Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Below is an important survey that I hope you’ll devote a few minutes to regarding parking in downtown Joliet. There is also news on state bond rating and pensions. Finally, a few items on a national level. Still time to sign up for our luncheon next week. See below.
We have an informational luncheon lined up for next Thursday, April 28th featuring State Senators John Connor and Meg Loughran Cappel, Assistant House Majority Leader Natalie Manley, State Representative Larry Walsh, Jr., and State Representative Mark Batinick. They will form an Illinois Legislative Panel to talk about topics such as the state budget, unemployment insurance trust fund, tax cuts, crime bill, and much more. You can register for the event here: http://jolietchamber.chambermaster.com/events/details/2022-member-lunch-april-28-legislative-panel-6431
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Downtown Joliet Parking Study Survey
The City of Joliet is in the process of conducting a Downtown Parking Study to help improve the management and operation of parking and mobility Downtown. WGI was hired by the City of Joliet to conduct an assessment of the downtown parking area. As part of this assessment WGI has prepared a parking survey for downtown parking users. The more feedback we get, the more information we can provide in order to improve our downtown parking. Please consider all the following topics:
- Parking conditions
- Parking policies
- Parking rates
- Commuter parking operation
- Parking enforcement
- Parking and wayfinding signage
- Employee parking options
- Parking technology
- Pedestrian and bicycle infrastructure
This 5-minute survey will provide valuable feedback to help in this effort. All responses are anonymous. We appreciate you taking the time to help with this effort. After you complete the survey, you can be entered into a raffle to win Slammers baseball tickets. You will just need to provide your email address, which is optional.
You may access the survey by clicking here: https://www.surveymonkey.com/r/CNCGT8V
Illinois’ Third Ratings Upgrade in 10 Months
Governor JB Pritzker celebrated the state’s improved bond rating from Moody’s Investor Service on Thursday, the second such upgrade by Moody’s in less than a year and third overall in two decades. Since taking office, Gov. Pritzker has tirelessly focused on strong and responsible fiscal management, working with the General Assembly to hold the line on spending while making key investments to strengthen Illinois’ outlook.
Moody’s last upgraded the state’s bonds in June of 2021 and today’s upgrade credited the state’s “solid tax revenue growth over the past year” which expanded the state’s ability to rebuild financial reserves and increase payments toward unfunded liabilities. Moody’s noted that Illinois is “on track to close the current fiscal 2022 with its strongest fund balance in over a decade,” its progress in repaying its debts, and its increased pension contributions, taken as an indication of the state’s increased commitment to paying its pension debt.
“Illinois was in a deep hole in the years before I was sworn into the governorship, and together with the General Assembly, step by step, we are putting Illinois on firm fiscal footing,” said Governor JB Pritzker. “This credit upgrade means Illinois will likely pay a lower interest rate, saving taxpayers hundreds of millions of dollars in the coming years. I would like to especially thank Speaker Welch, President Harmon, Leader Greg Harris, Senator Elgie Sims, Comptroller Susana Mendoza and Treasurer Michael Frerichs for their partnership. There’s more work to be done, but step by step, rung by rung, we are steadily climbing the ladder out of a hole that was dug over decades. Illinois’ future is bright.”
The upgrade follows the enactment of the state’s fourth balanced budget in a row, while providing $1.8 billion in tax relief to the working families of Illinois and marked Illinois’ first contribution to a Rainy-Day Fund in 18 years, as well as a $500 million overpayment toward the state’s pensions. The historic budget places Illinois it its strongest financial position in a generation while funding key investments for education, human services, law enforcement and violence prevention.
Moody’s upgraded Illinois’ rating on its General Obligation bonds to Baa1 stable outlook from Baa2 stable outlook, and also upgraded Build Illinois sales tax bonds to Baa1 from Baa2 while maintaining their stable outlook. Moody’s affirmed the Baa3 rating and stable outlook on outstanding Metropolitan Pier and Exposition Authority bonds that are partially paid with state appropriations.
The rating of a state’s bonds is a measure of their credit quality. A higher bond rating generally means the state can borrow at a lower interest rate, saving taxpayers millions of dollars.
Between 2015 and 2017, the State of Illinois suffered eight credit rating downgrades and sat at the top of many analysts’ lists of the worst managed states in the nation. At its worst, Illinois’ bill backlog hit nearly $17 billion.
Illinois risks missing merger deadline for local pension funds
Illinois is at risk of missing a statutory deadline to merge hundreds of local police pension funds, which proponents of the consolidation say could delay millions in savings. Still, Illinois Governor J.B. Pritzker is sticking to his stance that merging these assets is key to curbing local property tax hikes, he said this week.
A 2019 law championed by Pritzker seeks to combine more than 600 local public safety pension funds into two funds — one for firefighters and another for police. Pritzker argues that doing so would increase the funds’ returns and contribute to fixing the problem of low funding levels that has weighed on budgets and dampened credit ratings. However, his plans are being delayed by a pending circuit court lawsuit and mistrust about shifting local funds to a state entity, particularly among the police pension plans.
So far, the Illinois Police Officers’ Pension Investment Fund has gathered roughly $660 million of the $9.7 billion intended for consolidation by June 30, according to executive director Richard White. Additional funds that would bring the total to above $1 billion may come next month, he said. “Things are going slowly,” White said in an interview. “It means that the statutory deadline of June 30 will come and go without the consolidation process being complete.”
