Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Happy Holidays to all of you and your family. This will be our final edition of the roundup in 2024 with plans to return January 8th. The City of Joliet finalized their 2025 budget last night so a quick review of those highlights is below. Also covered is a new report on Illinois pensions, a change at IDOT, and some information for those that have not yet completed their annual anti-sexual harassment training.
*Government Affairs Roundup brought to you by CITGO*
City of Joliet Budget
The Joliet City Council has approved the 2025 fiscal year budget, which prioritizes spending on public safety, vehicle equipment, facility maintenance, and water. The total budget is $661.6 million, with an estimated $276 million focused on water operations, water main replacement, and the Lake Michigan Water Project.
Finance Director Kevin Sing presented budget highlights, emphasizing the nearly six-month process that began on June 3rd. “The budget process began in early June and continued through late fall as we worked to balance the needs of our staff and present a balanced budget to the council.”
“Great care was taken to allocate funds wisely and prudently,” explained City Manager Beth Beatty. “Departments had to justify and explain budget requests. There was a tremendous amount of scrutiny and time spent reviewing the dollars currently budgeted, as well as any new funding requests.”
The new budget provides for 22 additional public safety staff members: 14 for the police department and 8 for the fire department, with one position funded by a grant. New positions have also been added to the Information Technology Department to advance the city’s digital operations and accommodate the growing needs of personnel.
Other budget highlights include:
• Approximately 30 miles of roads and sidewalks
• 41 vehicles
• City Square & Chicago Street Project
• Maintenance improvements to Slammers Stadium
• Design for Fire Station 7 replacement
• Roadway landscape upgrades
• Street sweeper, tractor, and equipment for roadways
• 30 new police department cameras
• Ottawa Street Parking Deck repairs
• 30 miles of water main replacement
• Funding for grants for the Rialto Square Theatre and Joliet Historical Museum
The $276 million allocated for water and sewer projects is broken down as follows:
• Sewer and Water Operating: $79 million
• Sewer and Water Capital: $30 million
• Water Main Replacements: $114 million
• Lake Michigan Water Project: $53 million
Mayor Terry D’Arcy thanked city staff for their hard work and dedication in preparing the budget and spoke about the need for Joliet to invest in its future. “We are the third-largest city, and for too long we have not operated like one. We need to invest in our city operations just as residents do in their homes and business owners do in their businesses,” stated D’Arcy. “By deferring investments, it will only cost the city more money in the long run and lower our quality of life. The return on this future investment will be to provide the services our residents expect and deserve.”
Illinois’ Public Pension Crisis: Near-Record $144 Billion Funding Gap
Despite a strong stock market and increased state contributions, Illinois’ government-worker pension funds remain stuck in a near-record $143.7 billion funding deficit. This financial shortfall, as of June 2024, represents a $1.5 billion increase from the previous year and is just $500 million shy of the 2021 peak, according to a recent report by the Commission on Government Forecasting & Accountability (COGFA).
The combined unfunded liability spans five major retirement systems covering school teachers, university employees, state workers, legislators, and judges. Most of the deficit resides within the Illinois Teachers Retirement System, which serves grade and high school teachers outside of Chicago. Despite solid market returns and a doubling of annual state contributions since 2012—now reaching $11 billion—the funding gap persists.
Encouragingly, the pension funds’ “funded ratio”—the proportion of assets relative to liabilities—has improved. As of the last fiscal year, the funded ratio reached 46%, the second-highest level in 15 years, up from a low of 37.6% in 2016. However, experts argue that a healthy funded ratio should be at least 90%.
Some officials see the rising funded ratio as evidence that the state’s 50-year pension funding plan, known as the “Edgar Ramp” after former Gov. Jim Edgar, is yielding results. Illinois Senate President Don Harmon recently suggested that the state is nearing a “tipping point” where unfunded liabilities will start to decline. According to COGFA’s projections, the unfunded liability will peak at $145 billion in 2026 as state contributions continue to rise.
“The funds appear to be treading water,” said Paul Vallas, former head of COGFA’s predecessor agency. “If lawmakers refrain from expanding benefits or making changes to Tier Two, the system will gradually stabilize.”
