It has been a privilege to work on behalf of the people of District 97 this past year, and in my first year as your State Representative, I have brought many initiatives to Springfield that would help Illinois’ state government become more efficient.
I would like to highlight some of these for you today and go over my various forms of outreach I have used to remain at the forefront of our District’s main concerns. Obviously, an issue on everyone’s mind is the lack of a budget and the partisan divide that has gripped Springfield. At the root of the budget impasse is a fundamental disagreement between the Democrat leaders who control the House and Senate and the Republican Governor about how Illinois should proceed with allocating funds and taxing Illinoisans. On one side of the debate are the House Speaker and Senate President, who want to approve a wildly unbalanced spending plan and raise taxes immediately to close the funding gap. On the other side of the issue is our Governor, who has stated emphatically that he will not discuss additional revenues until fiscal reforms are put in place to control spending and eliminate waste. While this impasse moves on, I continue to help undo the issues that have helped create the deadlock.
During my first year, I held many discussions with my constituents across our District. We shared coffee, a bite to eat, and most importantly discussed current circumstances in Springfield. I also met many of you at my Kids’ Fair and Jobs’ Fair. It was very important to keep these lines of communication open during the budget impasse. With this same effort I brought my new website “Ideas for Illinois,” at which I openly ask for any and all ideas that could help the State better serve its people. In the coming year, I will be looking to bring homegrown legislation directly from my constituents. If negotiations and ideas can be exchanged from my valued constituents, certainly the State can start enacting the same openly negotiable policies. You can find this webpage here.
Moving on, there are many things negatively affecting various facets of Illinois’ operations. From a faulty procurement system that halts the State and its universities’ operations, to a faulty pension system that remains mishandled and looming even during a budget impasse, my legislative directives have widely covered many of Illinois’ biggest issues. Some of my initiatives attempt to fix long-standing problems the State has not yet acted on, and in my second year, I intend to see these initiatives moved properly in Springfield. Once some of these initiatives are given a fair hearing on the House Floor, I am confident the State will be more productive in all of its services, and budgetary struggles will become less of an issue. College Affordability This past year I brought my concerns about higher education funding directly to the House Floor. When compared to their public conference peers, tuition rates at Illinois’ public universities are 30%-60% more expensive (US News are World Report). Shockingly, despite the higher tuition across the board, Illinois funds nearly double the national average per Full-Time Equivalent, making it the third highest funder of higher education in the nation. This funding includes pension costs, which peer universities also deal with, but even when all pension costs are stripped, Illinois’ funding is well above the national average.
Illinois Higher Education Director James Applegate stated that we export more than 16,000 students than we import from other states to come into college. This is like exporting the entire enrollment at Eastern Illinois University twice over. When questioned about the high price of education in this state, university administrators typically mention the state’s procurement process. For example, some programs at the University of Illinois are forced by Illinois’ complicated procurement process to send their federal grants to Purdue University, where they can work more freely on various projects without the state’s hands getting in the way. The state’s cumbersome procurement process adds about $100 million in costs per year.
In an effort to analyze these issues, and combat the high financial responsibility set upon those who wish to have higher education in Illinois, I filed House Joint Resolution 66, which aimed to address higher education affordability, student retention, and also conduct a study of Illinois’ efforts to capture available federal grants. I will continue to champion these efforts in the coming year. Please watch the video of my presentation to the House HEREand HERE.
Open-to-Public Budget Debate Inquiry Frankly, I was shocked by many legislators’ denial of some of the obvious issues that have shackled the State, its schools, and its budget for so long, so I came home and asked if any local legislators would like to discuss Springfield’s problems with myself in an open debate. Unfortunately, none of my invitations were accepted, but regardless I held open discussions with concerned constituents on July 20 at Plainfield American Legion and August 10 at Cemeno’s Pizza. Constituents that did attend didn’t receive the bipartisan discussion I intended them to have, but they did receive the opportunity to talk with myself about my own impressions and ways to help the State.
Two-Year Budget to Bring Stability With the State now extremely overdue for a budget, and healthy negotiations being out of the question (as I saw), I’ve observed the State attempt to operate under four different budgets in the span of two years – the fiscal 2015 budget, the 2015 “fix” budget, the court-ordered current 2016 budget, and at some point, a 2016 budget that funds the remainder of this fiscal year. No financial institution or business can thrive without long-term planning, and the State of Illinois has not considered this fact in decades. With financial and economic devastations looming, I once again reached across the aisle to write about the benefits of a two-year budget in order to get this idea moving.
A longer-term plan would enable officials to shift attention to crucial issues like pension reform, property tax relief, job creation, and curbing the violence in many areas. Agencies, third-party service providers and universities would more confidently plan their year, and I think most importantly, a two-year budget also would take the 2016 elections out of the budget. The current budget process is terribly tainted by politics. Two-year budgets would put policy before politics. Coverage of this idea can be found HEREand HERE.
