Quinn Expected to Sign Alt. Revenue Bond Reform Bill

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State lawmakers eye easier way to force vote on debt

6/11/2013 | by Bob Skolnik | Riverside – Brookfield Landmark

A bill that was passed unanimously by both houses of the Illinois General Assembly last month will make it easier for voters to have a say before municipalities can sell a specialized type of bonds.

Illinois Governor Pat Quinn is expected to sign the bill.

The bill applies to what are known as alternate revenue bonds, which are backed by a specific revenue stream, but also are backed up by general property tax revenues.

“It’s somewhat of a hybrid which is payable from the revenue that is generated from the project. But if that enterprise revenue that is insufficient to pay the debt service on that bond, then the full faith and credit of the public body will kick in,” said Brian Day, the lead staff attorney for the Illinois Municipal League.

The legislation makes it easier to force a so called “backdoor referendum.” The bill reduces the number of petition signatures needed to force a referendum from 7.5 percent of registered voters in a community to the lessor of 5 percent of registered voters or 5,000.

The bill also lengthens the period of time allowed to gather those signatures to 45 days from the current 30 days. The bill also prohibits firms that advise municipalities of the feasibility of paying off such bonds from being otherwise involved in the project that the bonds would finance.

“I saw abuses in the issuance of alternate revenue bonds,” said state Rep. David McSweeney (R-Barrington Hills), the prime sponsor of the bill. “We saw an example up in Lakewood in which [the purchase of] a golf club was financed with alternate revenue bonds. It didn’t work out and property taxpayers were stuck with the bills. I want to make sure it’s easier for taxpayers to stop potentially bad projects.”… (read full)

Pass pension reform,
or else

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June 14, 2013 | By David McSweeney | Chicago Tribune

In Springfield, the presence of Abraham Lincoln can always be felt. One of my favorite Lincoln quotes is “Leave nothing for tomorrow which can be done today.” We should apply his advice to Illinois’ most pressing issue today: pension reform.

As I say to hardworking teachers and state employees all the time, “I want to save your pensions, and the only way to do that is to reform the broken system.”

Illinois is in grave financial condition and insolvent. We have $7 billion in unpaid bills, $100 billion in unfunded pension liabilities and a 9.3 percent unemployment rate. With Fitch Ratings and Moody’s Investors Service dropping the state’s credit grade, Illinois now has the lowest bond ratings in the country. Illinois’ long-term tax-exempt bonds trade at more than double the borrowing spreads of California’s long-term tax-exempt bonds. It will cost Illinois taxpayers much more to borrow money in the future. The increased costs will make it necessary to cut more spending for basic services and could give some politicians another excuse to raise taxes even higher. If we don’t take action soon, I’m concerned that the downgrades will continue, and Illinois could potentially be unable to issue cost-efficient debt. If Illinois loses access to the debt capital markets, capital projects would be halted and the situation could spiral out of control.

In the House, we ended up adopting the pension reform bill sponsored by Speaker Michael Madigan. It’s not a perfect bill, but it received strong bipartisan support and is a good first step. The bill would reduce unfunded pension liabilities by more than $20 billion and help stabilize the situation. It would protect existing benefits while limiting future cost-of-living adjustments, increase the retirement age for employees under 45 years old, increase employee contributions and impose a salary cap on pensions. In the bill’s preamble, a strong case is made about why dramatic action is immediately required on pension reform. Based on my conversations with legal experts, I believe the bill will pass constitutional muster. Again, it should only be the first step in pension reform, and we need to work to transition public employees to defined contribution retirement programs so we don’t continue to create the same problems in the future.

The Senate has adopted a weaker plan that contains significantly less cost savings. It relies on giving employees various choices, and unclear assumptions have to be made to determine the actual cost savings. I strongly believe the Senate’s bill does not go far enough and will not save the pension systems or stabilize Illinois’ financial situation.

I’m hopeful that our legislative leaders can find a way to reach agreement on a deal for the Senate to pass the Madigan-sponsored measure during Gov. Pat Quinn’s special session next week. If they’re not successful, it will then be necessary for the rank-and-file to band together to force the issue and do our jobs. If the governor doesn’t sign a pension reform bill by June 30, I will file a bill to stop paying members of the General Assembly their salary until pension reform is passed. Sometimes it’s necessary to take extraordinary measures to resolve a crisis.