However, pending legislation could threaten this fragile progress. A union-backed proposal aims to address a compliance issue within the Tier Two pension plan, which applies to workers hired after January 1, 2011. While Tier Two was designed to be less costly than its predecessor, it risks violating federal requirements to offer benefits equivalent to Social Security.
Governor J.B. Pritzker supports a less expensive version of the fix, but even this conservative approach could increase liabilities and delay the anticipated stabilization of pension finances. “Total cost figures are not fully available, but any adjustment will push back the timeline for financial recovery,” noted state Sen. Rob Martwick, a key figure in pension legislation.
John Filan, former Illinois chief financial officer, highlights that rising liabilities are driven by factors such as pay increases, enhanced benefits, and lower investment return assumptions. From 2013 to 2022, the total funding target for pension liabilities grew from $248 billion to $328 billion and is now nearing $400 billion, primarily due to local school districts’ pay raises that affect state-funded pensions.
Vallas warns that Illinois’ pension debt remains significantly higher than that of neighboring states, siphoning funds from other critical programs and perpetuating high tax burdens. “This financial strain cements Illinois’ status as the highest-taxed state in the nation, damaging the business climate and driving out working families,” he said.
While Illinois’ pension funds show signs of stabilization, the road to financial health remains fraught with challenges. Legislative decisions in the coming years will play a critical role in determining whether the state can finally reverse decades of pension debt accumulation or fall further into financial distress.
Governor Pritzker Appoints Gia Biagi to Lead Illinois Department of Transportation
Governor JB Pritzker announced the appointment of Gia Biagi, former Chicago Department of Transportation (CDOT) commissioner, as the new secretary of the Illinois Department of Transportation (IDOT). Biagi will replace Omer Osman, who is retiring after serving as IDOT’s head since 2019. Her appointment is pending state Senate approval.
Biagi brings extensive leadership experience to IDOT. She served as CDOT commissioner under former Chicago Mayor Lori Lightfoot, starting in December 2019. During her tenure, she oversaw:
- Over 4,000 miles of streets.
- More than 400 miles of bike lanes and trails.
- The city’s streetlights, bridges, intersections, and transportation partnerships, including the Divvy bike-share system and e-scooter programs.
Under Biagi’s leadership, CDOT focused on improving walking and cycling conditions near mass transit. She implemented policies to expand bike lanes and trails by 100 additional miles, launched a program to give away 5,000 bikes by 2026, and expanded the Divvy bike-share program to all city wards. The City Council also approved a pilot program during her term to ticket vehicles parked in bike or bus lanes and other restricted areas using cameras.
While Biagi’s tenure saw significant developments, critics argued that her agency did not do enough to protect and promote walking and cycling. She left CDOT in summer 2023, shortly after Mayor Brandon Johnson took office.
Prior to her role at CDOT, Biagi worked on urban design, planning, and strategy at architecture firm Studio Gang and served with the Chicago Park District.
Osman’s career at IDOT began in 1989, where he worked as a civil engineer before transitioning to leadership roles. During his tenure, he oversaw major infrastructure projects, including:
- The modernization of Interstate 80 south of Chicago.
- The Interstate-57/74 interchange reconstruction in the Champaign-Urbana area.
- Capacity improvements to I-57 in southern Illinois.
Osman also played a key role in implementing the $45 billion Rebuild Illinois infrastructure bill, which funded road construction and capital improvements across the state. He championed diversity within IDOT, advocating for minority- and women-owned businesses.
Pritzker praised Biagi’s qualifications, stating, “Her expansive portfolio and unique leadership experience will undoubtedly propel IDOT’s mission forward and strengthen Illinois’ infrastructure efforts.” Biagi will serve as acting secretary until the Senate confirms her appointment. Details about her salary have not yet been disclosed.
As Biagi steps into her new role, she inherits the challenges and opportunities of leading IDOT, including continuing the progress of Rebuild Illinois and addressing the state’s transportation infrastructure needs.
