Legislative Program. Building Stronger Communities
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1 Legislative Program Building Stronger Communities
2 2016 NWMC Legislative Committee Sandra Frum, Co Chair President, Village of Northbrook Joe Farwell Trustee, Village of Arlington Heights Maria Lasday Manager, Village of Bannockburn Karen Darch President, Village of Barrington Ed Ritter President, Village of Carpentersville Matthew Bogusz Mayor, City of Des Plaines Dan Shapiro Trustee, Village of Deerfield Elizabeth Tisdahl Mayor, City of Evanston Wally Bobkiewicz Manager, City of Evanston Lawrence Levin President, Village of Glencoe Todd Hileman Manager, Village of Glenview Nancy Rotering Mayor, City of Highland Park Bill McLeod Mayor, Village of Hoffman Estates Jim Norris Manager, Village of Hoffman Estates Kathleen O Hara President, Village of Lake Bluff Robert Kiely Manager, City of Lake Forest Harriet Rosenthal, Co Chair Mayor, Village of Deerfield Gerald Turry Mayor, Village of Lincolnwood Dan DiMaria President, Village of Morton Grove Arlene Juracek Mayor, Village of Mount Prospect Dave Strahl Assistant Village Manager, Village of Mount Prospect Jeff Rowitz Deputy Village Manager, Village of Northbrook Jane Goldenberg Trustee, Village of Northfield Jill Brickman Supervisor, Northfield Township Wendy Morgan Adams Clerk, City of Prospect Heights Al Larson President, Village of Schaumburg Kathleen Tempesta Director of Community Service, Village of Schaumburg George Van Dusen Mayor, Village of Skokie Dean Argiris President, Village of Wheeling Tim Frenzer Manager, Village of Wilmette
3 Dear Friend of the Northwest Municipal Conference: The Northwest Municipal Conference (NWMC) is pleased to present you with our 2016 Legislative Program. Assembling this program has been uniquely challenging. While we have become familiar with the anxiety connected to the annual state budget process and the escalating pension burden, 2016 has brought unprecedented uncertainty. As we deliver this year s Legislative Program, the state continues to operate without a budget and faces an increasing deficit. Illinois government operations are being held together by court orders and patchwork appropriations. Critical local revenues were withheld for nearly half the state fiscal year. The restoration of local revenues provides a respite from budget impasse; however, with the state budget unresolved, our communities must operate under a cloud of insecurity and instability. The state s repetitive budget crises threaten Illinois fragile economic recovery, lead to under investment in critical infrastructure and uncertainty in essential services. The 2016 NWMC Legislative Program does not prescribe an ultimate solution for the problems facing Illinois. The solutions we propose have been crafted to address the stability of local governments and to enable us to grow our state and local economies. The Conference s policy recommendations are a necessary component in strengthening our communities and state. As President of the Northwest Municipal Conference, I extend an invitation to our legislators to work cooperatively with our communities to achieve solutions that strengthen Illinois. Sincerely, Tom Rooney President, Northwest Municipal Conference and Mayor, City of Rolling Meadows
4 Table of Contents Ensure the Stability of Local Government 3 Revenue and Essential Services Maintain Effective Local Governments 5 Federal Issues 11 Illinois Constitutional Officers 14 Congressional Delegation 15 State Senators 16 State Representatives 18 NWMC Contact Information 20 About the NWMC 21 2
5 Ensure the Stability of Local Government Revenue and Essential Services The fundamental role of local government is to provide essential services to residents and businesses. Whether it is the public safety activities of police and fire protection or critical water and transportation infrastructure, local governments provide the services that make our communities and state attractive for raising a family and running a business. Local and state lawmakers share the same constituents that rely on the stability that comes from these high quality public services. While the state and local governments continue to emerge from the Great Recession, 2015 brought unprecedented challenges to communities that threatened the ability to provide critical public services. Seven months into State Fiscal Year 2016, the state is still without a complete budget. While the Conference is thankful for the adoption of Senate Bill 2039, local governments went nearly six months without receiving critical revenues. NWMC communities had to respond to calls, fight fires and maintain roads while the 3
