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The Majority Report 07/16/17 - Setting the record straight

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Capitol grounds

Setting the record straight on the balanced budget

Earlier this month state lawmakers took action to improve Illinois' financial stability and ease a devastating burden on universities and human service providers after two years without a state budget under Gov. Bruce Rauner.

No sooner did they finalize their work passing a balanced state budget did objectors fire up a misinformation campaign in the hope of confusing taxpayers about the measures that were passed to restore some certainty to the state's fiscal outlook, stave off a junk credit rating and help us to begin paying down nearly $15 billion in backlogged bills.

Separate fact from fiction below and learn more by going to IllinoisSenateDemocrats.com.

 


Pension reform: Savings and fairness

The pension reforms in Senate Bill 42 seek to balance fairness for the worker, savings for the taxpayer and funding manageability for the state of Illinois.

A Tier III hybrid plan will reduce costs to state retirement systems and taxpayers through a variety of means, including rebalancing the full burden of financial market fluctuations away from taxpayers.

Read more about pension reform.

 


Revenue: A bipartisan agreement

Under Senate Bill 9, the state income tax rate for individuals increases to 4.95 percent from 3.75 percent. This represents a 1.2 percentage point increase.

This rate is less than the 5 percent rate that was in effect betwen 2011 and 2014. Gov. Bruce Rauner agreed to the new rate, which was negotiated with Republican lawmakers.

Senate Bill 9 contains no service taxes, no satellite or streaming taxes and no soda tax. The budget plan introduced by Republicans in June had a 4.95 percent tax rate plus taxes on services such as lawn care.

Read more about the Senate's revenue plan.

 


Reforms passed by the Senate

Although Gov. Rauner and Republicans claim the Senate passed a budget without reforms, the Senate has met every demand the governor had.

Education funding reform: Senate Bill 1 overhauls Illinois' worst-in-the-nation school funding formula by enacting an evidence-based model. Passed both houses of the Legislature and is being held in the Senate to give the governor time to reconsider his threat to veto it.

Government consolidation: Allows counties to dissolve duplicative local governments by referendum. Awaiting the governor's signature.

Property tax relief: Implements a two-year freeze on property taxes for local government bodies. Passed the Senate on May 30.

Workers' compensation reform: Maximizes efficiencies in Illinois' workers' compensation system while retaining the basic protections workers have enjoyed for more than 100 years.

Pension reform: Implements a third tier of pensions for new hires that is similar to a 401(k) and is estimated to save the state $1.5 billion. Awaiting the governor's signature.

Term limits: Limits the Senate president and the Senate minority leader to five terms, lasting a maximum of 10 years. Resolution was adopted by the chamber Jan. 11.

Purchasing reform: Eliminates barriers to vendor participation and creates cost savings through more efficient procurement practices. Awaiting the governor's signature.

Read more about the Senate's reforms.

 


Paying down the bill backlog

Illinois currently has nearly $15 billion in backlogged bills. The backlog has tripled since 2015.

Senate Bill 42 authorizes the state to issue $6 billion in bonds to pay down the backlog and $1.5 billion in sweeps and interfund borrowing. Backlogged bills accrue interest, and so far the state has amassed about $800 million in interest on this debt, according to the Illinois comptroller.

Read more about Senate Bill 42.

 


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