Action Yet on Tap In Fee Bill
The Governor has yet to take action on Senate
Bill 3507, legislation that provides townships with the authority to collect
tap-on fees, but it also, inadvertently or otherwise, caps those fees for
townships and municipalities to 1/6 of the annual estimated charges for the
user. Consequently, it replaces the current actual cost required for
installation and annual usage municipalities now charge for actual cost.
During the last month there have been
discussions with the Governor’s Office explaining the deficiencies in the
legislation and the unfairness and negative impact of the newly imposed cap.
Additionally, phone calls and letters objecting to the language of the bill and
asking for a total veto have been forward to the Governor and his staff. The
final deadline for the Governor to act is August 24.
ISAWWA has also has been working with
township and municipal groups to coordinate the appropriate, focused messaging to the Governor’s Office so that
the his office has no doubt that there is unity in opposition and clarity as to
the action we wish him to take.
Rules Still Stalled
there has been no announced schedule for when the Joint Committee on
Administrative Rules (JCAR) might finally have the opportunity to weigh in on
the final proposed rules that would govern hydraulic fracturing in the state of
Illinois, proponents who feel they negotiated a fair deal and saw their
legislation approved in May, 2013 are getting restless and angry.
in July a number of labor and business leaders held a press conference
criticizing the Quinn administration for the now-400 day delay in producing a
final version of fracking administrative rules. According to the Illinois
Department of Natural Resources (DNR) process has been stymied by having to
respond individually to the over 35,000 comments to the initial rules filing
that were initiated by environmental groups opposed to fracking. No update has
been issued by the DNR as to the status of that response program. Pervasive rumors
hint that the administration would prefer to wait until after the November
election to release the final version of the rules so as not to take the chance
of alienating supporters the Governor may need in his reelection efforts.
DNR does finalize the fracking rules they will be forwarded to JCAR for final
action. Normally, JCAR decisions come fairly swiftly, by in cases where
policies they are to consider are controversial additional time may be taken.
That being the case, it appears that it maybe next spring before any final,
final rules are approved.
one saw it coming. No one. In golf, they would have called it a "chip shot”.
But the Illinois Supreme Court had other ideas and took a baseball path instead
by "throwing a curve in the strike zone” earlier this month and ruling
legislation that required all state retirees to pay for a portion of their
health care benefit unconstitutional and catching the batter flatfooted. The
6-1 ruling, in the opinion of many, sets the stage for a similar ruling on
Senate Bill1, the comprehensive pension reform bill enacted last year, after
which the gnashing of teeth will begin.
Senate Bill 1313 (maybe they should have chosen a slightly luckier number) was
successfully considered by the General Assembly in 2012 they prevailing legal
opinion based on pretty thorough research was that health care benefits were
not part of any constitutionally protected retirement benefit "contract” as is
stipulated in the Illinois Constitution. It was such a given that the state
began collecting premiums from retirees over a year ago without waiting first
for a Supreme Court ruling.
the majority decision the Court stated that any changes to a pension statute "must be liberally
construed in favor of the rights of the pensioner.” With what was thought to be
the "low hanging fruit” of the health care benefit now being excluded from
elements of reform, a lot of wheels will be turning in the upcoming months as
the powers that be grapple with the impact of this issue and the larger reform
issue ruling that loom in the not too distant future. The attorneys for the
objectors to Senate Bill 1 have already been before the judge in Sangamon
County asking for an expedited hearing as a result of the Senate Bill 1313
decision. At this point many feel the sooner the better so whatever else
happens to be in the statutory bag of tricks that can provide pension reform
and the associated fiscal relief can be discussed. But one of the disheartening
factors about this action by the court to those trying to craft a solution was
that it left very little in the way of openings for further pension reform
actions by the legislature … on top of having to probably pay back the money
that’s already been collected from retirees. Ironically, the Department of
Central Management Services issued an emergency rule in July seeking to double
the amount that state retirees paid for their health care. The court decision
has put the kibosh on that.