6 Ensure the Stability of Local Government Revenue and Essential Services state withheld nearly $50 million in local revenues. Strategic decisions enabled NWMC communities to weather the crisis eased by Senate Bill 2039; however, ongoing discussions of cuts to the Local Government Distributive Fund (LGDF) and property tax freezes further threaten the stability of local governments. With this background in mind, the NWMC presents the following central tenet of the 2016 NWMC Legislative Program. Make State Collected Revenues Continuing Appropriations To provide consistent revenue and stable critical services, we urge the General Assembly to pass legislation to make all state collected local revenues continuing appropriations. This change would be consistent with current state appropriations from the income tax and sales tax. Local governments are creatures of the state, and their ability to provide consistent quality public services depends in part on the stability of the state. The NWMC cannot pretend to hold the solution to the state s financial situation. Nonetheless, lawmakers can take action to assure the stability of local revenues. 4
7 Maintain Effective Local Governments The NWMC eagerly wants to work with the General Assembly and the Governor to streamline public services, provide cost savings and invest in our communities to better serve residents and businesses; however, local governments number one priority as outlined above is to provide public safety and basic infrastructure. Without stability in revenues and local services, our state and communities face severe challenges in meeting the needs of a modern economy. Unfortunately, Illinois is not fostering an environment for economic growth. The state forces local governments to operate in an inefficient, costly and outdated legal and regulatory environment. The state s repetitive budget crises are causing the state and communities to under invest in critical infrastructure and preventing focus on the long term investments that can enhance local and state economies. In order to provide value for residents and businesses, Illinois governments have aggressively modernized to provide the most efficient and cost effective public services. Together, local leaders and state lawmakers must pursue common sense approaches that respect those doing the work to sustain our communities while protecting taxpayers. It is in the state s interest to remove cumbersome impediments and give communities the tools to provide cost effective public services. Consolidate public safety pension funds into IMRF State lawmakers should take immediate and constitutional action to consolidate the over 660 individual public safety pension funds into the Illinois Municipal Retirement Fund (IMRF), the model pension fund in Illinois. This would increase investment returns 5
8 Maintain Effective Local Governments (reducing the burden on taxpayer), realize economies of scale not currently available (which further reduces the taxpayers burden) and provide a more stable environment for the pensions of all public safety employees. Over the last decade, IMRF outperformed all of the 70 individual police and fire pension funds operated by NWMC members. Maintaining 660 separate pension funds is a lost opportunity for taxpayers, which are forced to contribute larger 6
9 Maintain Effective Local Governments amounts to cover for lower investment returns. IMRF has the expertise, economies of scale and portfolio size necessary to produce maximum returns on taxpayer dollars. Reduce Impact of Prevailing Wage Act on Local Taxpayers State lawmakers should reform the Prevailing Wage Act (PWA). The PWA has served to increase the cost of public works related projects oftentimes with no clear measurable benefit to taxpayers. Unlike a free market economy, where businesses would bid in competition for local government projects, the PWA replaces unfettered competition by imposing an artificial floor on labor costs. While there are local government projects where having highly skilled labor is critical and may produce greater overall efficiencies, there are also many projects where it is completely unnecessary and adds no value. For example, exempting activities such as landscaping or driving a delivery truck from the PWA will save taxpayers money without jeopardizing the work. Additionally, state lawmakers should reject the further expansion of this law through the imposition of a Responsible Bidder requirement in the PWA. Balance the interest arbitration process State lawmakers should require arbitrators to take into account economic factors such as the budgetary constraints facing local governments and cost of living standards, when determining total compensation packages. Local taxpayers are disadvantaged by an interest arbitration process that makes it difficult to negotiate contracts that reflect their community s needs or ability to pay. Additionally, lawmakers should 7
