Friday, January 07, 2011

Controversial budget reforms head to the governor

By Jamey Dunn

A bill headed to Gov. Pat Quinn would limit his power to bargain with unions on public employee contracts.

The House passed House Bill 5424, today, which would change how state government approaches budgeting. Under the measure, the state would be required to pay its debt obligations and annual required pension payments before allocating general revenue funds to any other area of the budget. Spending also could not exceed projected revenues for the year. The estimate would be based on revenue sources approved by legislators when the budget is presented.

Under the plan, a number of grants administered by state agencies would be suspended as of July 1, 2012, unless the General Assembly enacts legislation to keep them in place. After 2012, legislators would have to approve grants every five years to keep them from expiring.

The bill also would require the governor to name an advisory board to help him create an annual list of budget priorities.

“We are looking here at major budget reform — a way to control our spending, a way to get our pension payments made and our debt obligations before we divide up the budget,” said Rep. Carol Sente, the House sponsor of the bill.

Social service providers are concerned about the potential for grants being canceled not because recipients were not worthy but because the legislature might not get around to assessing programs before the grants would automatically expire. They raised the issue that lenders may not want to float providers loans — something that has become a necessity in the face of the states overdue payments — if grants are set to expire. They say lawmakers should evaluate programs when they decide whether to delegate funds.

“There is a review process already in place, and it is the appropriations process,” said Nancy Nyman, vice president of Illinois Action for Children

Perhaps the most controversial section of the bill would prevent any executive officer from entering into a labor contract that would extend past his or her elected term.

Union opponents said contract negotiations can take as long as two years, which could mean that they could potentially start talks with one governor and then reach an agreement with another.

The bill comes on the heels of a controversial deal that Quinn made with Council 31 of the American Federation of State, County and Municipal Employees (AFSCME) near the end of his first term while he was campaigning for election. Sente said the legislation is a direct reaction to that deal, although Senate sponsor Sen. Dan Kotowski, a Park Ridge Democrat, said it is not. He characterized the provision as a sensible budgeting decision that would prevent a governor from locking a future administration into a pricey union contract.

Union representatives also argued that the state enters into several types of long-term contracts, and it is unfair to target labor. They added that a new administration would likely be overwhelmed by the logistics of negotiating contracts as soon as it enters office.

Kotowski said that in light of the budget crisis, the state is also reevaluating many contracts with vendors.

“[The] budget address [is] due in eight weeks, and then on top of all the things that have to be done — new directors, new administration, all the things that need to be done — the new chief executive is going to be worrying about a collective bargaining agreement as well,” said Timothy Drea, secretary treasurer of Illinois American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). “This is bigger than AFSCME. This is bigger than AFL-CIO. This includes the trade unions. This includes a lot of people statewide from Chicago, from Waukegan to Cairo. It creates a lot of havoc.”

A spokesperson for the governor said he plans to review the bill when he receives it. It is unlikely, however, that he would approve it with a provision that limits his negotiating powers with unions. The bill passed with enough votes to override a Quinn veto in the House but not in the Senate. However, if it comes to that, new members will be in both chambers by the time a vote would come up.

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