Greetings from Springfield, where members of the General Assembly are completing the final days of the Spring Session. As an incentive to the legislature to complete its work, the Illinois Constitution increases the vote threshold for passage from a simple majority to a three-fifths majority for any bill passed after May 31 in order to become law immediately (Constitution – Article IV, Section 10). Starting June 1, any bill passed in 2017 by a simple majority will not be allowed to become effective until June 1, 2018.
Time is running out. I remain hopeful that leading Democrats will recognize the importance of a truly balanced budget and will work with Republicans to create a compromise budget. Governor Bruce Rauner has stated publicly on many occasions that he will not sign a budget that is not balanced and which does not provide property tax relief and other reforms that will grow jobs and the Illinois economy. I remain committed to working with my colleagues to achieve a balanced budget with necessary reforms.
Happy Memorial Day
Today we honor those who have given their last full measure of devotion to defend our nation and its freedoms. It is a day of remembrance for those who sacrificed and died in our nation’s service, and it is a day of celebration in memory of all who have fought to defend our freedom.
Today is also about honoring all service men and women who continue to defend the liberties proclaimed by our Founding Fathers in the Declaration of Independence and through the United States Constitution. It is important that we not only recognize their service; but also respect their devotion to duty. As you gather with friends and family today, please take a moment to appreciate their sacrifice.
Bipartisan Bill Seeks to Address Tuition Increases and Other Issues at University of Illinois Campuses
Today we are seeing an alarming number of Illinois high school graduates who are choosing to continue their college educations in other states. This year I am co-sponsoring legislation that would control tuition hikes, increase financial aid for lower income students and increase overall graduation rates by students from Illinois who attend the University of Illinois. As a 2011 graduate of the University of Illinois at Urbana-Champaign, this trend is extremely troubling, and I am working with a bipartisan coalition of lawmakers to help restore confidence in our state’s flagship University. By restoring faith in Illinois’ largest university system, we can keep these bright graduates in Illinois.
Through HB 2996, a five-year commitment would be established between the State of Illinois and the University of Illinois, to accomplish the following:
State of Illinois’ Obligations:
- Allocate stable funding (starting at FY15 levels) to the University annually during each year of the agreement
- Create an Illinois Excellence fund to support the University’s efforts to retain and recruit top tier faculty
- Reform the Procurement Code in ways that provide the University with flexibility and improve efficiency
- Amend the Property Control Act in ways that ease cumbersome regulations
- Reinstate the Certificate of Participation Program to finance academic buildings
University of Illinois’ Obligations:
- Maintain specified graduation and retention rates
- May not increase tuition and fees by more than the rate of inflation
- Illinois residents must comprise at least 50% of any enrollment growth
- Admit 14,000 Illinois HS graduates to UIUC, 11,800 to UIC, and 1,500 to UIS annually
- Commit at least $170 million to in-state financial aid through the Invest in Illinoisans program
- Provide annual report to the State on key indicators
Olsen Speaks to GED Recipients at Recent Graduation Ceremony
Recently I had the privilege of speaking at the High School Equivalency (GED) graduation ceremony held on the campus of the College of DuPage (COD). I congratulated the GED recipients on their dedication to completing their high school equivalency requirements, and also spoke about each of our abilities to set new directions for our own lives. Other speakers at the event included State Senator Pat McGuire and COD Chairman Deanne Mazzochi.
Olsen Bills Moving through Committee Process
Last week I had the opportunity to present two bills in House committees. SB 928 requires additional categories of information must be made available to prospective purchasers of units or properties in a common interest association such as a Home Owners Association, increasing transparency. SB 1486 clarifies language in the statutes and removes obsolete and duplicative language with regard to the State Board of Education. I’m proud to sponsor these bipartisan initiatives. Both represent small steps to move our State forward.
Olsen Joins Lawmakers to Recognize Foster Care Month in Illinois
On May 23 I joined several of my colleagues, Susan McConnell from Let It Be Us and Director George Sheldon from the Illinois Department of Children and Family Services in the Capitol Rotunda to show our support for youth in care in Illinois.
Lack of Budget Leads to Impending Crisis in Illinois Debt Market
Market prices this week for Illinois-issued securities, including but not limited to general obligation debt, indicated a significant belief among market traders that Illinois’ credit status could continue to decline in the near future. This week, the interest rate paid by Illinois taxpayers to lenders willing to purchase 10-year Illinois General Obligation (G.O.) bonds rose to 4.43%, 245 basis points above the interest rates demanded by lenders to units of the U.S. private sector that are rated triple-A (AAA).
The three largest credit-rating agencies currently rank Illinois G.O. debt at the equivalent of BBB with a negative outlook, only two notches about “junk bond” territory. Implementation of the “negative outlook” posted by Fitch Ratings and its brethren credit measurement firms could lead to Illinois’ G.O. debt being cut to BBB-, the lowest rank available for investment-grade securities, and then to the junk-bond-level BB+. The fact that Illinois taxpayers this week were paying interest rates more than double the 1.98% market rates charged against AAA borrowers indicated a significant belief in credit markets that this was a serious possibility facing the State of Illinois. Market analysts have told clients of key lending coordinator Citigroup that the 4.43% interest rate currently being paid by Illinois and its taxpayers already anticipates, or “prices in,” a further cut in the Illinois G.O. credit rating from BBB to BBB-.
Illinois’ decade-and-a-half of structural deficits are strongly implicated in the current Illinois credit rate crisis, which also affects many private-sector entities in Illinois, including entities that are involuntary creditors of the State due to the $14.5 billion backlog of unpaid bills.
Also affected are units of the Illinois public sector. A wide variety of entities, including State of Illinois public universities, are depending upon funding from the State. Many Illinois public universities have seen cuts in their credit ratings in recent months that track the cuts imposed on Illinois. Credit ratings of units of Illinois local government and public school districts are also seen as being at risk from Illinois’ current budget impasse.
This bleak news reaffirms my commitment to work in a bipartisan fashion toward a balanced budget with reforms, which would address this significant issue for our State.
David S. Olsen