more complicated,” said McConnaughay.

“Additionally, the proposal radically redistributes what little funding most schools in this area receive from the state, and essentially asks local property tax payers to subsidize.”

According to McConnaughay schools in her district, like Geneva 304, are already funded almost entirely from local property taxes. Geneva 304 is currently funded 90.7% by local property taxes.

Under Senate Bill 16 they lose 79.9% of what little state funding they receive for education, taking resources away from students and placing additional burdens on local taxpayers. Additionally, it means that to maintain current funding levels property taxpayers would be on the hook to make up that difference.

After estimates for the bill were released by the State Board of Education McConnaughay reached out to the superintendents in her district who would be left to deal with its ramifications asking for their input on the legislation.

“Overwhelmingly superintendents told me that Senate Bill 16 would hurt students,” said McConnaughay. “One superintendent wrote me a letter telling me that the necessary cuts would result in devastating reductions to services and curricular, co-curricular programming. They told me that without a local referendum to increase property taxes, they would be forced to lay off teachers, leaving students with fewer opportunities and larger class sizes.”

While some amendments were filed to make the bill more palatable, McConnaughay says it still continues the controversial practice of “prorating” school funding.

Currently, Illinois has a “Foundation Level” of $6,119 per student, which has been established by the General Assembly as the base amount that schools should be provided to educate a student.

However, in recent years the state has “prorated” that base, leaving many schools with less than that minimum.

Senator McConnaughay also expressed concerns that the bill seemed to create a number of special benefits for Chicago Public Schools that are not made available to other districts in the state.

While the intent of the bill is to make the allocation of state education dollars more equitable, provisions that guarantee the Chicago Public Schools automatically receive 37% of all Early Childhood Education grant money only reinforce the very inequities the bill was supposed to Senate Bill 16 passed in the Senate on May 27 and now heads to the Illinois House where it is not expected to advance.

Neighborhood Recovery Scandal

Another issue that will continue to receive attention throughout the summer and fall is the mismanagement and abuse of taxpayer funds in the Governor’s Neighborhood Recovery Initiative Despite multiple ongoing investigations and continued controversy, the budget once again includes a $20 million lump sum for grants to community providers for at-risk community support programs, after school programs and youth employment opportunities. Reminiscent of previous funding for the failed NRI program, the grants would be administered by the Dept. of Labor.

However, Department officials did not request the funds, and could not confirm what the money was to be used for.

The long-criticized program became front-page news this spring when the Auditor General released a scathing report that not only criticized the implementation and management of the program, but found that Governor Quinn likely broke state law by shuffling funds among various accounts in order to circumvent the legislature’s authority to annually appropriate General Fund.

In the months since the audit was released there has been a steady stream of stories detailing problems with the program, and by May it was revealed that both the Cook County State’s

Attorney’s office and the U.S. Attorney’s office had launched criminal probes into the program.

More recently the Legislative Audit Commission has pursued its own investigation of the NRI.


Comments

McConnaughay Issues End of Session Report — 3 Comments

  1. Poor Karen.

    Goes from helping run one of the best counties in the State, to the Illinois version of the La Brea Tar Pits, Springfield.

  2. How does your phrase “increases spending by raiding special purpose fund” relate to your championing of MCCD tax hike and law change to enable raising of non-referendum bond debt?

    (Property tax rates here are 3.67% of property value. Their ‘special purpose’ is subsistence level survival, if that. Raiding that money for increased spending on a project of your personal desire…isn’t there a direct correlation between what you criticize and what you do?)

    PS: there is no shame, only honor, when a person admits she is wrong.

    Look at the Belmont Stakes-losing owner apologizing for his comments after the race.

    We all behave as driven by emotion and self interest.

    We can all learn something that makes us improve our own behavior, or try to make amends when our behavior damages others.

    How does your promise: “Today I promise you I will not vote for a lame-duck tax increase.” relate to your championing of MCCD tax hike and law change to enable raising of non-referendum bond debt?

    How does your statement: “The end result was the permanent addition of millions of dollars in spending pressures with no funds to cover those costs.” relate to your spearheading of the law enabling ability for MCCD to purchase more land without funds to pay for its upkeep?

    I could go on in this same vein but no one is listening.

    No one will answer.

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