10 Maintain Effective Local Governments empower arbitrators to explore compromises that lie between the final offers put forth by the employer and the union. Finally, further clarification is required on the recently adopted firefighter minimum manning provision via Senate Bill 1246, an agreed bill, to ensure it does not impose additional burdens on taxpayers. Provide sustainable transportation funding for roads, bridges and transit The state must end the boom and bust cycles of inconsistent funding and develop a source of revenue that can keep pace with system needs. Illinois must allocate funding and select projects in a cost effective way to maximize economic benefits. Additionally, the state must remove unnecessary hurdles such as the lengthy review of project agreements, which add costs to project delivery. While the need for investment in the state s transportation infrastructure has never been higher, funding continues to dwindle as the Illinois Jobs Now program spending ends and traditional revenue sources shrink. Roadways are congested, bridges are closed or load rated, trains are delayed, buses break down and transit serves a smaller share of the region s population. Each of us faces increased individual transportation costs, as poorly maintained roadways cause more wear and tear on vehicles. Illinois will not experience the benefits of a modern economy if critical infrastructure is crumbling around and underneath our communities. 8
11 Maintain Effective Local Governments 9
12 Maintain Effective Local Governments Clarify taxing district responsibilities for property tax appeals and refunds The NWMC urges lawmakers to pass legislation to clarify TIF districts and EDA s responsibilities regarding property tax appeals and refunds. Tax Increment Financing (TIF) districts and Economic Development Areas (EDA) are two development tools that municipalities can use to enhance their local economies. Unfortunately, ambiguity in current state statutes has created a situation where property tax refunds may be disproportionately borne by municipalities if the TIF or EDA is retired. Enact reasonable Public Safety Employees Benefit Act (PSEBA) definition Lawmakers should pursue legislation to align the PSEBA definition of catastrophic injury with the federal definition. Adequately providing for public safety employees injured in the line of duty is a vital responsibility of local governments; however, the court s current definition of catastrophic injury has led to unreasonable rulings under the PSEBA. 10
13 Federal Issues Pass the Marketplace Fairness Act We urge our Congressional delegation to vote for the Marketplace Fairness Act in 2016 so that all retailers are on even footing and this tax loophole is closed. This bill will modernize our nation s outdated sales tax collection process and simply allow states to enforce existing sales tax law. The Internet retail sales tax loophole costs the State and local governments hundreds of millions in lost tax revenue and places traditional retailers at a competitive disadvantage. Passing this act would level the playing field and provide critical revenue. Nationwide, states and localities are unable to collect an estimated $23 billion in owed sales tax. The National Conference of State Legislatures estimates that over $1 billion went uncollected in Illinois in 2012 due to the online tax loophole. These are revenues that could fund public safety, road construction and water main replacements. Reform the Affordable Care Act s (ACA) excise tax on health plans Federal lawmakers should exempt governments from the Affordable Care Act s (ACA) excise tax on health plans or provide an exception for plans negotiated as part of a collective bargaining agreement. While the ACA s excise tax is expected to affect the health plans of employers of all types, it will hit health plans of local governments especially hard. Local governments must collectively bargain health insurance benefits for many employees, which limits the control a community has 11
14 Federal Issues over those benefits. The excise tax will force municipalities to attempt to cut benefits for employees or pass along the federal tax to local taxpayers. While delaying implementation of the excise tax is a step in the right direction, Congress will ultimately have to address the long term implications on local governments. Protect the tax exempt status of municipal bonds We urge Congress to maintain the tax exempt status of municipal bonds. The ability to generate low cost bonds to address the capital needs of communities is a critical tool in the local funding toolkit. Eliminating the tax exempt status of municipal bonds would result in decreased investment in infrastructure and increased borrowing costs for taxpayers. Through tax exemption, the federal government provides critical support to develop and maintain essential infrastructure. The Conference was pleased to see that none of the Senate Finance Committee tax reform working groups suggested repealing the tax exempt status of municipal bonds in their recommendations. 12