State Rep. David McSweeney, R-Barrington Hills, represents the 52nd House District.

New Graduated Income Tax Proposal Surfaces

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New income tax proposal emerges in Springfield

6/7/2013 | By Mike Riopell | Daily Herald

SPRINGFIELD — The same day lawmakers left Springfield without a deal on pension reform, a suburban Democrat filed legislation to amend the constitution and potentially lower income taxes for some Illinoisans and raise it for others.

And in fact, House Democrats filed a nearly identical plan the same day, suggesting a battle to overhaul Illinois’ income taxes completely could be a big topic of discussion over the next year.

Unlike the federal government, Illinois now taxes people’s income at the same flat rate of 5 percent, no matter how much money they make. The state’s constitution demands a flat rate, so a change to tax earnings based on how much income people have would require an amendment.

State Sen. Don Harmon, an Oak Park Democrat and a top member of his party’s leadership team, is behind the proposed amendment in the Illinois Senate. He says as the state’s 2011 income tax hike is set to expire, it’s inevitable that lawmakers will be talking taxes soon.

“I think we have to build momentum,” Harmon said. “It will inevitably be part of the debate.”…

State Rep. David McSweeney, a Barrington Hills Republican, has amassed 46 opponents to a graduated income tax in the Illinois House, two short of the number he needs to eventually block it. He says he’s still looking for two more.

“I’m going to work it nonstop,” McSweeney said.

The battle over taxes could be the biggest budget challenge lawmakers face next year, perhaps bigger than the ongoing pensions battle. The income tax hike is set to expire in January 2015, halfway through the state’s budget year.

When Fitch’s downgraded Illinois’ credit this week, it cited its $100 billion in pension debt, first. But, second, the agency pointed to long-term issues with the state’s tax structure… (read full)

Opposition Builds Against Graduated Income Tax

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Move against progressive income tax
continues to gain momentum

6/6/2013 | By Ben VanMetre | Illinois Review

llinois lawmakers want to pass another multi-billion dollar tax increase in Illinois in the form of a progressive income tax. That discussion materialized earlier this year when state Rep. Naomi Jakobsson, D-Urbana, proposed an amendment (HJRCA 2) to swap out Illinois’ constitutionally protected flat rate income tax for a progressive tax.

The plan is to make permanent the temporary 2011 tax hike and to swap out Illinois’ constitutionally protected flat rate income tax for a progressive income tax. That scheme lets lawmakers tax personal income at ever-increasing tax rates as income increases. That’s in stark contrast to Illinois’ current income tax, which applies the same flat rate to all income.

The progressive income tax is a money grab disguised as tax reform.

If successful, this tax increase would further stifle Illinois’ already struggling economy. A progressive income tax will mean higher taxes for middle-class Illinoisans and would destroy much-needed jobs for poor and working-class families.

The good news is state Rep. David McSweeney, R-Barrington Hills, introduced a measure that opposes efforts to pass a progressive income tax (HR 241). This resolution gained 46 sponsors and bipartisan support.

McSweeney’s effort to oppose the next multi-billion tax increase in Illinois is a great example of the leadership that Illinois so desperately needs. Lawmakers already broke their promise regarding how they were going to use the additional money from the record 2011 tax hike – they haven’t earned the right to take even more money from hardworking families in Illinois.

- Ben VanMetre is Senior Budget and Tax Policy Analyst at Illinois Policy Institute

Stop the Madness.
Adopt Pension Reform Now.

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6/5/2013 | by David McSweeney

On May 31st, the 98th General Assembly adjourned after a week of high paced legislative action. The state’s financial situation remains dire. There are $7 billion of unpaid bills; the unemployment rate is 9.5%; Illinois’ credit has been downgraded and the pension crisis looms. Yet in spite of all this, the Legislature’s reckless spending habits continue to spiral out of control. Most importantly, the Legislature failed to adopt badly needed pension reform.

I was sworn in on January 6th and immediately focused on fulfilling my campaign pledges. I declined a legislative pension, voluntarily took a 10% pay cut, reduced my office budget by 10% and filed a bill to repeal the 67% income tax increase of 2011. I’m proud of those actions and I believe it set a positive tone for my performance during the entire session. I also plan to continue to lead the fight against the adoption of a graduated income tax in Illinois that would hurt families and kill jobs.

