SPRINGFIELD, IL – While the spring legislative session adjourned on May 31, Senate Republicans remain focused and prepared to pass a full-year balanced budget with structural reforms before the end of the fiscal year on June 30. The General Assembly is expected to return to the Capitol in late June to resume budget negotiations and legislative action.
Republicans’ calls for reforms that would encourage economic growth and the creation of more good-paying jobs in Illinois were supported this week by a report that underscores how stagnant personal income continues to be a critical concern for Illinois residents—and a contributing factor in thousands of Illinoisans fleeing the state each year. According to The Pew Charitable Trusts, between 2007 and 2016, Illinois’ personal income growth crawled at a pace of only 0.8 percent per year, ranking it amongst the worst states for personal income growth.
In other news, many government services have been hit hard by the budget impasse, waiting months for state reimbursement. This week, a federal judge weighed in on a lawsuit brought by frustrated Medicaid service providers, who complain of waiting up to six months to receive reimbursements from the cash-strapped state. Some service providers and doctors have threatened that if action is not taken to expedite reimbursement, they may discontinue service to Medicaid recipients. The issue was placed in the hands of a U.S. District Court Judge to decide if reimbursement for Medicaid—the state’s most expensive government program—should be prioritized ahead of other government services.
Senate Republicans keep focus on balanced budget for upcoming fiscal year
For the third consecutive year, the General Assembly has adjourned on May 31 without passing a comprehensive and balanced budget for the state of Illinois, despite Republican lawmakers repeated requests that their Democrat counterparts remain at the negotiating table to come to a budget compromise.
The General Assembly is expected to return to the Capitol in June with the goal to pass a budget prior to fiscal year-end on June 30. Prior to adjournment, Illinois Senate Democrats approved a $5.4 billion income tax hike and more than $37 billion in state government spending. In order for State Representatives to push that—or any—budget legislation through the House to the Governor’s desk, they will need a three-fifths majority vote—which will require members from both parties to get on board.
Senate Republicans did not support the budget plan, citing the lack of accompanying structural reforms, such as significant property tax relief, to offset the Democrats’ $5.4 billion tax increase on Illinois residents and employers.
While there have been talks of stopgap funding in lieu of a full-year budget, Governor Rauner has publicly expressed his desire to negotiate a full-year balanced budget proposal. Senate Republican lawmakers remain optimistic that the General Assembly can meet the June 30 fiscal year deadline.
Illinois ranks amongst worst states for personal income growth
Between 2007 and 2016, Illinois’ personal income growth crawled at a pace of only 0.8 percent per year, tying with Nevada for the lowest income growth in the country. Senate Republicans pointed to the sluggish growth as a prime example of why the state needs structural reforms to entice job creators to expand or settle in Illinois. Republican legislators continue to fight for these reforms that will expand the Illinois’ fiscal assets and bring economic stability and security back to the state.
While Illinois trails behind the likes of even low-growth states such as Connecticut and Mississippi, the average U.S. state has doubled Illinois’ income growth rate. In fact, its neighboring state of Indiana has grown at more than two times the pace of the Land of Lincoln. Hundreds of thousands of Illinois income-earners continue to leave to seek out more competitive states for opportunities.
Despite Illinois’ struggle to draw new residents and businesses to the state, and entice their current population to stay, the General Assembly recently proposed significant income tax hikes that may further stifle income tax growth and secure its spot as the worst in the nation. Republican lawmakers and the Governor have consistently stressed that if the state is going to advance an income tax increase, then reforms—such as significant property tax relief—are necessary to provide Illinois residents with meaningful relief in other areas.
Federal judge decides ruling on Illinois Medicaid payments
As the budget impasse continues and Illinois’ backlog grows to over $14 billion in unpaid bills, many Medicaid service providers have threatened to discontinue services to Illinois Medicaid recipients unless the state starts postmarking reimbursement checks faster. The issue was placed in the hands of U.S. District Court Judge Joan Lefkow to decide if reimbursement for Medicaid—the state’s most expensive government program—should be prioritized ahead of other government services.
Senate Republican lawmakers have been pushing for a full-year balanced budget to allow for the state to meet all of its obligations in a timely manner, including payments to Medicaid providers. Though progress was made in late May on a budget and reform package that would provide spending authority and necessary funding to pay down the state’s bills, Democrats ultimately walked away from the negotiating table. The General Assembly adjourned on May 31 having failed to pass a balanced fiscal plan for Illinois, despite Republicans calls for compromise on a spending plan and repeated offers to resume good-faith negotiations.
Under Lefkow’s previous court orders, Illinois was required to continue its Medicaid reimbursements, despite the budget stalemate, but has failed to keep up with the payments. Some health providers have expressed they cannot afford to wait up to six months for state reimbursement for the care of low-income Medicaid patients.
Lefkow announced her decision on June 7, and while the judge didn’t order the state to give precedence to Medicaid debts, she expressed agreement with attorneys of Medicaid patients and managed care organizations that Illinois has been deferring Medicaid payments in defiance of federal consent decrees. She also emphasized reimbursements to Medicaid service providers shouldn’t take the backseat while the state prioritizes other obligations.
Lefkow emphasized that Illinois should achieve “substantial compliance” with the previous consent decrees, and gave both sides a deadline of June 20 to reach a payment agreement. If they don’t come to an accord by the judge’s June 20 deadline, the parties can return to court for additional proceedings.