As a way to justify the need
for the Supreme Court to take positive action on Senate Bill 1 the preamble to
the bill cites numerous negative factors resulting from the pension morass that
require the use of state emergency powers. That would be the justification, it
was thought, the Court could use to justify the reforms even if they crossed
the constitutional line of contractual guarantee. It appears from the Senate
Bill 1313 decision that argument just isn’t going to fly. What’s worse, is that
the legislature’s second line of defense, the theory of "consideration” …
giving up certain benefits to retain or secure others (for example, giving up
the free health benefit in exchange for a compounded COLA) would also be in
deep trouble. So, it’s going to take some real creative thinking to figure out
a way around this one. As for making the argument that there should be pension
relief provided because of the state’s teetering fiscal condition the majority
opinion stated, "In light of the constitutional debates, we have concluded that
the provision was aimed at protecting the right to receive the promised
retirement benefits, not the adequacy of the funding to pay for them.” So much
for those ideas. Senate President John Cullerton has also apparently floated an
idea that would offer current state union employees a choice of a taking pay
raises or retirement COLAs rationalizing that younger workers would take the
raises and older workers would take the COLAs so the state would save oodles
over time that would have been set aside for future COLA payments. There is no
telling whether or not such a play would fly with the courts.
So far, there hasn’t been much
public discussion about possible alternatives to provide some fiscal relief
that Senate Bill 1313 and Senate Bill 1 would provide. If Senate Bill 1 were to
be held to be constitutional it was estimated that the cost to the pension
systems would have decreased by $1.5 billion in FY 2016. Now, somehow, there’ll
be a need to absorb that into the budget unless some other means can be found.
Are there alternatives? A number of obvious ones have been suggested by
observers such as extending the temporary income tax and dedicating a portion
to pension costs, extending the pension schedule from the current 30 year full
funding goal to some longer term that could cost extra billions over the long
term but provide much needed relief now, and reviving the proposal to make
local school and community college districts responsible for paying their
portion of pension costs rather than the state. But, whatever the alternative
solutions may be there is hope that discussions of possible solutions take
place sooner rather than later.
Talk On The Table
far as statewide campaigns go July is normally a quiet month with candidates
positioning themselves for the fall stretch run, but July, 2014 has been
anything but quiet as far as gubernatorial candidates are concerned. And
interesting that "fireworks month” has been the one where the state’s fiscal
condition has been a major focus and a major candidate’s tax proposals have
been released for public consideration.
has been in the fiscal dumps for years. Up until this last session of the
legislature efforts have been made to trim the debt which at one time was
upward of $10 billion and it has been cut in half. While the legislature
reverted to their old ways in 2014 that will carry over $1.5 billion in debt to
the next fiscal year, for the previous four years there was both a focus on
reducing outstanding bills and a recovering economy that helped narrow the gap.
In fact a few weeks ago the Governor announced that the state’s unpaid bills
had dropped just under $4 billion. Comptroller Judy Topinka put the number at
approximately $4.5 billion because of the way the Governor’s Office was
counting health care billings. Nevertheless, there has been an improvement but
there’s still a long, long way to go.
next big question facing the General Assembly and the next governor is the fate
of the temporary income tax increase enacted four years ago. The Governor has
made making the tax permanent a linchpin of his re-election efforts and pushed
the legislature to enact the extension during the spring. That move failed but
he has continually pressed for the need this summer arguing that the Illinois
can ill afford to lose the $3.6 billion in annual revenues that would make
efforts to make deficits disappear almost impossible in the shorter term.
until mid-July Quinn’s November opponent, Bruce Rauner, has been coy about
plans to address Illinois’ fiscal issues, relating that plans were in the works
and would be released in due time. That time arrived, at least partially, two
weeks ago when the first part of his plan was announced. Most expected that
Rauner’s plan would contain the mantra of letting the temporary income tax increase
expire as scheduled next January. Instead, his plan called for a phase-out of
the extension over four years, meaning he is willing to see the higher tax rate
renewed for a limited time. His plan did not provide a phase-out schedule.
