Alliance Legislative Report 97-18

Distributed via Email: May 26, 2011

HOUSE PANEL APPROVES PENSION REFORM BILL

The House Personnel and Pensions Committee approved a bill this morning (Thursday) that would affect current participants of the state’s pension systems, including the Teachers’ Retirement System (TRS). SB 512, with an amendment sponsored by Representative Tom Cross (R-Oswego) and presented in committee by Cross and House Speaker MichaelMadigan (D-Chicago), was sent to the House floor. Bill components include:

• Requires employees who became a TRS participant before January 1, 2011 to select, by July 1, 2012, which retirement program they wish to participate in:

• the “traditional” plan which offers the TRS retirement benefits that were in place before January 1, 2011
• the “revised” plan which offers the “Tier II” TRS retirement benefits that are available to participants that entered the system on January 1, 2011 or after
• the “self-managed” defined contribution plan (similar to a “401(k)” plan)

• Pension benefits for participants who retire after July 1, 2012, will receive the sum of the benefits accrued from their starting date in TRS to July 1, 2012, plus the benefits accrued from July 1, 2012 to their retirement date

• For those participants who choose to remain in the “traditional” retirement program, the employee contribution rate for Fiscal Years 2013, 2014, and 2015 will be 13.77% of the employee’s annual salary (it is currently 9.4%). Beginning in Fiscal Year 2016 and thereafter, the employee contribution rate will be the actuarially determined “normal cost” of the TRS system

• For those participants who choose the “revised” retirement plan, the employee contribution rate will be 6% of annual salary (generally, the “normal cost” of the TRS system)

• For those participants who choose the “self-managed” retirement plan, the employee contribution will be 6% of annual salary

• Allows participants who first became TRS participants on January 2011 or after to choose between the “revised plan” and the “self-managed” plan

• Similar pension changes were made to the other state retirement systems

• A summary of the “Tier II” retirement plan can be found at https://www.iasb.com/govrel/newschoollaws2012.pdf, scroll down to page 17, under SB 1946

BORROWING BILL WOULD HELP WITH SCHOOL PAYMENTS

State Senator John Sullivan (D-Rushville) proposed a bill package Wednesday that would allow the state to borrow funds to immediately pay off the state’s backlog of unpaid bills. One of the bills would allow the state to immediately make payments to school districts to cover the current debt of $983 million the state owes its schools. The legislative package was approved by the Senate Executive Committee Wednesday evening and a Senate floor vote is pending.

The total borrowing plan would be $6.18 billion; a total based on the actual amount of bills currently owed by the state to private businesses and third-party vendors, health care providers, corporate tax refunds, and local units of governments, including school districts. These entities have already provided the services to the state, yet the state has not made its payments in return.

• SB 342 would borrow $1.48 billion to pay non-governmental entities
• SB 343 would borrow $1.13 billion to pay group health insurance/health providers
• SB 344 would borrow $800 million to pay corporate tax refunds
• SB 345 would borrow $2.76 billion to pay school districts, universities, community colleges and other units of local government

The bulk of the payments owed to public school districts are for reimbursement for the mandated categorical grants; generally special education services and transportation costs. Some of the smaller state grants are also included in the backlog.

FIVE DAYS TO COMPLETE BUSINESS

The General Assembly is nearing crunch time to complete legislative business for the spring. With the May 31 scheduled adjournment date looming, significant issues are still unfinished. However, movement has taken place this week on most all of the big ticket items. The legislature will most likely spend some time in the Capitol this weekend with final votes coming on Monday and Tuesday. Movement on the following issues are an indication that the legislative session is nearing an end:

• Negotiators from both legislative chambers worked together this week on the Fiscal Year 2012 state budget and, reportedly, both the House and Senate are now working off of the same set of budget numbers to create the new budget
• As highlighted earlier, legislators are deliberating on a pension reform bill
• Reportedly, progress has been made on reaching an agreement on workers’ compensation reform
• Proposals for the new legislative district boundaries have surfaced
• Hundreds of bills have been considered on the House and Senate floors for final passage

BILL ACTION THIS WEEK

HB 78 (Jakobsson, D-Urbana) provides that if a school board designates the area within 1,000 feet of a school to be a safe school zone, then the principal of that school and the local law enforcement agency may prohibit people from entering the safe school zone without a legitimate purpose. The bill was approved by the Senate and will be sent back to the House for concurrence in the Senate amendment.