Pension Proposal After studying the State’s lingering pension obligations, I have filed House Bill 4427 in an effort to finally give pensioners an option to receive their dues. Skipping our obligated pension payments is a big example of failed state policy, as we see a higher portion of our current budget used to catch up to our obligations, and it has contributed to lowering our credit rating which means that more money is required for loan interest payments. If we were to reduce our unfunded pension liabilities it would have the opposite long-term effect, and our funds for all basic government operations would be less crowded. In filing House Bill 4427, I first understood that:
1. Every employee/retiree in a pension plan has a present value of their pension that is based on age, years of service, and salary. It is simply the amount of money necessary to have in the bank today earning interest to cover an individual’s pension costs for the rest of his life. Many of these “present values” are over $1 million.
2. Adding up all of these individual values is how we determine the state’s “liability” side of the ledger. The asset side is simply the value of the pension holdings.
3. If liabilities are more than assets, the difference between the two is the “unfunded pension liability.”
4. The Illinois Supreme Court ruled that diminishing benefits to remove pension liability is unconstitutional. We need a solution that addresses the pension liability constitutionally. Understanding that liabilities cannot be reduced by simply lowering benefits, I searched for a way to offer retirees an optional plan that would be considered an added benefit while reducing liabilities at the same time.
An optional plan is constitutional, and my proposal is rather simple. The state can offer retirees the following options:
- Keep your pension as it is.
- Choose an accelerated payment for the present value with a small discount to the state (this is where savings can be achieved).
- Select a combination of a partial pension annuity with a partial lump sum payment. Similar plans have been initiated in the private sector with many major companies that hold large obligations. For example, a retiree could be offered to keep a pension of $8,000 per month, take an accelerated lump sum payment of $1.1 million, or do a combination of the two ($4,000 per month with a $550,000 lump payment). The lump sum payment can be rolled into an Individual Retirement Account. This proposal offers many benefits to retirees and to the state. For retirees, it provides flexibility in retirement planning, as two retirees living in the same household might have a significant federal tax bill annually, and rolling some or all of the money into an IRA allows that money to grow tax-free. It also allows a retiree to pass some money on to the next generation because you can will a retirement account, but you cannot will a pension. It also provides further power and security to pensioners in knowing that if their money is in their account, it can no longer be touched by outside parties. Underscoring this need for action on pension reform, the Commission on Government Forecasting and Accountability (COGFA), has calculated the total unfunded pension liabilities of the State retirement systems at $111.2 billion as of June 30, 2014, based upon the actuarial value of assets. Thus I have filed House Bill 4427 and have collected bipartisan support from Representatives Morrison, Jesiel, Sente, and Wehrli, all of whom oversee the Pensions Committee. Representatives Martwick, David Harris, Franks, McDermed, and Andersson have also added their support. I was happy to discuss this proposal on Fox News Chicago and the Joe Walsh Show. It also received endorsements from Crain’s Chicago Business and Reboot Illinois. Workers’ Compensation Unless you are a business owner or have been injured on the job, you may not be familiar with the workers’ compensation system in Illinois or how it affects your pocketbook. Every business pays insurance premiums for workers’ compensation in the event an employee gets hurt on the job. This insurance is an essential protection for both employer and worker. The problem in Illinois is that workers’ compensation premiums are much higher than in other states because we have a broken and inefficient system. This is a major job-killer because when employers have to pay higher premiums, they lose money they could use to increase wages or hire new workers. Businesses aren’t the only ones paying higher premiums to ensure employees. State and local governments do, too, with taxpayers footing the bill. Hundreds of millions of dollars can be saved from the direct and indirect costs government incurs from workers’ compensation insurance. One of my first acts as a State Representative was to have an official study conducted by the nonpartisan Legislative Research Unit, which showed a direct yearly cost savings of $190 million to Illinois’ state and local governments if our workers’ compensation rates were merely average compared to other states, instead of one of the highest. The average state in America pays $1.85 per $100 of payroll in workers’ compensation premiums. Illinois pays $2.35 per every $100 of payroll. Fifty cents per every $100 adds up fast when you consider the billions in government payroll. Additional savings would be achieved in the cost of construction projects that state government contracts out. The differences between Illinois and other states are more glaring when you look at the rates for jobs that inherently are more dangerous. For concrete construction, Illinois has the highest premiums among all 50 states at a staggering $25.52 per $100 of payroll, compared to the national average of $8.80. For masonry (bricklaying), Illinois pays $18.19 compared to the national average of $9.15. For carpentry, Illinois pays $10.28 compared to the national average of $6.46. Is work in Illinois that much more dangerous than in other states to justify such a huge cost difference? It is doubtful. Extraordinary cost savings can be achieved just by Illinois enacting reforms that make us average. We don’t have to be the best or even in the top 10. If the government could save $190 million by making a common-sense change, imagine how many new jobs could be created by the men and women of our small-business