Hur­dles for Dems at ses­sion’s start

Pen­sions, property taxes, ethics top list of is­sues

Chicago Tribune (Sunday) - - FRONT PAGE - BY DAN PE­TRELLA, JAMIE MUNKS AND JOHN BYRNE dpe­[email protected]­bune.com [email protected]­bune.com je­[email protected]­bune.com

The gov­er­nor and leg­is­la­ture face chal­lenges on pen­sions, property taxes and ethics.

Illi­nois law­mak­ers re­turn to Spring­field on Tues­day for a spring ses­sion that will be a test of whether Gov. J.B. Pritzker and the Demo­cratic-led Gen­eral Assem­bly can ad­dress is­sues at the root of the state’s lon­grun­ning prob­lems with fis­cal in­sta­bil­ity and po­lit­i­cal cor­rup­tion.

Reme­dies for the state’s no­to­ri­ously high property taxes, soar­ing public pen­sion debt and weak gov­ern­ment ethics laws top the agenda for law­mak­ers and the sec­ond-year gov­er­nor. All fig­ure to be es­pe­cially tough tasks in an elec­tion year and un­der the cloud of an on­go­ing fed­eral cor­rup­tion probe. Pritzker isn’t on the bal­lot, but vot­ers in Novem­ber will de­cide the fate of his sig­na­ture ini­tia­tive: a con­sti­tu­tional amend­ment that would shift the state to a grad­u­ated-rate in­come tax.

Fur­ther com­pli­cat­ing the po­lit­i­cal dy­nam­ics are Chicago Mayor Lori Light­foot’s con­tin­ued push for help from Spring­field on a Chicago casino, a new Demo­cratic leader in the state Se­nate and the on­go­ing fed­eral probe that has reached into House Speaker Michael Madi­gan’s in­ner cir­cle.

Pritzker said in an interview with the Tri­bune ear­lier this month that pass­ing a bal­anced bud­get is his top pri­or­ity. He also said he needs to bal­ance his “im­pa­tience” to get things done with “a de­sire to bring ev­ery­body along on this jour­ney to fix­ing the chal­lenges the state faces.”

“The fact is, I think we all want the same things in the end, and so I’m hope­ful we’ll be able to get more done this year,” he said.

Pritzker has the op­por­tu­nity to set the tone for the spring ses­sion when he de­liv­ers his State of the State ad­dress Wed­nes­day and his bud­get pro­posal next month. If his re­cent public ap­pear­ances are any in­di­ca­tion, Wed­nes­day’s speech likely will fo­cus on early child­hood ed­u­ca­tion and crim­i­nal jus­tice is­sues in ad­di­tion to property taxes, pen­sions and ethics.

The gov­er­nor had great suc­cess in his first leg­isla­tive go-round, work­ing with the Demo­cratic ma­jor­ity to pass all the ma­jor items on his agenda in­clud­ing recre­ational mar­i­juana le­gal­iza­tion, ex­panded gam­bling and a $45 bil­lion in­fra­struc­ture plan, in ad­di­tion to a bal­anced bud­get.

This year’s bud­get may well be sig­nif­i­cantly more chal­leng­ing than last year’s, which took ad­van­tage of an un­ex­pected $1 bil­lion April tax wind­fall. The gov­er­nor’s bud­get of­fice ac­knowl­edged the chal­lenge in a five-year fore­cast re­leased in the fall.

“Even with the bal­anced bud­get for fis­cal year 2020, the un­der­ly­ing struc­tural deficit of the state’s bud­get has not been ad­dressed,” the re­port says. The ad­min­is­tra­tion al­ready has asked agency heads to draft plans for a pos­si­ble 6.5% cut to their bud­gets.

While the gov­er­nor’s of­fice es­ti­mates the grad­u­ated in­come tax would bring in $3.6 bil­lion in an­nual rev­enue, it wouldn’t take ef­fect un­til Jan­uary 2021, half­way through the bud­get year. And its prospects at the bal­lot box are far from cer­tain.

House Repub­li­can leader Jim Durkin, who op­poses the gov­er­nor’s in­come tax pro­posal, said he be­lieves the bud­get can be bal­anced again with­out any new taxes.

“We do not need to seek ad­di­tional rev­enue from Illi­nois tax­pay­ers or Illi­nois em­ploy­ers,” Durkin said. “This bud­get can be ne­go­ti­ated, and we can ful­fill our re­spon­si­bil­i­ties to­ward all Illi­noisans who rely upon state gov­ern­ment.”

In the Se­nate, Oak Park Demo­crat Don Har­mon takes over as pres­i­dent after a bruis­ing bat­tle to suc­ceed John Culler­ton, who re­tired, that ex­posed di­vi­sions within the cau­cus. Har­mon will need to nav­i­gate his su­per­ma­jor­ity through any po­ten­tial ad­di­tional fall­out from the wide-rang­ing fed­eral cor­rup­tion in­ves­ti­ga­tion that has al­ready en­snared three Se­nate Democrats.