Rauner’s plan also includes a freeze on local property taxes and the extension
of service taxes to include 26 various services. His campaign predicted that
the new service taxes that cover such things as interior design services,
janitorial services, attorneys, computer programming, personal property
rentals, printing, and golf club memberships would raise approximately $600
million per year. If/when the temporary income tax expires there would be a
revenue gap of $3 billion to overcome, but there no doubt will be more information
and discussion about the various plans of both candidates to set the state on a
course for solvency as the campaigns progress.
is one interesting aspect to all this. Over the last twelve years that
Democrats have controlled the legislature and the Governor’s Office legislative
Republicans have generally been content to let the majority party do any heavy
lifting regarding revenues and budget reductions. Should their candidate win in
November he is going to expect cooperation from his own party’s legislative
delegation to support his initiatives, including his revenue plans. Convincing
any to vote for tax initiatives would not be easy and would not be pretty, but
would certainly be fascinating to watch.
decades various Illinois state administrations have looked for ways to maximize
the return of federal dollars back home and parity has never been achieved. In
fact, it’s remained fairly stagnant over the years, and Illinois has never been
a state that receives more than it sends to Washington. Last month a group
known as "Wallet Hub” did a study on how well states did as to various aspects
of federal largess and Illinois didn’t fare too well. If there is good news
it’s that we’re a not a state dependent on the federal government, ranking
second overall as one of the least dependent. The bad news is that we only get
$.56 back for every dollar we send … and are listed as the third worst in that
category. Delaware was ranked as the least federally dependent state, followed
by Illinois, Minnesota, New Jersey and Connecticut.
five states who receive the most federal monies coming back to them? The leader is South Carolina ($7.87) followed
by North Dakota ($5.31), Florida ($4.57), Louisiana ($3.35), Alabama ($3.28),
Hawaii ($3.19) and Mississippi ($3.07). Ironic that those states that feel the
strongest about cutting federal spending and balanced federal budgets have the
most to lose should that occur.
Rulemakings of Note
- IEPA adopted an amendment to
"Permits" effective 6/30/14 that allows EPA to issue
construction permits to a community water supply even if it is in
violation of the Environmental Protection Act or regulations when the
requested permit is for construction or installation of equipment
necessary to meet general public water supply requirements in 35 Ill Adm.
Code 601. Municipal water supplies may be affected.
- IEPA also adopted amendments to
"Testing Fees for Analytical Services" that implement provisions of Public Act
97-220 eliminating requirements that EPA determine drinking water program
analysis fees in consultation with the Community Water Supply Testing
Council. Instead, EPA must base its annual fee determination on actual and
anticipated testing costs. The rulemaking further updates the program's
notification and participation process. Small businesses or small
municipalities that test or operate public drinking water supplies are
affected by this rulemaking.
Questions/requests for copies of these two EPA rulemakings: Rex
L. Gradeless (217/524-3332) for Part 652 and Sara Terranova (217/782-5544) for
Part 691, EPA, 1021 N. Grand Ave. E., Springfield IL 62794-9276.
- DPH has proposed amendments to
"Water Well Construction Code" adding a definition of
"storm sewer"; reflecting the agreement between DPH and closed
loop and water well drilling industries regarding the setback requirements
between such wells and sources of contamination, specifically sewers. This
rulemaking may have an effect on closed loop well contractors.
Questions/requests for copies/comments on the proposed DPH rulemaking
until 9/8/14: Susan Meister, DPH, 535 W. Jefferson St., 5th Fl., Springfield IL
62761-0001, 217/782-2043, e-mail: firstname.lastname@example.org.
Sheri Jesiel (R-Gurnee) has been appointed to replace Rep. JoAnn Osmond who
Chuck Jefferson (D-Rockford) has resigned. No replacement has yet been named.
are relevant dates for the legislative session:
- November 19, 20, 21 – first veto
- December 2, 3, 4 – second
veto session week
listed are those that have been sent to the Governor for final action.
– Rep. W. Davis /Sen.
Sandoval - Provides that the Illinois Commerce Commission shall require all gas,
electric, and water companies with at least 100,000 customers under its
authority, all local exchange telecommunications carriers with at least 35,000
subscriber access lines, and a person or entity providing cable or video
service to submit an annual report by April 15, 2014 and every April 15
thereafter, in a searchable Adobe PDF format, on all procurement goals and
actual spending for female-owned, minority-owned, veteran-owned, and small
business enterprises in the previous calendar year. Provides that each participating
company shall include certain specified information in its annual report.
