Illinois Issues: Coming Up In The Veto Session
*Editor's Note: This piece was published prior to Gov. Bruce Rauner's announcement he signed House Bill 40, the abortion bill.
Commentary: A capital bill; spending cuts; a veto of the abortion bill? A look at some pending questions for the fall legislative session.
When Illinois lawmakers return for their fall session next month, they, and by extension, taxpayers, will face tantalizing questions.
Should legislators and Gov. Bruce Rauner craft a massive public works program to begin tackling a backlog of needed improvements to state roads, bridges and other capital projects?
If the answer is “yes,” how will the improvements be financed, or in simpler terms, what taxes and fees will need to be raised/imposed to pay for everything, or at least to underwrite the yearly costs of repaying billions of borrowed dollars?
Might the perennial idea of gambling expansion be part of the mix, perhaps some new combination of a huge, land-based Chicago casino, new riverboat casinos in suburban Chicago and downstate communities like Danville and Rockford, and slot machines at racetracks? Recall that the now-flourishing video gaming industry was legalized in 2009 in part to help pay for the state’s last major capital program, Gov. Pat Quinn’s six-year, $31 billion, Illinois Jobs Now! initiative.
Will Rauner provide the details of the $300 million in spending cuts he says are needed to pay for the borrowing the state will do to begin paying down the state’s general funds bill backlog, $15.5 billion heading into the final week of September? Despite Democratic prodding, his agency heads couldn’t come up with a single cut during budget hearings last spring; more recently, the governor said he now has some reductions in mind, but won’t tell the public what they might be.
Meanwhile, a handful of bills await action by the governor after clearing the legislature over the summer. Most notable is House Bill 40, a measure intended to protect abortion rights for women in Illinois. Its terms include removing a so-called trigger provision in state law that would outlaw abortion except to save the life of the mother, should the U.S. Supreme Court reverse Roe v. Wade, the 1973 decision legalizing the procedure. More controversial are its provisions that would cover abortion services under Medicaid and under state employee health insurance.
Narrowly approved last spring, the bill finally went to the governor earlier this week after Sen. Don Harmon, an Oak Park Democrat, and a sponsor, removed the procedural hold he had placed on the bill in May.
Although Rauner campaigned in 2014 as a supporter of abortion rights, he said in April that he would veto the bill because of its expanded coverage provisions after meeting with anti-abortion legislators and groups. More recently, the governor had said he's undecided.
Now that HB 40 is on Rauner’s desk, will he veto it, reneging on his campaign pledge? Will he sign it, infuriating pro-life voters? Will he rewrite the bill, deleting expanded coverage, leaving just the trigger repeal?
Then, of course, lawmakers will have the chance to consider more than three dozen bills the governor vetoed outright or returned to the legislature with recommended changes using his amendatory veto.
One high-profile veto was Rauner’s rejection of Senate Bill 81, a measure to increase the state’s minimum wage gradually from its current $8.25 an hour to $15 by 2022. In his veto message last month, the governor said the proposed hike actually would hurt low-income workers by cutting the number of entry-wage jobs employers would make available. His rationale echoed arguments made by business groups opposed to the increase, while supporters counter that higher wages would lead to more consumer spending, driving up demand and creating more jobs.
While reasonable people and economic experts can disagree on the minimum wage issue, an override is not likely, as the measure won only 61 House and 30 Senate votes, far shy of the three-fifths majorities — 71 and 36 — needed for an override.
In several other areas, however, lawmakers ought to override the governor’s vetoes of common sense, consumer-friendly legislation. Here’s a look at three such measures, which besides their obvious merits have one thing in common — each originated with a Democratic statewide office-holder:
SB 1351, drafted by state Attorney General Lisa Madigan’s office, would create a Student Loan Bill of Rights intended to rein in abuses by companies servicing student loans. The measure would require student loan servicers to be licensed by the state. In addition, they would have to process payments properly, to explain to struggling borrowers all their repayment options, and to inform borrowers they might be eligible for loan forgiveness due to a disability or to problems with the school they attended. The legislation also would establish a student loan ombudsman in the attorney general’s office to deal with borrowers’ complaints.