The fed­eral probe has spurred a push last year for a broad con­sid­er­a­tion of ways to strengthen the state’s ethics laws. Law­mak­ers in the fall passed a mea­sure lay­ing out more strin­gent rules for lob­by­ists, and tasked a new ethics com­mis­sion with mak­ing ad­di­tional pro­pos­als.

Pritzker plans to ask for changes in state law re­quir­ing more in­for­ma­tion be dis­closed on state­ments of eco­nomic in­ter­est, and he wants the Gen­eral Assem­bly to pass leg­is­la­tion bar­ring law­mak­ers from lob­by­ing other lev­els of gov­ern­ment, be­cause there’s “too much un­due in­flu­ence that a mayor can have on a state leg­is­la­tor or vice versa,” he said ear­lier this month

Re­pub­li­cans put for­ward a host of ethics pro­pos­als last fall in re­sponse to al­le­ga­tions that emerged from the fed­eral probe. Dur­ing the leg­is­la­ture’s brief fall veto ses­sion, law­mak­ers ap­proved a mea­sure re­quir­ing lob­by­ists to dis­close more in­for­ma­tion and cre­ated a task force to rec­om­mend fur­ther changes by March 31.

Law­mak­ers must con­stantly ask them­selves if they’re do­ing enough to safe­guard the public’s trust in gov­ern­ment, Durkin said.

“I can’t say with a straight face that we are in light of what we have learned and what we an­tic­i­pate will be com­ing down the road,” he said.

Like Pritzker, Durkin sup­ports a ban on leg­is­la­tors lob­by­ing other units of gov­ern­ment. He’s also spon­sor­ing a mea­sure that would re­quire law­mak­ers and House and Se­nate can­di­dates to dis­close more in­for­ma­tion about their per­sonal fi­nances, bring­ing them in line with what’s re­quired of judges.

Property tax re­form is an­other huge hur­dle. An ef­fort last spring to cou­ple the grad­u­ated in­come tax pro­posal with property tax re­lief fell short. The mea­sure, which would have tied a property tax freeze to voter ap­proval for the grad­u­ated tax amend­ment, didn’t get through the House, and a large leg­isla­tive task force to study the is­sue was cre­ated in­stead.

The task force con­sid­ered a range of ways to re­duce the reliance on property taxes, in­clud­ing con­sol­i­da­tion of school dis­tricts and other gov­ern­ment units, and ex­pand­ing the state’s sales tax.

But the task force missed a Dec. 31 dead­line to sub­mit its rec­om­men­da­tions.

A sales tax ex­pan­sion is not some­thing Pritzker is con­sid­er­ing, but he said Fri­day the task force’s draft re­port con­tains some good ideas “and we’ll be pur­su­ing those in the spring ses­sion.”

Re­pub­li­cans said their ideas were dis­re­garded in the draft re­port writ­ten by Democrats. Durkin none­the­less said he be­lieves there’s an op­por­tu­nity to make mean­ing­ful changes to the property tax sys­tem — “as long as there’s a will­ing­ness on be­half of (House Speaker Michael Madi­gan) and the new (Se­nate) pres­i­dent to do some­thing that is not just nib­bling around the edges.”

“We’re not real good at re­duc­ing taxes,” Durkin said. “The leg­is­la­ture is sadly good at rais­ing taxes and spend­ing more.”

While the House GOP re­jects many of the ideas put for­ward by Democrats, if the ma­jor­ity party wants to se­ri­ously con­sider re­duc­ing the num­ber of lo­cal gov­ern­ments, “they have a part­ner that is will­ing to take that up with them,” Durkin said.

Pritzker’s ma­jor ac­com­plish­ment in the fall leg­isla­tive ses­sion was push­ing through a pro­posal to con­sol­i­date nearly 650 subur­ban and down­state pen­sion funds for po­lice and fire­fight­ers into two statewide in­vest­ment pools.

But the gov­er­nor ac­knowl­edged there is still much work to do to ad­dress the un­funded li­a­bil­i­ties in the five pen­sion funds for teach­ers, state work­ers, univer­sity em­ploy­ees, leg­is­la­tors and judges. De­spite in­creased fund­ing, the state’s un­funded li­a­bil­i­ties grew by more than $3.5 bil­lion, to $137 bil­lion, from 2018 to 2019, ac­cord­ing to the leg­is­la­ture’s bi­par­ti­san Com­mis­sion on Gov­ern­ment Fore­cast­ing and Ac­count­abil­ity.

The ad­min­is­tra­tion last year put for­ward a five­pronged plan for ad­dress­ing the state’s pen­sion debt but so far has made lit­tle or no progress on ma­jor pieces of the plan.

Yet an­other task force as­sem­bled by Pritzker is sup­posed to is­sue rec­om­men­da­tions for state as­sets that could be sold or trans­ferred to the pen­sion funds, though the state is mov­ing on sell­ing the James R. Thomp­son Cen­ter in the Loop. The sur­prise wind­fall of tax rev­enue last April al­lowed the ad­min­is­tra­tion to shelve its most con­tro­ver­sial pro­posal: a seven-year ex­ten­sion of the dead­line for the pen­sion funds to reach 90% fund­ing. That fore­stalled a pos­si­ble con­fronta­tion with Demo­cratic law­mak­ers and the la­bor unions that helped elect Pritzker.

