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Around The Statehouse

Pritzker signs pension consolidation bill into law

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Dome Damage

The Statehouse's dome rises about 125 feet higher than the inner dome, which made of colored stained glass covered by a hard shell.

SPRINGFIELD — A new law signed by Democratic Gov. J.B. Pritzker Wednesday, Dec. 18, will consolidate 649 downstate and suburban police and firefighter pension funds into just two.

Pritzker signed the measure, passed in the recent fall veto session, in Chicago and hailed it as an initiative 70 years in the making.

“Bipartisanship in this General Assembly has achieved what none of their predecessors have been able to do: consolidate the (nearly) 650 downstate and suburban pension funds to just two, amplifying their investment power and reducing the burden on property taxpayers,” Pritzker said in a news release. “Working together, we are helping hundreds of cities in Illinois alleviate their spiraling property tax burdens, and just as importantly, we’re showing that Illinois can tackle its most intractable problems.”

The governor’s office said Senate Bill 1300, the legislation he signed Wednesday, will leverage “$15 billion in assets — $8.7 billion in the police fund and $6.3 (billion) in the fire fund — to increase investment returns and lower management costs.” It estimated the new law would create greater returns from $820 million to $2.5 billion over the next five years, and “billions more over the next 20 years.”

The bill passed with broad bipartisan support by tallies of 96-14 in the House and 42-12 in the Senate.

It was also supported by the Associated Fire Fighters of Illinois, the Illinois Fraternal Order of Police and the Illinois Municipal League, a statewide organization that represents local communities throughout Illinois

“Consolidating the assets of the … downstate public safety pension funds throughout Illinois will help provide stronger investment returns for active and retired public safety employees and reduce redundant administrative costs on Illinois’ taxpayers,” IML Executive Director Brad Cole said in a release. “This is a good first step forward on the complicated and comprehensive issue of pension reform.”

Despite bipartisan support, detractors, including several Republicans, opposed a provision that retroactively enhances benefits for so-called “Tier 2” employees — those hired after Jan. 1, 2011, when the state implemented new retirement systems with substantially lower benefits.

Several pension experts, however, have said the provision was necessary because many of those positions are not covered by Social Security. That’s allowed under federal law known as a “safe harbor” provision, but only if the benefits are at least as generous as what Social Security would pay.

The governor’s office said the new law “brings Tier 2 pensions into compliance to avoid future additional liabilities, which is estimated to cost $70 to $95 million while projected investment gains can generate an additional $820 million to $2.5 billion.”

School funding and property taxes

Two researchers are suggesting the best way to reduce property taxes in Illinois is for the state to take over a greater share of funding for public schools and consolidate some units of local government.

Frank Manzo, policy director at the Illinois Economic Policy Institute, and Robert Bruno, director of the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign, argue in a new report that such a plan would not only hold down future property tax hikes, but it would actually help create jobs and stimulate the state’s economy.

“There have been previous commissions on this issue since the 1980s,” Manzo said in an interview. “Four of them, in fact, and all four unanimously found that really meaningful property tax relief for homeowners would require more state funding for public education. And in three of the four task forces, local government consolidation was also directly or indirectly called for. But these are structural problems that have frankly only deepened since those reports.”

Illinois lawmakers passed Senate Bill 1932 earlier this year establishing a bipartisan Property Tax Relief Task Force. It was part of Democratic Gov. J.B. Pritzker’s so-called “fair tax” package that also included a proposed constitutional amendment allowing the state to levy a multi-tiered “graduated” income tax in which people would pay higher rates on higher levels of income. Voters will decide on that amendment in the November 2020 elections.

Pritzker has said he wants part of the new revenue from a graduated tax — estimated at about $3 billion a year — to go toward local property tax relief by raising the current property tax credit that property owners can take on their income taxes.

But in their report, which they shared with Capitol News Illinois ahead of its public release, Manzo and Bruno argue that the state’s current property tax system and its school funding system are structurally flawed.

Specifically, they point to the fact that property taxes account for two-thirds of school funding in Illinois while the state pays only about 27 percent, or about half the national average.

They also point to the state’s Property Tax Extension Limitation Law, or PTELL, which allows automatic property tax increases each year, but also caps those increases at the rate of inflation or 5 percent, whichever is less, thus preventing many local governments, and especially school districts, from raising the revenue they need.

Their proposal is to raise the state’s contribution to public education by $5 billion over four years. That would be in addition to the increased funding that comes through the state’s new Evidence Based Funding formula, which calls for an added $350 million for education funding each year.

The new money would be distributed proportionately to all 852 school districts, effectively covering their future increases under the PTELL law and enabling them to hold their property taxes flat for four years.