Madigan said the legislation addressed abuses uncovered in her investigation into the industry, such as forcing student borrowers into expensive repayment plans they couldn’t afford while not telling them about federal income-based repayment plans. As a result, the attorney general sued one of the nation’s largest student loan servicing companies, Navient, in January.
In his veto message, the governor said supporting struggling student loan borrowers was laudable, but was a job for the federal government, rather than individual states. He pledged to work with federal education officials and the Illinois congressional delegation on the issue. Moreover, Rauner said licensing servicers and creating an ombudsman might make matters worse by adding another level of state bureaucracy.
Reacting, Madigan said the veto “shows he doesn’t care about the financial reality that student loan borrowers face and has instead sided with large corporations that put their profits before the customers.”
One might agree that in the best of all possible worlds, sweeping federal legislation to protect student borrowers from predatory practices would be preferable. In the meantime, though, Madigan’s Bill of Rights deserves enactment.
HB 302, championed by state Treasurer Michael Frerichs, would order life insurance companies to check their searchable electronic records from 2000 to present against the Death Master File maintained by the Social Security Administration to determine whether policy holders are still alive. If not, the companies would be required to try to track down the beneficiaries. The measure also would codify the treasurer’s practice of paying contingency fees to private auditors to review the financial records of out-of-state companies.
Using an amendatory veto, Rauner rewrote the measure to require records searches only for the five previous years, the period for which insurance companies must keep policy records under current state regulations. The governor also moved to bar outright the use of private auditing firms, whose contingency fees he said came at the expense of taxpayers.
“Governor Rauner chose special interests over real people,” responded Frerichs. “Common sense says that when a loved one dies, the family should be paid” the death benefits.
The treasurer added that audits from his office found more than $550 million in death benefits that were not paid, part of a reported national total of more than $7.4 billion owed to beneficiaries who often were not aware that the deceased individual had life insurance.
Resisting the audits, some insurance companies have argued that a beneficiary has to take the first step and file a claim, otherwise the benefits are added to their bottom line. In a pending legal action, three Kemper insurance companies sued Frerichs, contending his office had no authority to pursue audits. Under state law, though, the treasurer is responsible for returning unclaimed property to rightful owners, which Frerichs says includes unclaimed death benefits.
Here, too, ideally all insurance companies would feel obligated to track down, with outside assistance if needed, people and institutions (churches, for example) that are entitled to death benefits when someone dies. The burden should not be placed on grieving families who may not even be aware of the policy, so as to increase corporate profits. Frerichs’ experience has proven that some companies won’t be that conscientious without outside oversight, so lawmakers should heed the treasurer’s call for an override of the amendatory veto.
HB 3649 was sought by state Comptroller Susana Mendoza. Dubbed the Debt Transparency Act, the measure would require all state agencies to report to her office monthly the bills they are holding and the estimated amount of late payment interest penalties incurred. Now, agencies have to report only once a year, on October 1, and even then only through the prior June 30, making the information three months out of date.
Rauner conceded in his veto message that the inclination to provide more transparency about the state’s financial condition was good. “Unfortunately, this legislation more closely resembles an attempt by the Comptroller to micromanage executive agencies,” he said. Moreover, the “dramatically increased reporting requirement will be both time-consuming and will yield decreasing marginal information,” Rauner said.
But Mendoza contended more timely reporting was especially needed with the state facing a bill backlog that has more than tripled during Rauner’s tenure, as well as late-payment fees of some $2 million a day, so far totaling more than $800 million. Agencies already have the personnel and infrastructure in place to compile the data, she noted.
“Don’t Illinois taxpayers deserve to know how much debt the state has run up in their names?” she asked. “Rather than accuse responsible elected officials of trying to ‘micromanage’ state agencies, the governor should start managing his agencies’ budgets and honestly disclosing their debts.”
During the 2014 campaign, Rauner liked to tout his business acumen, which helped him amass a net worth of not quite a billion dollars. So one might wonder, would shrewd investor Bruce Rauner be satisfied if the financial officers of one of his companies learned only once a year what its total outstanding liabilities were, and then three months after the fact?
Didn’t think so ... overriding this veto ought to be a no-brainer for lawmakers looking to do taxpayers a real service.
Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois Springfield.
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