Budget outlooks from both the Governor’s Office and the Legislature’s own bipartisan financial forecasting agency were on tap Feb. 15, when the Illinois Senate’s two budget writing committees held a joint hearing in Chicago.
The hearings capped a short but busy week in the state Senate, which also saw Senate approval of a same-sex marriage proposal, the adoption of rules to encourage citizens to submit ideas for new laws, a date change for the Governor’s annual budget message, and a major increase in licensing fees for the state’s doctors.
A rules change approved in the Senate, Senate Resolution 54, will allow citizens who collect 10 or more signatures for a legislative proposal to have their ideas submitted to the Senate. The proposals for new laws would be reviewed by a special Senate committee for possible consideration as legislation.
Receiving the most attention was the same-sex marriage proposal. Senate Bill 10 was approved after extensive debate both in committee and on the Senate floor. Proponents argued that giving same sex-couples the right to marriage was a civil rights issue. Opponents, including myself, focused primarily on concerns that the Illinois law could have unintended consequences for churches and religious institutions that view same sex marriage as contrary to their tenets.
In debate on the Senate floor, opponents raised concerns that the broad language of the measure could subject churches which oppose same sex marriage to costly lawsuits simply for adhering to their beliefs.
Others questioned the priorities of the Senate President, who expedited consideration of the same-sex marriage proposal while pension and workers’ compensation reforms, which are critical to our state’s economy, languish.
The state economy was the central focus when the two Senate Appropriation Committees met Feb. 15 to hear economic assessments from the Governor’s budget office, the Legislature’s own financial forecasting agency and the state’s Revenue Department.
An extensive analysis from Moody’s Analytics was grim, declaring Illinois “is one of just a handful nationally in danger of falling back into recession” and adding “Illinois has been among the Midwest’s weakest and is underperforming the nation in most economic gauges.”
Earlier in the month, the Legislature’s Commission on Government Forecasting and Accountability presented a similar assessment to the House revealing that the economic recovery from the 2007-2009 recession has seen the weakest growth since the World War II era.
In almost every economic indicator, the reports show Illinois lags behind the rest of the nation and faces significant hurdles to job growth. Moody’s Analytics warned that as the rest of the nation recovers, Illinois will “trail the region and nation by an even larger margin in 2013.”
However, there were bright spots in the analysis, notably in the manufacturing and in tech- and science-based industries.
In manufacturing, Illinois is recovering jobs more rapidly than the rest of the country and the state’s percentage of manufacturing jobs is actually slightly higher than the nation’s. Slightly more than 10% of the state’s workforce is in manufacturing and outside Chicago, manufacturing accounts for 13.1% of the state’s jobs. Yet, even in that sector, Moody’s cautioned that most of the 305,000 manufacturing jobs lost since 1997 will not return.
Other key findings:
- Income in Illinois fell more sharply during the recession and has risen by less than the rest of our country during the recovery;
- The national unemployment rate in January 2013 was 7.8%. Illinois’ rate was 8.7%;
- One of Illinois’ greatest strengths is its skilled and educated workforce. About 31% of Illinois residents have college degrees and 12% have post-graduate degrees. Both figures are above the national average;
- The 2011 tax hike sent Illinois into the bottom half of the nation in terms of tax climate with the major increase in business taxes being “the single biggest reason for the recent slippage in the state’s tax climate.” Illinois now has the fourth highest corporate tax rate in the nation;
- Illinois is suffering from weak population growth and in 2012, a net 44,000 residents left the state. Even in the Midwest, Illinois is trailing its neighbors meaning “the state is losing out to its closest competitors to attracting and maintaining residents;”
- The state’s largest number of out-migrants aren’t moving to a sunbelt state, but rather to Indiana;
- Despite strong competition from South America and Asia, the outlook for Illinois agriculture is good, in part led by increasing demand for ethanol;
- Lake County and Rockford account for more than 90% of the state’s foreclosed properties. The state’s foreclosure rate is twice the Midwest average and second highest after Florida;
- Illinois’ extensive transportation network is a key factor for economic growth. Illinois is the nation’s top rail hub with more than 7,300 miles of track and 42 different railroads.
In other legislative action, a bill increasing licensing fees for doctors (SB 622) was also sent to the House for consideration. The state’s Medical Disciplinary Fund does not have enough money to cover the cost of licensing doctors in Illinois. The bill increases physician licensing fees and loans the Medical Disciplinary Fund $6.6 million to be repaid from the higher fees.
Though I had significant reservations, I voted “yes” on Senate Bill 622.