Legislative Update: September 8, 2015

House Republicans Defend Fair Bargaining Process for State Employees & Taxpayers
On Wednesday, House Republicans blocked an attempt by the Democrat majority to override Governor Rauner’s veto of SB 1229. The bill would have changed the way that the State of Illinois negotiates with labor unions in cases of alleged negotiation impasses. The measure would have instituted “interest arbitration” as the preferred method, for four years, for the State of Illinois to negotiate with most of its organized workers.

The bill was seen as a pathway for the State’s largest union, AFSCME, to bypass the collective bargaining process and use interest arbitration to impose a labor-management contract on the State. AFSCME’s contract offer, which could have been adopted in its entirety under interest arbitration, could have resulted in an increase of $1.6 billion in salary costs and an additional $700 million in health care costs over the next four years. I spoke on the House floor about the cost of the proposed contract and how it would impact union jobs since Illinois does not have the money to fund the contract. You can listen to my floor remarks here.

SB 1229 is bad public policy aimed directly at Governor Rauner. The Governor has committed in writing that the tolling agreement extending the current contract will remain in place until both sides agree they are walking away from the negotiating table. The Governor will not lock out employees and is committed to remaining at the table until a final deal is reached. He cannot and will not force unions to strike.

The Democrats’ proposal would take away negotiating authority from the duly elected Governor and put state labor contracts in the hands of an arbitrator, not elected or accountable to taxpayers, who would not be allowed to compromise or come up with a reasonable solution. Whereas normally arbitrators are given discretion to forge a compromise, that would no longer be the case (at least not for the current administration). Arbitrators would be forced to choose between labor’s request or the State’s proposal with absolutely no discretion… all or nothing.

After a total veto by Governor Rauner, SB 1229 was returned to the General Assembly for a possible override as provided for in the state Constitution. A three-fifths vote in both houses of the legislature is required to override the Governor’s veto. While the Senate voted to override the Governor’s veto, the Illinois House voted on Wednesday, September 2 to sustain Governor Rauner’s veto, thereby defeating the bill (71 votes had been required). The House vote was 68-34-9.

Teamsters Sign On to Four-Year Labor Agreement with State of Illinois
Governor Bruce Rauner announced the agreement on Monday, August 31. The contract included key concessions by both sides. 4,600 State employees are covered by the new agreement, which must be ratified by a rank-and-file vote by organized Teamsters.

Key features of the new contract include a four-year wage freeze, maintenance of existing health care benefits, and a reduction in the number of unused vacation days that future new State hires in Teamster-organized work spaces will be allowed to carry over. The new State contract with the Teamsters union does not officially affect the status of State employees who are members of other labor unions, including members of AFSCME.

Moody’s Warns of Consequences if Budget Stalemate not Resolved
The global bond rating service, which has imposed several cuts on the debt status of Illinois, warned the State of potential further downgrades in a report published on Monday, August 31. The report called attention to the current budget impasse of the State of Illinois, which is attempting to operate without a legally enacted spending plan for fiscal year 2016. FY16 began on July 1, 2015.

Changes in the debt rating of Illinois as a whole, and of subsidiaries (such as the University of Illinois) affect interest rates that must be paid by Illinois taxpayers. Rating agencies such as Moody’s, Standard & Poor’s, and Fitch Ratings have given Illinois the lowest debt rating of any U.S. state.

House Moves Forward on Heroin Crisis; Bill Passed over Governor’s Veto
HB 1, which was drafted with the active participation of law enforcement, contains numerous changes to State and local programs aimed at heroin and other opiate drugs. The bill strengthens the Prescription Drug Monitoring Program. It creates a program to move towards universal availability of heroin-overdose-reversal medications (opioid antagonists) in the hands of first responders and in the formularies of health insurance policies. The bill will enhance criminal penalties for “prescription shopping,” expands Medicaid to cover opioid dependence medications and opioid antagonists, and makes other changes.

The bill was drafted by the House Bipartisan Heroin Crisis Task Force, a special House committee that held many hearings on opiate drugs and opiate addiction issues. The Task Force heard emotional testimony from the families of loved ones who had overdosed on opiate drugs. After the bill was sent to the Governor’s desk for final action, Gov. Rauner wrote an amendatory veto to remove sections of the bill that had implications for the State’s budget and taxpayers. The amendatory veto would have reduced costs to the Medicaid program by removing medication-assistant treatment for alcohol or opioid dependence, and cutting out opioid antagonists.

Some budget experts saw the Governor’s amendatory veto as a reasonable response to the State’s budget crisis. However, Speaker Madigan made it clear that the amendatory veto motion would not be called and that the House would have to cast an up-or-down vote on the original bill as passed by both houses of the General Assembly. The House voted 105-5-0 to override the Governor’s veto on Wednesday, September 2. The measure now moves to the Illinois Senate for another override vote and possible final action.

The bill to create this program, HB 3219, became law through Governor Rauner’s signature on Thursday, August 27. Lead co-sponsors included House Republican Reps. Michael McAuliffe and Christine Winger.

Website Thumbtack.com Gives Illinois’ Business Climate a Grade of “F” for 2015
The failing grade was the result of Thumbtack’s Small Business Friendliness Survey of nearly 18,000 small business owners nationwide. Survey results paralleled concerns raised by House Republicans about Illinois’ job-creation atmosphere and business climate. Thumbtack respondents also gave failing grades to California, Connecticut, and Rhode Island.

Thumbtack’s survey asked respondents to comment on ten separate criteria, which were aggregated to generate a final total. The variables included ease of starting a business, ease of hiring, regulations, health and safety, employment/labor and hiring, tax code, licensing mandates, environmental regulations, zoning, and training-and-networking programs.

Surveyed small businesspeople gave above-average grades to three of Illinois’ neighboring states: Indiana, Missouri and Wisconsin.