Considering my financial expertise, I was assigned to serve on the House Revenue Committee, a slot not traditionally assigned to freshman members. For weeks, I worked with Representatives on both sides of the aisle on my constitutional amendment to abolish the Lt. Governor’s position, which advanced with overwhelming House support. I have been told that it is a rare feat for a freshman legislator to pass a constitutional amendment. There are now 35 Senate sponsors of my constitutional amendment and it will likely be enacted next spring and if so, will be on the ballot in 2014. Eliminating the Lieutenant Governor’s office will save approximately $2 million per year.

I’ve also filed and supported a series of property tax relief measures. I supported a three year freeze on all property tax levies, freezing property tax levies when housing values decline and a two year freeze on Township property tax levies. I’m pleased to report that my HB 983 passed both the House and Senate and is now on the Governor’s desk to be signed. HB 983 reforms the process for governmental units to issue alternate revenue bonds and makes it easier for taxpayers to stop bad projects that could result in higher property taxes. Specifically, the bill, which I worked closely with Representative Jack Franks and Senator Pam Althoff on, reduces the number of signatures required to force a referendum on the issuance of alternate revenue bonds.

Pension reform was my absolute top priority this session. I serve on the Personnel and Pensions Committee and was a leader in the fight for real pension reform. Our state cannot move forward until we address this crisis that is darkening the economic future of our state and crowding out other essential government services. Nothing substantial was accomplished on pension reform this session, but I remain committed to being part of the solution. We need to stop the madness and immediately adopt pension reform in a special legislative session.

A major push for job creation in Illinois finally began gaining traction in the last days of session. A measure authorizing fracking passed the Illinois House. Fracking is an energy drilling process that uses large amounts of fluid under high pressure to force to the surface oil and gas that is trapped under ground. Fracking could potentially generate a lot of new revenues for Illinois and create thousands of new jobs in various parts of the state. I strongly supported this important bill.

Another positive note is the overwhelming passage of concealed carry legislation on the last day of session. I supported the bill because I believe in the 2nd Amendment rights of all Americans.

To date, I have hosted three town hall meetings in which I’ve had the pleasure of meeting with district residents to hear their concerns and ideas on how to address the state’s most pressing issues. My next Town Hall meeting will be on Saturday, June 29th from 10-11AM at Cary Park District Community Center located at 255 Briargate Road in Cary. I encourage all constituents to attend.

I came into the General Assembly in earnest, ready to fight for my constituents at the Capitol and tackle our toughest issues. On day one, I began pursuing my commitments while demonstrating the courage to act on politically unpopular issues. As the 52nd District State Representative, I thank the residents who have given me the opportunity to serve them and be their voice in Springfield. We will never all agree 100% of the time, but I assure you that I will always listen and tell you where I stand.

Revenue Bond Reform Bill heads to Governor

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Alternate revenue bond bill headed to governor

6/1/2013 | By Chelsea McDougall | Northwest Herald

A bill aimed at allowing voters to force alternate revenue bonds to referendum is headed to the governor.

Alternate revenue bonds, used by municipalities for a wide variety of projects, do not now require voter approval. The bonds rely on an identified revenue stream to repay the issued debt. But if revenue projections fall short, taxpayers are left to make up the difference by way of a property-tax increase.

The bill tightens regulations in the debt reform act, lowers the number of signatures required to force a referendum and increases the time limit to collect signatures.

The bill’s chief sponsor, state Rep. David McSweeney, R-Barrington Hills, said the bill was born in McHenry County. In the House, state Rep. Jack Franks, D-Marengo, co-sponsored, and state Sens. Pam Althoff, R-McHenry, and Dan Duffy, R-Lake Barrington, sponsored a Senate version.

McSweeney has said he introduced the bill after McHenry County College officials indicated they could issue alternate revenue bonds to pay for a proposed expansion and repay the debt from a proposed health club.

College officials also said they would explore debt certificates and public-private partnerships to fund an expansion.

“I do think that this is very positive for the taxpayers,” McSweeney said. “I was very closely monitoring the McHenry County College situation. This sends a message that they be very careful about trying to issue alternate revenue bonds for the wellness center.”… (read full)

Revenue Bond Reform

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Some towns may see tougher limits on borrowing

5/31/2013 | By Joe Mahr | Chicago Tribune

Residents in some suburbs could have an easier time stopping their town leaders from taking out big loans under a measure sent to the governor Wednesday.

