Illinois’ General Assembly to Override Governor Vetoes to Pass a Balanced Budget, but Forgot About WC Reform

Happy birthday, United States of America, land of the free, home of the brave!  We hope all of you enjoyed a nice holiday weekend and a fireworks extravaganza for the 4th of July.  While most of you were relaxing with family and friends, we continued to monitor the activities in Springfield, which included the Senate remaining in special session on our national holiday.  (Too many of the House reps played hooky that day to have a quorum, so the House took the day off.)

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You’ve been following our posts regarding proposed workers’ compensation reform bills that have been offered by both sides of the aisle.  Some of these represent true workers’ compensation reform, and some of the bills are basically “fake reform,” essentially formalizing existing case law.  At the beginning of the year, the plan was called the “Grand Bargain,” in which both parties would give and take to come to a balanced budget and at the same time enact some of the Governor’s “Turnaround Agenda” items, which included terms limits, pension reform and workers’ compensation reform among others.

What you may not realize, that two of the bills within the Grand Bargain, Senate Bill 6 (spending/allocation bill) and Senate Bill 9 (revenue bill) (SB 6 and SB 9) were included in that 14-bill package of the Grand Bargain where “this bill only become law if” all other bills in the Grand Bargain also become law.  (Workers’ Compensation reform was included in SB 12.)  But in May, House Democrats took the Senate Democratic sponsored bills 6 and 9 and unbundled them from the Grand Bargain. And the push to pass those bills continued through June.  When the legislation was presented in June it was $5B out of balance in the red, and it was clear that this would not pass the Governor’s desk, if it would even pass both houses.  Oh, by the way, all talk of pension reform, term limits, and workers’ compensation reform fell on deaf ears once the days leading up to the end of the fiscal year on June 30th began to tick into single digits.

So SB 6 was amended by permanently increasing personal and business income tax by . . . yes, $5B in revenue.  Viola!  The legislature now had a valid balanced budget without any spending reform.  If you think about it, this could have been proposed two years ago, but I digress.

The bills as amended passed in the House on July 2nd with the Senate concurring with the House amendments on July 4th sending the bills to Governor Rauner for signature the same day.  Then came the figurative fireworks in Springfield.  Governor Rauner as promised vetoed both bills on July 4th, and the Senate promptly that same afternoon passed a Motion on each bill to override the vetoes.  The bills then were sent to the House, which was not in session that day, for the same process.  Apparently the House was not as aggressive about its override as it took all of July 5th to add to the anticipation of what is to come, and that brings us to today, July 6, 2017.  The House is expected today to debate and vote on its Motions filed to override the Governor’s vetoes, and based upon the votes the House had on each bill on July 2nd, it is expected to be a done deal by the end of the day.

What does this mean for Illinois citizens and businesses?  Quite simply, it’s going to cost more to reside and do business here, and the State will continue to spend as it has for decades.  But the good thing is that with a balanced budget for the first time in years, the State will thrive and continue on, avoiding junk bond status.  Or will it?  That debate will continue for some time to come, but as the Wall Street Journal reported yesterday, “Indeed, a major rating firm said Wednesday that it continues to look at a possible downgrade of the state’s credit rating to a level no state has ever seen.” (“Illinois Budget Deal Would Leave Many Problems Unaddressed,” Quint Forgery and Heather Gillers, July 5, 2017).Illinois Junk State

Let’s hope the state’s citizens remember next election how we got here and that we make the effort to cure decades of mismanagement in Springfield by electing legislatures that will take responsibility to make those hard decisions, not the ones that assure reelection.  As for workers’ compensation reform?  We’ll let you know if they pull those bills out of the file cabinet in which they were tossed a few weeks ago.

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G. Steven Murdock has been an attorney with Inman & Fitzgibbons for 20 years, a partner for 13 of those and named Vice President in 2015. He also serves as the firm’s liaison to the Illinois Chamber of Commerce’s Employment Law and Worker’s Compensation Committee and monitors and provides input on pending legislation in Springfield affecting our practice.

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