community if they were allowed to compete on a more level playing field. What, then, are the solutions? One is to require a primary causation standard for all workers’ compensation claims, meaning any injury and resulting disability or aggravation of a preexisting condition must result from an activity directly related to employment. While this would seem to be common sense, it currently is not the law in Illinois. Another reform would be in the area of injury claims payment. Massachusetts has lowered its costs simply by having a system that pays workers’ compensation claims faster than any other state. This would get workers paid and back to work without the need for costly and lengthy litigation. Last, but not least, having injured workers go to doctors that specialize in rehabilitating employees and getting them back to work as quickly as possible would be another major reform. Workers’ compensation reform is attainable and within reach. It will take bipartisan cooperation in Springfield to develop a system that is fair to every worker, to employers and to taxpayers. Achieving this reform would benefit all of us and make Illinois immensely more competitive in the jobs market. I plan to continue to bring this needed reform to the House Floor in 2016. Task Force on Consolidation and Unfunded Mandates I was excited to be a member of the Task Force on Consolidation and Unfunded Mandates. The Task Force’s purpose was to study issues of local government and school district consolidation and redundancy, and to make recommendations that will ensure accountable and efficient government and education in the State of Illinois. The goals of this Task Force fell right in line with my own legislative initiatives, as they address the nitty-gritty issues that shackle our local governments and our local education systems. After offering up many initiatives that aim to make Illinois more efficient, it was very important that I contributed to this unique Task Force. With this Task Force we: Conducted a comprehensive review of State laws relating to local government and school district consolidation; Conducted a comprehensive review of State laws relating to unfunded mandates on local government bodies and school districts; Identified opportunities to consolidate, streamline, or eliminate duplicative governmental bodies, school districts, and taxing authorities; Identified opportunities to replace, revise, or repeal unfunded mandates placed on local governments and school districts; · Discussed solutions and impediments to the consolidation of local governments and school districts; Analyzed the success of programs and legislation with similar goals implemented in Illinois and other states; and Prepared a final report to the Governor and the General Assembly making specific recommendations to consolidate local governments and school districts. The Task Force held 16 meetings across the state and heard testimony from 33 experts representing government associations, nonprofit think tanks, researchers, and state agencies. It also received more than 85 proposals and has endorsed 27 recommendations on topics relating to local government consolidation and unfunded mandates. I plan on bringing some of these proposals and recommendations to Springfield in the coming year. I was thrilled to see the amount of well-informed constituents that inquired about this Task Force’s Final Report, and it can be found here. About 30% of District Office Budget Sent back to the State With the State of Illinois in dire need of a proper balanced budget, and the reforms I’ve discussed becoming more and more necessary, I took my own advice to the State’s budget process, and sent back about 30% of my district office’s allotment. I cannot go to Springfield and preach about the State turning to reforms, and living within its means, without doing the same myself. With this in mind, I have successfully sent thousands of tax-funded dollars intended for my office’s use, back to the State. I always intended to save the State at least 11% of my budget, but with a smart budget and the State always in mind, my district office is returning almost 30% of its funds. At this time the State of Illinois requires aid to its fiscal issues and I intend to help it in as many ways as I can. Withhold Legislators’ Pay During Budget Impasse Back in June, with Illinoisans under the threat of what is now an unprecedented budget impasse, I made it clear that it would be unfair for state legislators to accept pay in the event that state employees aren’t paid during an extended budget deadlock. Then I became the Chief Co-Sponsor of House Resolution 591, which deemed that legislators should not receive their salaries in a timely manner if state employees didn’t receive theirs on time, and I also sponsored House Bill 4225 to reject the scheduled cost-of-living increase for state legislators. My legislation was not allowed for consideration, but I believe the powers that be came around to it enough, in order to file copycat legislation that accomplished the same thing, one month later. I believe these types of initiatives helped make it clear who wanted to simply play party politics, and who wanted to work toward a budget that best serves Illinoisans currently struggling without it. It is terribly unfortunate that we still have bipartisan work to do. Fight for Term Limits Continues Another obviously needed change from the status quo of Illinois politics would be legislative term limits. We all need to work together on solutions that put Illinois back onto a path toward prosperity, and that path must include reforms to how we do business here. One of those key reforms must be the implementation of term limits for members of the General Assembly. I have co-sponsored HJRCA1, HJRCA10 and HJRCA28, which all sought to put term limits on the ballot. To end I’d like to thank you for giving me the privilege of working on all of these daunting tasks for the betterment of our communities. In my first year as a legislator, I believe I’ve opened the eyes of many to the solutions available to Illinois, and I will continue to work towards those efforts in 2016. Please watch this video of me standing against the status quo in Springfield. https://repbatinick.com/2015/05/07/rep-batinick-challenges-speaker-madigan-house-democrats-on-budget-process/