The legislation is aimed at a category of cities and villages that have limits on how much they can borrow and raise taxes. The measure was in reaction to Tribune reports that found some of those suburbs had taken out a special kind of loan in ways that got around the limits, in essence forcing tax increases on residents who otherwise should have been protected from them.

Illinois law allows residents in those communities to veto such borrowing deals before they’re made, but only if residents quickly gather enough signatures on petitions to demand referendums on the deals.

The legislation addresses criticism that the current rules require residents to gather too many signatures too fast in order to bring such borrowing deals to the ballot. Under the proposal, residents will get 45 days instead of the current 30 days, and fewer signatures will be required in most municipalities to force towns to put the deals up for voter approval.

Rep. David McSweeney, R-Barrington Hills, initially proposed much broader legislation to vet such borrowing but ultimately scaled it back to gain approval. He said he expects the new rules will “make government units think twice” before borrowing for “bad projects.”

Gov. Pat Quinn has yet to take a position on the measure, which addresses one of several criticisms of Illinois’ mostly loose limits on local leaders’ borrowing.

A Tribune series exposed how, in some suburbs, elected officials took out massive loans for questionable projects that ended up benefiting the politically connected while sticking taxpayers with property tax increases to cover decades of debt payments… (read full)

Quad-Cities Dispatch Says
“Let voters decide.”

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Editorial: Eliminate lite gov? Let voters decide

5/20/2013 | The Dispatch and The Rock Island Argus

Last month, an overwhelming number of Illinois House lawmakers took a step that could improve government efficiency and eliminate waste.

They voted 83-28 to pass to the Senate a bill that would let voters decide whether to rid themselves of the largely ceremonial office of lieutenant governor. The bill sitting before the Senate would seek voter approval to jettison it beginning in 2019. Rep. David McSweeney, R-Barrington Hills, said he sponsored the effort because the office is a luxury the flat-broke state cannot afford. Eliminating it would save $1.8 million. While that may seem like a drop in the bucket in Illinois’ vast fiscal sinkhole, it is nothing to sneeze at, particularly when such savings come at a relatively small cost.

Though Illinois has had lieutenant governors who work hard — for example, current Lt. Gov. Sheila Simon — the job’s official duties are virtually non-existent. If a governor doesn’t want you to do something, you can’t.

Some lite govs have found it so boring, they quit; others considered it. Though she says she sees the post’s value, Lt. Gov. Simon has announced she will not run again so she can explore a position of “greater impact.” She also supports letting voters decide its future. So do we.

The way in which she got the job also is instructive. Voters no doubt remember she was chosen to run as lite gov when Gov. Pat Quinn’s former Democratic running mate was forced to drop out amid accusations of domestic abuse and steroid use. The primary victory of the little-known Scott Cohen and the party’s failure to vet him properly proved embarrassing for the Democrats and almost certainly impacted Gov. Quinn’s election numbers.

Arguments that good government needs a bifurcated executive branch also ring hollow. Consider, for example, that while he served as Rod Blagojevich’s lieutenant, Pat Quinn, could do little to prevent the criminal activity which led the ex-governor to the federal prison cell he now occupies… (read full)

Resolution Condemns IRS

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Senger, McSweeney Resolution Condemns IRS, Demands Investigation

5/16/2013 | By Meredith VanKampen | Chicago Tribune

SPRINGFIELD – In the wake of the recent scandal regarding politically-motivated targeting by the Internal Revenue Service of conservative groups, State Representatives Darlene Senger (R-Naperville) and David McSweeney (R-Barrington Hills) today introduced a resolution condemning the IRS actions and demanding an investigation into the individuals involved in targeting Americans for their political views.

Recent reports indicate that starting in 2010, personnel of federal IRS, including high-ranking and supervisory personnel, singled out American individuals and groups based on their apparent political leanings. These groups have been denied or delayed recognition of their nonprofit standing based upon how these groups use certain identification words favored by political conservatives, including “Tea Party”, “patriot”, and “9/12”.

“This is an outrageous violation of the trust that the American people have put in the federal government,” says McSweeney. “Any politically-motivated targeting of Americans by the IRS is intolerable and I expect a full investigation.”

“I think if there is something that we can all agree on here, it is that we want to find out the truth about what really happened at the IRS,” says Senger… (read full)