That plan could be paid for, they argue, through the proposed graduated income tax, a new tax on retirement income over $100,000 and savings that could be achieved by consolidating township governments.

Dome damage

A Capitol dome study conducted early last month revealed “some obvious flaws on the exterior of the dome,” a state employee said Tuesday, Dec. 17.

Inspectors also found cracks inside the structure and changes made over the years that have altered the Statehouse’s historical profile. The flagpole atop the Capitol needs to be replaced and the holiday lights will probably need to be hung in a different manner, Harl Ray, senior project manager for the secretary of state’s Department of Physical Services, said at a Capitol Architect board meeting.

Secretary of State Jesse White’s office is tasked with overseeing buildings in the Capitol Complex.

Chicago-based, women-owned firm Bailey Edward performed an inspection from the top of the Statehouse dome to the fourth floor, where access to the inner dome is located right outside the House gallery. That dome, standing about 235 feet tall, is what Illinoisans see from inside the building. The outer dome is the silver-colored, 361-feet tall structure seen from outside the building.

The firm’s final report, expected by mid-January, will include “a detailed and prioritized list of recommended corrections and repairs to guide future preservation efforts of the Illinois State Capitol Dome,” according to its website.

Ray said examiners found open seams in the outer dome’s protective metal skin and other spots where the sheet metal overlaps incorrectly. Those areas are “actually catching rain,” as opposed to allowing the rain to run from one metal shingle to the next, and causing “active leaks.”

Secretary of state crew members are using plastic sheeting to guide water into buckets so it does not seep below the inner dome to occupied areas of the Statehouse.

Inspectors also “discovered a crack on all four compass points” of the bracket structures supporting the stone columns visible outside the Capitol.

Hemp farming

Illinois Department of Agriculture Director John Sullivan said Tuesday, Dec. 17, that interest in the newly-legalized hemp industry continues to build, but more work needs to be done for the industry to mature.

Sullivan spoke to reporters at the state’s first Hemp Summit at the Illinois State Fairgrounds in Springfield where nearly 700 farmers, processors and other people involved in the hemp industry gathered to talk about what they learned during the 2019 growing season — the first season of legal hemp production in Illinois.

“People are excited. There’s a lot of questions,” he said. “This is an industry, I would say, in its infancy stages at the moment. We have a lot to learn and that’s what our speakers are here today to talk about.”

State officials won’t know until next month exactly how many acres of hemp were planted or harvested, but the state certified more than 21,000 acres as being eligible for hemp planting — considerably more than officials expected.

Jeff Cox, who heads the department’s medicinal plant bureau, said the agency registered 644 farmers to grow hemp and licensed 194 processors.

Hemp, a close relative of the marijuana plant, had been illegal in the United States since 1937, although the federal government did encourage its production during World War II. But after decades of debate, Congress reversed course in 2014 with passage of a Farm Bill that authorized hemp production for research purposes. It then lifted the ban entirely with passage of the 2018 Farm Bill.

Under that law, hemp is only legal if it contains no more than 0.3 percent of THC, the psychoactive ingredient in marijuana. If a crop contains any amount of THC above that limit, it is considered marijuana and must be destroyed.

Refugees resettlement

Democratic Gov. J.B. Pritzker said Monday, Dec. 16, he fully supports allowing refugees to resettle in Illinois and he is expected to sign a letter to the Trump administration to that effect in the coming days.

Such a letter of consent is now required from state and local officials under an executive order that President Donald Trump issued earlier this year. Under that order, state and local officials had until Dec. 25 to issue written statements of consent.

“As the great grandson of a Jewish refugee from Ukraine, the president’s attacks on immigrant families are deeply personal to me,” Pritzker said in an email statement. “I will always embrace refugees with open arms, and under my administration Illinois will always be a welcoming state that values the contributions immigrants make in our society.”

Pritzker’s comments came after the humanitarian aid organization World Relief and 77 Illinois pastors who are part of the Evangelical Immigration Table sent letters to Pritzker and 14 other governors urging them to support refugee resettlement, even as the Trump administration sharply curtails the number of refugees allowed into the country.

The executive order states it is the administration’s policy to consult with state and local governments, “to identify the best environments for refugees, but also to be respectful of those communities that may not be able to accommodate refugee resettlement.”

Jenney Yang, vice president of advocacy and policy at World Relief, said during a phone interview that the United States is poised to allow only 18,000 refugee resettlements in the current federal fiscal year, the lowest number in the nation’s history.

Capitol News Illinois is a nonprofit news service operated by the Illinois Press Foundation that provides coverage of state government to newspapers throughout Illinois. The mission of Capitol News Illinois is to provide credible and unbiased coverage of state government to the more than 400 daily and weekly newspapers that are members of the Illinois Press Association.

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