The Pension Systems Modernization Task Force, established through House Joint Resolution 65, had its first meeting in June with a second in early July. The Task Force is charged with recommending pension benefit changes to modernize the Teachers’ Retirement System of the State of Illinois, the State Universities Retirement System, and the State Employees’ Retirement System of Illinois. At this time four sub-committees have been established: Benefits, Investment Policy, Funding and Collective Bargaining. The Task Force will continue to meet monthly through October; sub-committees are meeting bi-weekly. A full report for the Task Force is due to the Governor by November 1^st. SUAA is monitoring the activities of the Task Force and will report periodically on certain findings. Accordingly, these findings will not affect annuitants. It was repeated several times during the July 17 meetings.

Two reports that are being referenced during these meetings are the Wisconsin Legislative Council’s 2006 Comparative Study of Major Public Employee Retirement Systems. (The 2008 edition should be out soon). This report can be accessed by http://www.legis.state.wi.us/lc . Another report is from the Commission on Government Forecasting & Accountability (COGFA). The link for Pensions – A report from the Commission on Government Forecasting & Accountability on the Financial Condition of the State of Illinois Retirement Systems as of June 30, 2008 is http://www.ilga.gov/commission/cgfa/cgfa_home.html .

Other reports will be presented as the sub-committees gain more knowledge. For instance, Aon will present the analysis of the cost/benefit s of consolidating the five pension funds investments (on COGFA’s website); the schedule for each systems asset allocation analysis; and, a comparison between public and private contributions as a percentage of pay for retirement benefits.

On July 15, SB 1292 became PA 96-0043, effective immediately. This bill has taken many changes since its introduction. The final Amendment (#5) authorizes $3.466 billion in General Obligation Bonds to be used for the purpose of making the State’s Fiscal Year 2010 required contributions to designated retirement systems. The terms of the Bonds may not exceed 5 years from issuance, and the Bonds must be issued with principal or mandatory redemption amounts in equal amounts, with payment of principal beginning in the first State fiscal year following the fiscal year of issuance. The net proceeds of the sale will allow another $2.230 billion to be directed to State funded human services programs and community-based human service providers. There is also $1.240 billion for the Governor to spend at his discretion.
Senate Vote: 43 Yeas 12 Nays 1 Present (Bomke, Frerichs, Meeks - No Votes)

As an FYI – Moody’s Investors Service put the state of Illinois’ general-obligation bond ratings on review for possible downgrade, saying the state has long-term budgetary challenges. (The Wall Street Journal, July 16, 2009, 10:36 a.m. ET)

Additional features of the budget are - $3.2 billion State bills to be piled up and unpaid;
Lawmakers are to take 12 unpaid furlough days representing approximately a 5% cut in pay; allows Governor to make $1 billion in spending cuts in State Government (possible layoffs and 12 furlough days for state workers); and an additional 14% in human-service grants and spending. Unfortunately, this still leaves a $5 billion deficit that will need to be addressed before the Fiscal Year is over.

SB 1433 now PA 96-0044 became the main Fund Sweeps bill – authorizing $356,038,973 to be transferred from special (dedicated) funds to the General Revenue Fund. Some examples of fund transfers are: Fire Prevention Fund $10,400,000; Mental Health Fund $24,560,000; Hansen-Therkelsen Memorial Deaf Student College Fund $503,700; State College and University Trust Fund $20,204; University Grant Fund $5,608; Public Pension Regulation Fund $1,000,000; Illinois Student Assistance Commission Contacts and Grants Fund $128,850; Tobacco Settlement Recovery Fund $10,000,000; Medicaid Buy-In Program Revolving Fund $1,000,000; Marine Corps Scholarship Fund $1,200; State Police Services Fund $7,082,080; total of 201 funds swept! Effective Immediately. Senate Votes: 37 Yeas 22 Nays

SB 1912 now PA 96-0045 is the Budget Implementation Bill (BIMP). Within this legislation is the ability to require all members of the General Assembly to take 12 furlough days in Fiscal Year 2010; and additional $24,197,800 in sweeps from special funds; allows for the Foundation Level for public education raised to $6,119; emergency rules to quickly implement the budget; and allows for the $1.1 billion to be kept in reserve under control of the Governor. The intent of the bill implements the spending contained in the appropriations bill. Effective Immediately. Senate Votes: 55 Yeas 1 Present (Dillard) Bomke, Frerichs, Meeks - No Vote

SB 1216 now PA 96-0042 became the Appropriations Bill. The intent of the bill is to provide lump sum appropriations to be made. In addition, it allows the $1.2 billion from the sale of the General Obligation Bonds to be spent at the Governor’s discretion. Senate Votes: 45 Yeas
10 Nays Bomke, Frerichs, Meeks, Syverson - No Vote

An income tax increase has been put on hold.

There will be a Primary Election on February 2, 2010. August 4, 2009 is the first day for candidates to begin circulating petitions for the primary.

Veto Session dates: October 14 – 16 and October 28 – 30