The McDermed Dispatch for April 23rd

Thank you to Michael Thompson and Kristin Lutz, both students at Lincolnway East, for being my ‘Pages for a Day’ last week in Springfield

Pension Problems
A long-term plan approved when Jim Edgar was governor in the ’90s created a spending ramp on pensions to alleviate then budgetary pressures and essentially push pension obligations off until the future. The ramp started in 1995 and under it, the State is scheduled to hit 90 percent funding level by 2045. The original forecasts of this plan expected liabilities to reach about $50 billion under the ramp before dropping back down. The State’s actual unfunded liabilities is $123.8 billion as of the latest report in 2016 and there are still 17 years to go before the ramp is scheduled to peak. The projections were off by so much because they assumed an overly optimistic 8.5% yearly return on investments and lawmakers have failed to follow the ramp in many years and instead spent money that should have gone toward pensions on other, more popular items.

The Civic Federation hosted a pension conference last week in Chicago which discussed the bad news for Illinois taxpayers. According to a J.P. Morgan report cited at the conference, a 20% tax hike is needed in Illinois to wipe out all of our unfunded pension liabilities.

To say that Illinois pension system is dire is putting it lightly and yet the House has yet to seriously discuss reform in the years that I have been in office. The General Assembly last tackled pension reform in 2013, but that legislation was struck down by the Illinois Supreme Court because the 1970 Illinois Constitution says that pension benefits “shall not be diminished or impaired”.

Republicans have filed a number of bills to address the crisis, such as a bill to provide lump-sum payouts in lieu of annual pension benefits or legislation to exclude part-time elected municipal officials from receiving pension benefits, but they are stuck languishing in the Rules Committee. The Rules Committee is a procedural committee that all legislation must pass through and is led by Speaker Madigan’s top two lieutenants in the House. 

Property Taxes
Last week I went before the House Revenue and Finance Committee for a hearing on two of my bills to help lower property taxes.

The Property Tax Extension Limitation Law (PTELL) limits the number of tax extensions (total taxes billed) for non-home rule taxing districts. Increases in property tax extensions are limited to the lesser of 5 percent or the increase in the consumer price index (CPI) for the year preceding the levy year.

While the PTELL was initially created to help slow the growth property taxes, instead the maximum has become the minimum every year. Many PTELL taxing bodies are incentivized to tax the maximum levy amount as allowed under the law, even if such an increase is unnecessary. I filed legislation supported by the Illinois Association of School Boards to allow school districts the option to return to the levy previously allowed under PTELL for 3 years after levying below the PTELL limitation. This would free school districts to levy only the amount necessary, thus creating responsible savings for taxpayers, while still being able to protect their students should unpredictable budgetary situations or impacts occur. It would incentivize school districts to levy below the maximum amount and the three-year recovery limitation would limit taxpayer subjugation to large tax fluctuations.

Another bill I filed requires that taxpayer money given to regional superintendents from a school facility occupation tax, a potential new sales tax, be used to pay existing debt service prior to it being used to pay direct costs associated with school facilities. Will County school districts are considering imposing such a tax and I believe we can provide property tax relief by requiring school districts to use this new sales tax to pay off existing debt before starting any ambitious new facility projects.  

Youth Tackle Football Ban Dead
A proposal to ban kids younger than 12 from playing tackle football has been tabled this spring because the sponsor believes it lacks enough votes to pass. Similar legislation is still being considered in other states, but in Maryland last month a House committee voted down a prohibition on tackling before age 14. Opponents of the bill argue that these kinds of decisions are best left up to parents and that a delayed introduction to tackling means that young kids won’t learn the necessary skills to safely play the game later.

Independent Redistricting Reform
Last week House Republican Leader Jim Durkin, along with all members of the House Republican Caucus, filed House Resolution 995 demanding an independent redistricting reform solution. Legislative district maps are redrawn every ten years based on the newest census results. In Illinois, the current process to draw both Congressional and State Legislative maps is left in the hands of the General Assembly and whoever is in the majority can draw them as they see fit. This results in gerrymandered districts and leads to noncompetitive legislative races. In 2016, of the 118 seats up for election in the Illinois House of Representatives, 72 featured just one major party candidate.

According to a poll from the Paul Simon Public Policy Institute, 72 percent of Illinois residents, including a majority of both Republicans and Democrats, support the creation of an independent commission to draw legislative district maps.