Senate Week in Review: June 14-18
SPRINGFIELD — Illinois’ credit rating took another hit this week and several bills were signed into law, including measures that will overhaul the state’s archaic telecommunications act and put Illinois residents to work.
State Sen. Dale Risinger (R-Peoria) said Senate Bill 107 (P.A. 96-0927) will modernize Illinois’ existing telecommunications law, which had been implemented before the prevalent use of cell phones. The law will continue to safeguard consumers by extending affordable package options to those who still use landline services, while also lifting unnecessary regulations to promote companies’ investment in wireless and broadband technology.
The measure also encourages market competition by allowing telephone companies to alter price and phone package details without approval from the Illinois Commerce Commission, which often took weeks.
Another measure, House Bill 6349 (P.A. 96-0929), puts Illinoisans to work when they need it most. The bill requires that at least 90 percent of workers hired for construction and hazardous waste clean-up on public works projects must be workers from Illinois, if the state unemployment rate is over 5 percent for two consecutive calendar months.
The measure seeks to create job opportunities for Illinoisans during tough economic times and instances of significant unemployment.
In other news, Risinger said Illinois’ credit rating was downgraded once again, based primarily on the state’s continuing budget deficit. Fitch Ratings recently downgraded Illinois, which now has the second-lowest rating in the nation after California. The downgrade comes on the heels of a Moody’s Investors Service downgrade, which tied Illinois with California for the worst-rated state in the nation.
The two downgrades bring the total number of downgrades under Gov. Pat Quinn to eight — almost triple the three downgrades Illinois received under former Gov. Rod Blagojevich. Illinois has only been downgraded 17 times in its history, and almost half of those occurred during Quinn’s one-and-a-half years in office.
Credit downgrades serve as independent “report cards” of the state’s finances. The lower the state’s credit rating, the more it costs when the state tries to borrow money. It’s likely that these downgrades will lead to hundreds of millions of dollars in higher interest costs in the future.
Senate Republicans noted that the common theme in the downgrades reflects a lack of political will to take action on the state’s budget problems. Fitch noted that the Fiscal Year 2011 budget failed to address the state’s massive operating deficit and “relied almost exclusively on borrowing to close its sizeable budget gaps.”
The Fitch analysis also refutes the argument that the national recession is the primary cause of Illinois’ current budget deficit. Instead it points to the state’s failure to build a nest egg when the economy was robust: “Illinois entered this economic cycle with little financial flexibility to handle a downturn. It came out of the last recession relatively late and did not take actions to build its reserves or restructure its finances as its economy and the national economy grew over the five years leading into this recession.”
Despite downgrades by Fitch Ratings and Moody’s, Standard and Poor’s has retained Illinois’ rating — also second worst in the nation — but said that the rating could be lowered if structural changes to the budget are not made soon.
Legislation signed into law this week includes:
Dental services (HB 5859/P.A. 96-0926): Authorizes the Department of Healthcare and Family Services to develop a system allowing the state to reimburse dental clinics for volunteer care, so that a volunteering dentist does not have to personally enroll as a participating provider in the medical assistance program.
Prohibition exemptions (SB 3288/P.A. 96-0928): Exempts certain liability, indemnification claims and final judgment settlements from the prohibition against expenditures in a fiscal year of moneys appropriated the previous fiscal year.
Seth’s Law (HB 5764/P.A. 96-0925): Requires hospitals to have policies and procedures for readily gaining access to a locked bathroom in a patient's room.
Veterans’ courts (HB 5214/P.A. 96-0924): Allows for the creation of specialized veterans’ and service members’ courts with the necessary flexibility to meet the specialized problems faced by veteran and service member defendants.
