Illinois’ budget troubles cannot be understated. The state’s daunting $110 billion unfunded pension obligation severely limits the state’s ability to meet its annual education, public safety, transportation, and Medicaid costs, and it heavily factors into its worst-in-the-nation credit rating.

Illinois’ pension payment next year is expected to rise to $8 billion. That means 25 percent of every state budget dollar will go to pensions (for comparison, the national average for state and local governments is less than 10 percent).

The state’s financial future could be even more troubling if the Illinois Supreme Court strikes down the General Assembly’s 2013 pension reform legislation. Many experts expect that to happen based on past rulings. A lower court in Sangamon County has already ruled the law unconstitutional.

I did not support the pension legislation because I believe, and still do, that the reforms did not properly address the real problem. Even if the law survives a Constitutional challenge brought on by the state’s public sector unions, the state’s unfunded pension liability will only be rolled back to 2009 levels—when Illinois already had the worst pension crisis in America. Rewinding the clock on the state’s pension debt is better than to have no reform at all, but let’s not pretend that we have anything close to a permanent solution yet.

The Illinois Constitution states that, “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

Attorney General Lisa Madigan will defend the pension reform law by arguing that because the state is facing an emergency situation, the state’s police powers give it the authority to change the terms of state workers’ pension benefits.

Both sides have strong legal arguments. The law does reduce benefits, and courts have granted states extraordinary police powers in extraordinary situations. The justices will have to determine which argument has the most merit.

In my view, we must not look at the eventual decision by the Illinois Supreme Court as the end of the matter. Whether the courts side with the state or with the unions, the fact remains that the only permanent solution to the state’s $110 billion pension crisis is to change the Illinois Constitution, which is something my colleague Rep. Joe Sosnowski has already filed legislation to do.
The free pass to use emergency police powers to fix the state’s pension system will only last so long. To get to where we need to be, Illinois needs to change its constitution.

I am supporting Rep. Sosnowski’s efforts to amend the Illinois Constitution. Yes, this will be a long and difficult process, but it is the only way to rescue Illinois—for its public workers and its taxpayers.

For too many decades, politicians have promised public sector workers retirement and health care benefits that cannot be sustained by the rest of the taxpayers who underwrite them. These benefits continue to be paid long after these politicians have left office. Residents can and do move to states that are run better than Illinois, taking their taxes and participation in our state’s economy with them. Residents who cannot move face dramatically increased taxes and reduced personal spending and investment, while suffering from diminished government services—even in critical sectors.

Pensions are consuming too much of the state’s revenues and are threatening our ability to pay for today’s public salaries, services, and capital investments while saddling future generations with too much debt. We need a permanent solution beyond the last change to the state’s pension law, and that begins with a change to our constitution.
In response to the Illinois House approval today of House Bills 317 and 318, State Representative Tom Morrison (R-Palatine) has issued the following statement:

“Today the Illinois House took bold action to fix the sham budget approved by Democrats last year. The fiscal year 15 budget was out of balance by $1.6 billion, a fact that former Governor Pat Quinn knew full-well when he signed it. Through these two bipartisan votes we have prevented devastating service disruptions in key budget areas like court reporters, services for the mentally ill and developmentally disabled and payroll at our prisons.”

“It is important to note that granting emergency budget authority to the Governor is not without precedent. Similar authority was given to former Governors Quinn and Edgar. My hope is that the Senate follows our lead and approves these two bills so Governor Rauner will have the flexibility he needs to balance the budget he inherited in January.”

Spring Session Well Underway in Springfield
The General Assembly is fast-approaching the midway point of the 2015 Spring Session. The bill filing deadline was Friday, February 27, and by the close of business that day, House members had turned in 4,140 substantive and appropriations bills for their colleagues to review.  Not all of these bills will get out of committee for full House consideration.  Some filings, such as appropriations bills and resolutions, will continue after the deadline.  

House committees have until March 27, to look at the bills filed before the deadline.  Bills that fail to meet this deadline can be worked on by their sponsors and other interested parties for possible future action in the 2016 spring session.  The status of bills filed in the Illinois House and Senate can be found on the Illinois General Assembly  website.

Last week I was honored to be joined in Springfield by Dave Parulo, President of Woodfield Chicago Northwest Convention Bureau, and Rolling Meadows constituent Andy-John Kalkounos.

Supreme Court Hears Oral Arguments in Pension Case
The Illinois pension reform law enacted in December 2013 faced questions before the Illinois Supreme Court at oral arguments on Wednesday, March 11.  The Illinois Solicitor General, advocating for the law, stated that the controversial law had been enacted to solve a fiscal emergency.  Established constitutional law authorizes a state, in furtherance of its constitutional duty, to exercise what are called “police powers” that potentially override other considerations.  Plaintiffs seeking to strike down the law say that it improperly violates a section of the state Constitution.  Illinois has the worst-funded pension system of the 50 states.  A decision by the state Supreme Court, which is expected later this spring, could affect budget and pension law policies that will be before the General Assembly as it approaches the May 31 adjournment date.