HB 147 (Dugan, D-Bradley) allows a school district to require a school bus driver to undergo testing to check for alcohol or drugs if the district has reasonable suspicion to believe that a school bus driver permit holder is under the influence of such. The bill was approved by the Senate and will be sent back to the House for concurrence in the Senate amendment.

HB 190 (Eddy, R-Hutsonville) p rovides that of the 70 charter schools that are permitted to operate at any one time in Chicago, not more than 5 charter schools devoted exclusively to students from low-performing or overcrowded schools are allowed. The bill was approved by the Senate and will be sent back to the House for concurrence in the Senate amendment.

HB 1095 (Dugan) prohibits the use of rebuilt flame safeguard controls on forced air heating equipment for any non-residential structure. The bill was approved by the Senate Public Health Committee and was sent to the Senate floor.

HB 1197 (Davis, M., D-Chicago) was amended with provisions regarding collective bargaining and strike provisions for the Chicago Public Schools as a follow-up to the education reform bill (SB 7). The bill was approved by the Senate Education Committee and was sent to the Senate floor.

HB 3440 (Chapa La Via, D-Aurora) defines “service animal” in the School Code and changes provisions that require school districts to allow service dogs in schools to a provision that requires school districts to make reasonable accommodations for students. The bill was approved by the Senate and was sent back to the House of Representatives for concurrence in the Senate amendment.

SB 744 (Link, D-Vernon Hills) had an amendment offered by Representative Lou Lang (D-Skokie) to expand gaming throughout the state. It would have established a casino in Chicago, added new riverboat casinos, and allowed for slot machines at horserace tracks. The amendment was defeated in the House Executive Committee.

SB 1578 (Holmes, D-Aurora) provides that of the four yearly teacher institute days, two days may be used as a teacher's and educational support personnel (ESP) workshop under certain circumstances. The bill was approved by the House of Representatives and will be sent back to the Senate for concurrence in the House amendment.

SB 1794 (Lightford, D-Maywood) contains a proposal by the Illinois State Board of Education (ISBE) making legislative changes to align the statute with current practice in the aftermath of the “Cory H” court decision. It eliminates the certification of special education teachers by categorical designation and replaces it with the structure for certifying special education teachers currently in effect and outlined in the ISBE policies commonly referred to as the transition rules. The bill was approved by the House of Representatives and was sent to the Senate for concurrence in the House amendment.

SB 1831 (Raoul, D-Chicago) , as amended, r equires employers participating in the Illinois Municipal Retirement Fund (IMRF) to post the total compensation package of employees making more than $75,000 per year. It provides that if a new hire is receiving a retirement annuity or pension and accepts a contractual position to provide services to a governmental entity from which he or she has retired, then that person's annuity or pension will be suspended during that contractual service (no “double-dipping”). It makes similar changes to the IMRF system to that of TRS regarding the computation of final rate of earnings and a 6% cap on salary increases. The bill was amended and approved by the House Executive Committee and was sent to the House floor.

SB 1865 (Sandoval, D-Chicago) was amended with language that originally was part of HB 542 regarding group insurance pools. It provides that n o joint insurance pool or cooperative shall require a member to provide notice to withdraw more than 30 days before withdrawal; requires the pool to allow a member without penalty to rejoin the pool if their withdrawal was for the sole purpose of seeking competitive pricing and is within 60 days of the withdrawal; requires that the head of any pool be a licensed insurance producer; and disallows any joint insurance pool or cooperative from entering into any contract for insurance coverage that exceeds one year. The bill was approved by the House Executive Committee with the pledge by the House sponsor, Representative Lisa Hernandez (D-Cicero), that the bill would not move forward unless there is agreement by all interested parties.

This legislative report is written and edited by the lobbyists of the Illinois Association of School Boards to provide information to the members of the organizations that comprise the Illinois Statewide School Management Alliance.

Bill Text/Status: Illinois General Assembly www.ilga.gov

Alliance Legislative Reports are Cosponsored by IASB and:
[ IPA ] [ IASA ] [ IASBO ]