Three dozen current employees and retirees, along with 18 local retirement plans, are still awaiting a ruling from a Kane County Circuit Court judge on a case that seeks to block the combining of assets. They filed a lawsuit in February 2021 saying the consolidation violates the state’s constitution. “The state is working diligently with all partners toward fulfilling the aims of the legislation,” Jordan Abudayyeh, a spokesperson for Pritzker, said in an emailed statement. She declined further comment about the delays and low level of police pension asset transfers citing the pending litigation.
The delay in consolidating the assets could impact the bottom line of these funds. The Firefighters’ Pension Investment Fund is scheduled to almost fully consolidate $7.5 billion in local assets by June 30, said executive director Bill Atwood. While $6.8 billion has already been transferred in, another $700 million is coming, he said.
These merged assets will help reduce fees by $27 million a year, Atwood said. With the fund’s actuarially assumed rate of return, compounded savings could reach $375 million over a decade and more than $2.6 billion over 30 years, he said.
Even though the firefighters fund has continued to draw in assets, Atwood said there is some hesitation in transferring local funds. “We are in Illinois and there is a history of problems here,” Atwood said. “We are right here. We are very transparent. You can see returns and compare.”
White, from the police fund, said building trust is a key part of his work as his team tries to consolidate more local assets. “We are trying to be transparent. We are trying to build a relationship,” White said. “We have to establish that trust.”
Pritzker, a billionaire Democrat seeking re-election in November, has acknowledged that it may be a couple of years before savings come from combining the police funds.
The stakes are high for Illinois, the U.S. state with the lowest rating despite upgrades from S&P Global Ratings and Moody’s Investors Service. Moody’s bumped up the state’s rating in June and again on Thursday to Baa1, citing its “capacity to rebuild financial reserves and increase payments towards unfunded liabilities.”
While the state’s $130 billion unfunded pension liability weighs on its rating and finances, the same problem plagues towns and cities across Illinois. The collective unfunded liability of local public safety pension plans through the end of fiscal 2020 was $13.3 billion, according to state data compiled by the Illinois Municipal League.
The state isn’t obligated to find solutions for the local plans, but underfunded pensions weigh on budgets and soak up revenue that could be used for other services. It can also lead to higher property taxes and erode credit outlooks. And, if its municipal governments struggle, the state’s economic rebound that already lags the national average could fall further behind.
Pritzker, meanwhile, remains optimistic. The pension consolidation plan “alleviates the pressure, the upward pressure on property taxes that are caused by increasing pension burdens across the state,” he said on Tuesday, shortly after he signed a $46 billion fiscal 2023 state budget into law that separately included a one-time property tax rebate.
“Already we’ve seen tens of millions of dollars of relief that’s come from that in the fire pensions and we expect that we will see that for police pensions coming over the next two years,” Pritzker said.
Why the Supply Chain Might Be Improving
Long-standing issues with the supply chain might be getting better. This will ease upward pressure on prices and make it easier for consumers and businesses to buy items that have been in short supply.
Industrial production rose 0.9% in March, which was double expectations. The biggest cause of the jump was a sharp 8% rise in motor vehicle and parts output. The surge in production was taken by many as a sign more cars will hit the market.
Another data point is the number of ships waiting to be unloaded at the L.A. and Long Beach ports. Before the pandemic, there were no ships waiting. But because of increased demand, slowdowns at ports and railyards, and a shortage of truckers, that surged to 103 in January. Now, under 40 ships are waiting to be unloaded, which is much better, but far from the pre-pandemic norm.
Wells Fargo’s pressure gauge of supply chain metrics shows a gradual improvement, although there are still pockets of concern. Keep an eye on the COVID-19 lockdowns in China and the impacts of the Russian war in Ukraine on food and energy supplies.
Don’t Rewrite Merger Rules
The U.S. Chamber and more than a dozen trade associations sent a letter to the Department of Justice and the Federal Trade Commission on possible changes to federal merger reviews. Mergers are a vital part of our economy. The government should not inject uncertainty into merger reviews or make mergers too difficult. Doing so would harm consumers and American competitiveness.
Any revised guidelines should continue to recognize that most mergers promote competition. Mergers drive capital formation, create efficiencies, reduce costs, and lead to innovative new products and services. They provide acquired companies with critical financing and allow acquiring companies to bring new products to consumers faster, better, and cheaper.
“We would urge the agencies to abandon an unconstrained approach to merger law. Instead, as before, the agencies should update the guidelines—not rewrite them—in an incremental fashion to build on their long and successful record of informing the courts, agencies, and business community.”
Bottom line: Market competition, not government regulation, fuels American innovation. We are working to keep it that way.
Reversing NEPA Rules Will Make It Harder to Build Modern Infrastructure
The Biden administration announced its plans to reverse the 2020 National Environmental Policy Act (NEPA) updates. NEPA requires the federal government to consider the environmental impacts of projects.
Why it matters: For modern infrastructure projects, like new roads, renewable energy facilities, and telecommunications, we need a more efficient permitting process. Reinstating these NEPA rules will make it more difficult for projects to be completed on time and on budget. It should never take longer to get federal approval for an infrastructure project than it takes to build it. But that may happen if the administration reverts to the broken NEPA review process.
Executive Vice President
Joliet Region Chamber of Commerce & Industry