Feb2020LMhi

Message From the Executive Director What CanWe Expect During Gov. Pritzker’s Second Legislation Session

Dr. Brent Clark

Pritzker was referring to an unintended consequence of the state’s Property Tax Extension Limitation Law, or PTELL, that incentivizes units of government to tax to the cap every year for fear of losing that revenue in perpetuity. IASA has argued for years PTELL needs to be reformed, and it was encouraging to hear the governor sound receptive to the idea. However, property tax relief polls well and many lawmakers are clamoring to tell their constituents their tax bill will be lowered. Don’t forget this is an election year for the Illinois House of Representatives, as well as some Senators, and anything can happen. Furthermore, hanging over everything will be how much support there is for a ballot initiative in November to change the state’s Constitution to allow for a graduated income tax. We still believe it’s possible the promise of local property tax relief could be used as a tradeoff for the passage of the graduated income tax. There are also ramifications for school funding. Last month, the Illinois State Board of Education Board approved a budget recommendation of a $100 million increase for early childhood programs and $510 million increase in EBF funding. The latter is up $135 million from this fiscal year. This would be a tremendous step forward. I believe the governor wants to make the investment, but it will boil down to if the state can afford it. Stay tuned. We will learn much more about the governor’s agenda when he gives his budget address on Feb. 19.

Last May, we witnessed one of the most impressive legislative sessions ever in terms of a governor being able to accomplish the goals set forth in his gubernatorial campaign. When the dust settled, Pritzker cleared the board and reminded everyone it is still possible to get things done under the Capitol dome. As we head into a new legislative session—kick started by Pritzker’s State of the State address last week—what can we expect to happen? I predict this session will have a much different feel from last. Lawmakers and lobbyists are now familiar with how the governor and his staff operate. Also, the Senate has a new leadership team that will want to put its stamp on how it does business. I also don’t expect the governor’s agenda to be quite as wide-ranging, although that doesn’t mean it won’t be consequential. Gov. Pritzker signaled ethics reform would be his top priority in his State of the State Address, noting, “We have to work together to confront a scourge that has been plaguing our political system for far too long.” The governor wants to end the practice of legislators serving as paid lobbyists and wants to enact a revolving-door policy so lawmakers can’t retire and immediately start lobbying. That’s always been a tough climb at the statehouse because it would require legislators to vote for something that will hurt them financially. The devil will be in the details, but I expect meaningful ethics reform to pass. Also, Pritzker came out in favor of allowing citizens to consolidate or eliminate units of local government. He did not mention schools but several pieces of legislation have already been filed to force consolidation. The biggest issue for schools this session, however, will be possible changes to our main source of revenue—property taxes. Pritzker’s remarks were interesting, saying “Local governments continue to max out their levies even when they don’t need to.”

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LM February 2020