Governor Pritzker Signs Executive Order to Expand Affordable Housing
Governor JB Pritzker signed an executive order aimed at addressing Illinois’ affordable housing crisis. While the Democratic governor refrained from mentioning President-elect Donald Trump by name, his actions seemed to respond to frustrations voiced by voters over economic challenges and the scarcity of affordable housing options.
“It’s a problem that takes many forms, has many causes, and it requires comprehensive solutions,” Pritzker said during a press briefing before the signing. “Illinois needs to quickly and dramatically ramp up our efforts to approve and build new housing and to give more affordable options to working families.”
The executive order establishes a new Illinois director of housing solutions. This role will focus on increasing housing availability by coordinating efforts with the Illinois Housing Development Authority, the Illinois Department of Commerce and Economic Opportunity, and other state agencies.
The lack of affordable housing has emerged as a pressing issue nationwide. Governor Pritzker emphasized that the problem affects every corner of Illinois, not just urban centers like Chicago. With this executive order, Governor Pritzker aims to accelerate efforts to build and approve affordable housing projects, ensuring that more Illinois families have access to suitable and affordable living options. This initiative underscores his administration’s commitment to addressing one of the state’s most pressing economic and social challenges.
Illinois Celebrates Progress on Brandon Road Interbasin Project Construction
The Brandon Road Interbasin Project near Joliet reached a significant milestone with the awarding of its first construction contract by the U.S. Army Corps of Engineers, Rock Island District, on November 27. The $15.5 million contract was granted to Miami Marine Services for site preparation and riverbed rock removal for the engineered channel. Miami Marine will collaborate with Michels Construction of Milwaukee, Wisconsin, to complete the work.
The Brandon Road Interbasin Project is a federal initiative aimed at preventing invasive carp from entering the Great Lakes. Illinois and Michigan are serving as the non-federal sponsors of the project, which is estimated to cost $1.15 billion. This initial contract marks the first of three construction phases for the project.
Governor JB Pritzker emphasized the significance of this development, stating, “Awarding the first construction contract is an exciting and important step forward for this long-anticipated project. The Great Lakes are a priceless natural resource and a vital economic engine for the nation. Protecting them for future generations will always be a priority for the State of Illinois.”
A key milestone for the project occurred on July 1 when Illinois signed a project partnership agreement with the U.S. Army Corps of Engineers and the State of Michigan. This agreement secures $274 million in federal funding and $114 million in state contributions from Illinois and Michigan.
The Brandon Road Lock and Dam has been identified as a critical pinch point where layered technologies can be deployed to prevent the upstream movement of invasive carp and other aquatic nuisance species. The project will implement advanced deterrent systems at the lock and dam site on the Illinois Waterway, ensuring comprehensive protection for the Great Lakes.
Experts from the Illinois Department of Natural Resources (IDNR) have collaborated closely with the U.S. Army Corps of Engineers throughout the preconstruction, engineering, and design phases, which began in December 2020. These efforts have been instrumental in shaping the project’s innovative solutions.
In conjunction with the Brandon Road project, design efforts have commenced for proposed capital and operational improvements at the Jake Wolf Memorial Fish Hatchery in Mason County. These improvements aim to balance the aquatic impacts of the project on the Des Plaines River, as required by the initiation of construction.
Anti-Sexual Harassment Training
All Illinois employers must provide sexual harassment prevention training by December 31, 2024 and annually thereafter. To help members that have not yet met this requirement, the Joliet Chamber along with Meghan Preston from Voorn, Jaworski, & Preston, PLLC., invite all to access and share this video training with their employees.
- Under the Illinois Human Rights Act, Illinois employers must complete the training by December 31, 2024
- Employers who do not comply could be fined civil penalties based on the size of the employer
- Registration is complimentary as a benefit of membership.
Please check your registration confirmation email for video link information.
This overview video is hosted on the Chamber YouTube page. A link will also be provided to access the State of Illinois Sexual Harassment Prevention Training slides to review with employees. At the end of the document, a Certificate of Participation is provided for your use.
Register at: https://members.jolietchamber.com/events/details/2024-annual-anti-sexual-harassment-training-7241
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
[email protected]
815.727.5371 main
815.727.5373 direct