Spring in Springfield: Analyzing the Big Issues

Marty Green, Esq. Senior VP and Legislative Counsel, Illinois CPA Society
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As society began pivoting to post-vaccination normalcy, the Illinois General Assembly spent the spring legislative session conducting business in a hybrid manner, with committee hearings being held virtually and legislators meeting in person in the House and Senate chambers for floor action. As they wrapped up the spring session on June 1, 2021—one day after the adjournment deadline—they had addressed many major issues and challenges, while others remained untouched. Here’s my analysis of the big issues.

The State Operating Budget

Early in the spring legislative session, Gov. J.B. Pritzker formally presented his proposed $41.6 billion budget to fund state government operations. There was a $1.3 billion gap in the proposed budget, which Pritzker planned to close by eliminating “corporate tax loopholes.” Also hanging over state finances was the remaining $2 billion balance of the Federal Reserve loan the state received to cover state operating expenses and revenue shortfalls during the height of the COVID-19 pandemic. As budgeters began negotiations, they received the good news that Illinois would receive $8.1 billion in federal stimulus money from the American Rescue Plan Act. The Governor’s Office of Management and Budget also announced that state revenues were on pace to bring in $1.5 billion more than originally projected, with an additional $842 million in the coming fiscal year. With this in mind, the governor, president of the Senate, speaker of the House, and state comptroller agreed that the remaining Federal Reserve debt should be repaid to avoid costly interest payments. State leaders initially planned on using money from the federal stimulus program, but U.S. Treasury rules stipulate that these funds should be used to provide relief to residents—not to satisfy debt burdens or to facilitate tax cuts. State leaders remain committed to repaying the outstanding federal debt, and this commitment essentially impounds money and prevents the creation of new ongoing programs with this one-time large cash influx.

Redistricting

The Illinois Constitution requires that Illinois legislative districts be redrawn to reflect population trends by June 30, 2021. Preliminary general information released by the U.S. Census Bureau indicates that Illinois will lose two congressional seats, but the release of the more detailed census data typically used to draw state legislative maps has been delayed. In order to meet the June 30 deadline for the General Assembly to approve redrawn legislative maps, House and Senate majority leaders determined that the five-year American Community Survey data would be used to redraw the maps. After a great deal of speculation, House and Senate Democratic leaders released proposed maps late in the legislative session. At stake for Illinois voters is representation in Springfield and Washington, as well as majority party control of the Illinois House and Senate. Additionally, the five Illinois Supreme Court judicial districts were redrawn for the first time since 1963, putting the balance of the Illinois Supreme Court in play. Despite ongoing efforts by public interest groups to make Illinois’ redistricting process independent, it remains a political and partisan process where the majority party draws the maps. If the General Assembly is unable to approve redrawn maps by June 30, a bipartisan eight-person panel will be convened to create new maps which five of the eight members must approve. If the panel is unable to approve a proposal, the Illinois Supreme Court will submit the names of two people from each political party and the secretary of state will hold a drawing to see which person will act as the tiebreaking ninth member.

Ethics Reform

There has been a push for House ethics reform in the wake of a number of high-profile indictments of Chicago aldermen, former aldermen, sitting legislators, and associates of former Speaker of the House Mike Madigan. Proposals included measures to slow the “revolving doors” of legislators becoming paid lobbyists throughout government; enhanced oversight of legislators through improvements to the Legislative Ethics Commission and the Legislative Inspector General’s Office; greater financial disclosure and greater transparency, including disclosure of statements of economic interest; and expanded authority of the statewide grand jury allowing it to investigate public corruption.

Clean Energy

Illinois lawmakers and energy stakeholders hoped to pass an energy overhaul in the spring legislative session and several clean energy proposals were introduced, including Pritzker’s Climate First Act. The goal of these proposals is to transition Illinois to carbon-free energy, including nuclear power. Other proposals include the Clean Energy Jobs Act, which would create energy investments in wind turbines and solar power and electrify the transportation sector. Overcoming the scrutiny and stigma of the flawed 2016 clean energy law that provided subsidies to nuclear power plants in Illinois is central to successful energy overhaul. The exposure of pay-to-play politics and Commonwealth Edison’s deferred prosecution agreement with federal prosecutors further escalated support for utility accountability and ethics provisions.

Other Issues

Aside from the overriding issues outlined above, I would like to touch upon two other pieces of legislation in the General Assembly. First, both the House and Senate unanimously passed Illinois CPA Society-sponsored legislation (SB 1723) to amend the Illinois Public Accounting Act, changing the 150-hour requirement to sit for the CPA exam in Illinois to 120 credit hours with 150 credit hours still being required for licensure. Second, the General Assembly also passed legislation (HB 1443) to dislodge the stalled issuance of cannabis dispensary licenses. Two lotteries prioritizing Black, Hispanic, and other minority Illinoisans will award 110 new licenses and a separate lottery will award the 75 licenses authorized to be awarded by May 2020.

What Wasn't Done

There were two significant long-term issues left unresolved. The first is that no substantive legislation for meaningful public pension reform was introduced. Illinois public pensions continue to consume ever-greater portions of the state operating budget, and the governor and members of the General Assembly have avoided addressing this monster. Second, in response to the COVID-19 pandemic, state and federal officials assisted unemployed workers with enhanced unemployment insurance benefits. Currently, the Unemployment Insurance Trust Fund has an estimated deficit of $5 billion. The viability of this fund is maintained through employer taxes. Legislative leaders and the governor have allocated $100 million from the $8.1 billion the state received from the American Rescue Plan to this fund, and the business community continues to negotiate with the Pritzker administration on ways to replenish the fund.

Overall, the spring session of the 102^nd General Assembly was very busy with a large volume of far-reaching bills passed by the House and Senate. Here, our legislative goals were to help pass SB 1723, support legislation that positively impacts the accounting profession, support collaborative work with our stakeholder partners to advance good tax policy, and mitigate mandates on businesses and employers. As with any legislative session, we had both victories and losses, and we remain as committed as ever to serving CPAs and the accounting profession as Illinois moves forward.