Pritzker said that pro­posal isn’t off the ta­ble en­tirely but would need to be part of a mul­ti­fac­eted ap­proach to the is­sue. He touted a mea­sure that ex­pands a pen­sion buy­out plan for state work­ers as an­other step his ad­min­is­tra­tion has taken.

“Ul­ti­mately, what I want to do is re­duce the bur­den on tax­pay­ers of hav­ing to pay this in­creas­ing bur­den of pen­sions and make sure that we’re not di­vert­ing funds from much needed ser­vices that peo­ple need, that work­ing fam­i­lies across the state rely upon,” Pritzker said.

The spring will also serve as a test of Light­foot’s abil­ity to strike deals in Spring­field after she came up empty in the fall de­spite a per­sonal visit to the Capi­tol.

Back again is the casino tax fix the mayor says she needs to make the pro­posed Chicago casino prof­itable and the long-shot real es­tate trans­fer tax change she tapped as the source of $50 mil­lion in her 2020 bud­get by charg­ing more for ex­pen­sive property sales. A state law­maker in­volved in the talks said ne­go­ti­a­tions over devot­ing a por­tion of that rev­enue to­ward al­le­vi­at­ing home­less­ness have stalled and the mea­sure ap­pears un­likely to move this spring.

Light­foot’s City Coun­cil floor leader, North­west Side Ald. Gil­bert Vil­le­gas, 36th, said the casino li­cense will be the pri­mary fo­cus.

“Our main pri­or­ity, num­bers one, two and three on the agenda, is the casino. It’s just so im­por­tant, be­cause the pen­sion pay­ments for po­lice and fire are tied to it,” Vil­le­gas said.

The real es­tate trans­fer tax and changes to cannabis rules re­main part of the city’s agenda, Vil­le­gas said, and the ad­min­is­tra­tion plans to talk to law­mak­ers about how to move those items as well. “But what we didn’t want to do was to go down there with such a su­per heavy agenda that we can’t get any­thing done,” he said.

Those heavy lifts are joined this spring ses­sion by the pres­sure black al­der­men are ap­ply­ing to Light­foot and state leg­is­la­tors to make changes to the rules govern­ing recre­ational cannabis sales.

African Amer­i­can mem­bers of the City Coun­cil have been com­plain­ing for months about the eq­uity com­po­nents of the mar­i­juana dis­pen­sary own­er­ship roll­out and the strict stan­dards for busi­nesses to al­low on-site smok­ing. They want Light­foot to press law­mak­ers to do some­thing about it.

Light­foot held off on a vote on her plan to al­low peo­ple to smoke pot in to­bacco shops that pay a $4,400 fee for the priv­i­lege of host­ing them. Mem­bers of the City Coun­cil Black Cau­cus pointed out few such busi­nesses ex­ist in pri­mar­ily black South and West side neigh­bor­hoods.

With land­lords al­lowed to ban weed smok­ing by renters in their units, al­der­men worry thou­sands of Chicagoans won’t have any­where in their com­mu­ni­ties to legally smoke, leav­ing them vul­ner­a­ble to ha­rass­ment by po­lice.

“Where these are go­ing to be al­lowed dis­crim­i­nates against the same com­mu­nity it was sup­posed to help,” said South Side Ald. Les­lie Hairston, 5th.

The Light­foot ad­min­is­tra­tion has said it would wel­come changes to the mar­i­juana rules, but the mayor’s team has stopped short of say­ing it would push hard for changes with so much else on the agenda.

Pritzker has worked with Light­foot on the casino tax struc­ture and has ex­pressed a de­sire to find a way to make sure the project can suc­ceed after a con­sul­tant found last sum­mer that the taxes law­mak­ers ap­proved are so high the project might fail to at­tract a devel­oper. While the gov­er­nor has said he wants the roll­out of recre­ational mar­i­juana to con­tinue with­out sub­stan­tive changes for the time be­ing, a spokes­woman on Fri­day said the ad­min­is­tra­tion looks “for­ward to work­ing with the city to con­sider ways to give lo­cal com­mu­ni­ties more op­tions to reg­u­late con­sump­tion within their bor­ders.”

CHRIS SWEDA/CHICAGO TRI­BUNE

Illi­nois Gov. J.B. Pritzker said in an interview with the Tri­bune ear­lier this month that pass­ing a bal­anced bud­get is his top pri­or­ity.

JUSTIN L. FOWLER/THE STATE JOUR­NAL-REGIS­TER

Se­nate Pres­i­dent Don Har­mon, D-Oak Park, left, is tak­ing over cham­ber lead­er­ship after a bruis­ing bat­tle to suc­ceed John Culler­ton, who re­tired.

ZBIG­NIEW BZDAK/CHICAGO TRI­BUNE

House Repub­li­can Leader Rep. Jim Durkin, seen in May, said of the grad­u­ated in­come tax, “We do not need to seek ad­di­tional rev­enue from Illi­nois tax­pay­ers or Illi­nois em­ploy­ers.”

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