Provides that each annual report shall include as much State-specific data as
possible. Provides that the Commission and all participating entities shall
hold an annual workshop open to the public in June of 2014 and every year
thereafter on the state of supplier diversity to collaboratively seek solutions
to structural impediments to achieving stated goals. (Status – Sent To Governor)
HB 5785 – Rep. Franks/Sen. Biss - Amends the
following Acts and Codes to provide that, upon a majority vote of the boards of
the entities created under the following Acts and Codes in favor of the
proposition to annex or consolidate, then that entity shall cease: Property Tax
Code, Counties Code, Cemetery Maintenance District Act, Civic Center Code,
Conservation District Act, Downstate Forest Preserve District Act, Public
Health District Act, Tuberculosis Sanitarium District Act, Museum District Act,
Illinois International Port District Act, River Conservancy Districts Act,
Solid Waste Disposal District Act, Street Light District Act, Surface Water
Protection District Act, Water Service District Act, Water Authorities Act,
Water Commission Act of 1985, and the Illinois Highway Code. Provides that on
the effective date of the annexation or consolidation, all of the rights,
powers, duties, assets, liabilities, indebtedness, obligations, bonding
authority, taxing authority, and responsibilities of the entity shall vest in
and be assumed by the governmental unit assuming the former entity's functions.
(Status – Sent To Governor)
SB 2770 – Sen. Althoff/Rep. Tryon - Amends the
Public Water Supply Operations Act. Provides that every community water supply
in Illinois, with specified exemptions, shall have on its operational staff,
and shall designate to the Agency in writing, either (i) one Responsible
Operator in Charge who directly supervises both the treatment and distribution
facilities of the community water supply or (ii) one Responsible Operator in
Charge who directly supervises the treatment facilities of the community water
supply and one Responsible Operator in Charge who directly supervises the
distribution facilities of the community water supply. Defines
"Responsible Operator in Charge". Establishes duties of Responsible
Operators in Charge. Provides that a violation of the Act by a Responsible
Operators in Charge shall be enforceable by administrative citation. (Status – Sent To Governor)
– Sen. Kotowski/Rep. Nekritz - Amends the Environmental Protection Act. Removes a
provision requiring rule to include a requirement for a local match of 30% of
the total project cost for projects funded through grants. Adds to the
definition of "treatment works". Provides that the Water Pollution
Control Loan Program shall be used and administered by the Environmental
Protection Agency to provide any financial assistance that may be provided
under a specified provision of the Federal Water Pollution Control Act for any
projects eligible for assistance under that provision. (Status – Signed By Governor – PA 98-782)
– Sen. Link/Rep. Osmond - Creates the Lake County Prescription Drug Disposal
Pilot Program. Provides that the program shall facilitate the collection,
transportation, and disposal of pharmaceuticals by law enforcement agencies.
Requires the Director of the Illinois Department of Public Health to submit a
report on the collection efforts and overall effectiveness of the program to
the General Assembly and the Governor by January 1, 2016. (Status – Sent To Governor)
SB 2966 – Sen. Steans/Rep. Cassidy – Creates
the Urban Flooding Awareness Act. Defines "urban flooding". Provides
that, by June 30, 2015, the Department of Natural Resources, in consultation
with the Illinois Emergency Management Agency, the Illinois Environmental
Protection Agency, the Illinois Housing Development Authority, the Department
of Commerce and Economic Development, the Department of Insurance, the Federal
Emergency Management Agency, the Metropolitan Water Reclamation District of
Greater Chicago, the Illinois State Water Survey of the University of Illinois,
and other State, regional, and local storm water management agencies, thought
leaders, and interested parties, shall submit to the General Assembly and the
Governor a report that reviews and evaluates the latest available research,
laws, regulations, policies, procedures, and institutional knowledge concerning
issues of urban flooding. (Status – Sent
– Sen. Biss/Rep. Fortner - Amends the Illinois Water Well Construction Code.
Changes the definitions of "modification" and "closed loop
well". Makes other changes. (Status
– Sent To Governor)
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