15 Federal Issues Reform the Federal Emergency Management Agency s (FEMA) disaster relief funding formula The NWMC requests that Congress pursue reforms that allow deserving communities to qualify for necessary disaster relief. The federal disaster declaration process dramatically penalizes suburban communities that are within a county with a significant population center like Chicago. Due to a flaw in the declaration process, significant yet isolated damage in a community may not exceed FEMA s county thresholds for a disaster declaration. When FEMA disaster funds fail to reach communities dealing with the aftermath of significant flooding and other localized disasters, those communities must make difficult decisions oftentimes resulting in reduced municipal services, increased debt or new/increased local taxes. 13
16 Illinois Constitutional Officers Bruce Rauner Governor Evelyn Sanguinetti Lieutenant Governor Lisa Madigan Attorney General Jesse White Secretary of State Michael Frerichs Treasurer Leslie Geissler Munger Comptroller 14
17 Congressional Delegation Senator Richard Durbin Senator Mark Kirk Representative Mike Quigley 5th Congressional District Representative Peter Roskam 6th Congressional District Representative Tammy Duckworth 8th Congressional District Representative Jan Schakowsky 9th Congressional District Representative Robert Dold 10th Congressional District Representative Randy Hultgren 14th Congressional District 15
18 State Senators John Cullerton Senate President Christine Radogno Senate Minority Leader Heather Steans 7th Senate District Ira Silverstein 8th Senate District Daniel Biss 9th Senate District John Mulroe 10th Senate District Michael Noland 22nd Senate District Thomas Cullerton 23rd Senate District Jim Oberweis 25th Senate District 16
19 State Senators Dan Duffy 26th Senate District Matt Murphy 27th Senate District Laura Murphy 28th Senate District Julie Morrison 29th Senate District Terry Link 30th Senate District Melinda Bush 31st Senate District Pamela Althoff 32nd Senate District Karen McConnaughay 33rd Senate District Don Harmon 39th Senate District 17
20 State Representatives Michael Madigan Speaker of the House Jim Durkin House Minority Leader Kelly Cassidy 14th House District John D Amico 15th House District Lou Lang 16th House District Laura Fine 17th House District Robyn Gabel 18th House District Michael McAuliffe 20th House District Anna Moeller 43rd House District Fred Crespo 44th House District Christine Winger 45th House District Deborah Conroy 46th House District Michael Fortner 49th House District Ed Sullivan, Jr. 51st House District 18
21 State Representatives David McSweeney 52nd House District David Harris 53rd House District Thomas Morrison 54th House District Martin J. Moylan 55th House District Michelle Mussman 56th House District Elaine Nekritz 57th House District Scott Drury 58th House District Carol Sente 59th House District Sheri Jesiel 61st House District Sam Yingling 62nd House District Jack Franks 63rd House District Barbara Wheeler 64th House District Michael Tryon 66th House District Kathleen Willis 77th House District 19
22 NWMC Contact Information The Northwest Municipal Conference is committed to working with our State and Federal elected officials to advance legislation that supports local government. Please feel free to contact us to further discuss the initiatives contained in our 2016 Legislative Program or any other issues that are of importance to local governments. Tom Rooney NWMC President Mayor, City of Rolling Meadows Sandra E. Frum Co Chair, NWMC Legislative Committee President, Village of Northbrook Harriet Rosenthal Co Chair, NWMC Legislative Committee Mayor, Village of Deerfield Mark L. Fowler NWMC Executive Director Larry Bury NWMC Deputy Director Chris Staron NWMC Policy Analyst 20
23 About the NWMC Founded in 1958, the Northwest Municipal Conference serves to strengthen communities and foster intergovernmental cooperation throughout the north and northwest suburbs of Chicago. Our membership of forty four municipalities and one township represents over 1.3 million Illinois residents and covers over 300 square miles in Cook, DuPage, Kane, Lake and McHenry counties. Our organization provides numerous services to our membership with a primary focus on three areas: legislative advocacy; transportation and environmental planning; and, operation of the Suburban Purchasing Cooperative (SPC). The NWMC is registered as a 501(c)(3) not for profit organization and is primarily supported through membership dues, planning grants and enterprise revenues. Northwest Municipal Conference 1600 East Golf Road, Suite 0700 Des Plaines, IL Phone: (847) Fax: (847) cog.org Printed in house at NWMC 21
24 Antioch Arlington Heights Bannockburn Barrington Bartlett Buffalo Grove Carpentersville Cary Crystal Lake Deer Park Deerfield Des Plaines Elk Grove Village Evanston Fox Lake Glencoe Glenview Grayslake Hanover Park Highland Park Hoffman Estates Kenilworth Lake Bluff Lake Forest Lake Zurich Libertyville Lincolnshire Lincolnwood Morton Grove Mount Prospect Niles Northbrook Northfield Northfield Township Palatine Park Ridge Prospect Heights Rolling Meadows Schaumburg Skokie Streamwood Vernon Hills Wheeling Wilmette Winnetka
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