Slow Economic Growth continues in Illinois
The staff of the Commission on Government Forecasting and Accountability (COGFA) presented their FY16 Economic Forecast  in Springfield on Wednesday, March 10.  COGFA is the nonpartisan economic agency of the Illinois General Assembly, and their Revenue Update for FY15 and numbers for FY16 will be key background data to be used by the General Assembly as they modify the State’s FY15 budget and craft a FY16 budget to meet the urgent fiscal needs of the State. 

COGFA’s numbers confirm that the post-2009 Illinois “recovery” has been the slowest economic expansion of the post-World War II period.  In each previous recession, not only were the rates of decline in economic output less severe, but the ensuing recoveries were faster and steeper.  Illinois economic trend lines, starting in 2010, show steady but very shallow, palely upward-trending movements.  New jobs are created in relatively low numbers and are being created, in Illinois, in insufficient numbers to force increases in median overall wage rates.    

The pale post-2009 “recovery,” combined with the pushdown of State income tax rates in January 2015 are two forces that continue to combine to create a worsening State of Illinois budget crisis.  A spreadsheet presented to staff by the Commission shows net income tax revenues dropping more than $4 billion in FY16, below what would have been paid to the State under the tax rates in effect in FY14.  Growth rates in tax revenues attributable to underlying rates of growth in the Illinois private-sector economy are expected to make up only $500 million of the lost income, leading to a structural deficit of $3.5 billion in FY16.  To this number is supplemented accumulated past-year deficits and unpaid State bills of many billions of additional dollars, plus the spending pressures created by many “entitlement” lines within the State’s budget.   

Unemployment Remains Higher than U.S. as a Whole, but Drops another 0.1%
The figures for January 2015, reported on Thursday, March 12 by the Illinois Department of Employment Security (IDES), show that Illinois’s jobless rate fell from 6.2% to 6.1% in January 2015.  The same number was 8.2% in January 2014, down 2.1% over the 12-month period.

Soft spots in the statewide economic picture complicated the continued trend toward lower unemployment. Illinois employment – the number of Illinois residents with nonfarm payroll jobs – also dropped by 7,100 jobs in the same month.  The declining employment and unemployment numbers reflected a stagnating Illinois population and the continued movement of many Illinois residents out of the labor force altogether. 

Many Parents Call for Allowing their Children to Opt Out of PARCC Tests
PARCC standardized tests, which utilize an online platform that students are expected to interact with as they take the test (rather than the format, familiar to their parents, of filling in bubbles on a piece of paper) began to be administered throughout Illinois on Monday, March 9.  The testing cycle is expected to continue for approximately four weeks.  Data from the test will be used to evaluate Illinois public and charter school students, teachers, schools and school systems.

Many parents are concerned about the new PARCC system, which from their point of view was sprung on their children without recourse and without sufficient warning.  No current law allows parents to withdraw their children from the PARCC test, which is supposed to be given to every eligible child in order to generate statistically significant results that can be used to gauge everyone’s performance.  Furthermore, the federal government has sent warning letters to Illinois’ State Board of Education to remind educators of the nexus between federal school aid and compliance with the order that students all take the test.  I have co-sponsored HB306, legislation that would give parents the ability to opt their children out of the tests.

Attitudes by parents toward the PARCC mandate is becoming increasingly coordinated with resistance toward other mandates imposed by schools upon children, such as mandated sex education and compliance with certain health benchmarks.  The “Chicago Sun-Times” describes the issue from the standpoint of concerned parents.  

Comptroller Munger Urges Illinois Individual Income Taxpayers to Register
The Illinois Tax Refund Alert system, rolled out this spring by new Illinois Comptroller Leslie Geissler Munger, allows taxpayers to monitor the status of their Illinois tax returns, including an automated text-messaging system.  Similar to the familiar warnings that many of us get when our phone or cable bill is due, the test message will tell eligible taxpayers of their payment notifications.   Registration is free through the portal.

As always, please do not ever hesitate to call me or write to me about issues that are important to you. You may reach my Palatine District office at (847) 202-6584 and my Springfield office at (217) 782-8026. You may send emails to If you are ever planning a trip to Springfield, please let my Springfield secretary know so that I may adjust my schedule and meet with you. It is a pleasure to serve you.

A bill that would increase the frequency of actuarial reviews of the State’s five public pension systems was approved unanimously in the Illinois House on Thursday.

According to the bill’s sponsor, State Representative Tom Morrison (R-Palatine), current law only requires a thorough investigation into the pension systems every five years. “A more frequent actuarial study can ensure we are making the right payments to stay on track with our obligations, especially since we now have new Tier II employees in our pension systems,” said Morrison. “These actuarial reviews are incredibly important, because the data leads to recommendations that may be implemented by the pension boards.”

HB422 would amend the Teachers’ Retirement System, State Universities’ Retirement System, State Employees’ Retirement System, Judges’ Retirement System and the General Assembly Retirement System by requiring that the actuary of each system conduct an investigation of the system every three years rather than five years as is currently written in the statutes. Each review would examine the mortality, retirement, disability, separation, interest and salary rate assumptions used by the system for accuracy.

“Allowing for more frequent small changes in system assumptions prevents the need for drastic changes, which ultimately lead to difficulty in budget planning,” Morrison said. “The new data would provide many benefits, including greater predictability for our annual pension payments.”