GENERAL ASSEMBLY

Third Reading deadline for House bills. At the end of last week, the Illinois House of Representatives came to its “Third Reading deadline,” which represents the final date that a House bill can be debated on the House floor and passed over to the Senate. Failure of a bill to advance by the Third Reading deadline does not, however, necessarily mean that an issue is dead. Many bills have come over from the Senate to the House, and some of these bills represent issues and language similar to bills held up in the House. Other pieces of House bill language could be drafted as amendments to Senate bills.

As of Friday’s Third Reading deadline, a total of 324 House bills had been passed. Of that total, 291 were Democrat-sponsored bills and 33 were Republican-sponsored bills (10.2%). The supermajority Democrats continued to put a brick on good Republican bills, such as Leader McCombie’s HB 4855, which would require the Illinois Department of Financial and Professional Regulation (IDFPR) to accept electronic (credit card) payments from licensed professionals throughout the state. This bipartisan legislation is a response to repeated licensure delays and the failure of IDFPR to meet deadlines to procure and implement a new licensing system.

Instead of giving consideration to Republican bills that address important concerns, Democrats wasted time on frivolous legislation such as HB 4446, a kangaroo ban, and HB 5433, a “lawns to legumes” grant program. House Minority Leader Tony McCombie debated a bill in the Illinois House that would ban kangaroos and exotic cats. McCombie brought to light the lack of seriousness in this initiative, considering the serious challenges facing the State of Illinois and its taxpayers.

Some of the most important issues to be dealt with by the General Assembly this year have not yet come up for debate at all; they are expected to move in large omnibus bills that will pop out at the end of session in May. Adjournment has been set for Friday, May 24.

BUDGET 

CGFA publishes its three-year budget forecast.  As part of its overall duties, the Commission on Government Forecasting and Accountability (CGFA), the budget-forecasting arm of the Illinois General Assembly, has been asked to generate a three-year budget forecast for Illinois. With the assistance of private partners with expertise in economic trend analysis, CGFA recently published its three-year budget forecast to cover fiscal years 2025, 2026, and 2027 (FY25-FY27).

The CGFA three-year budget forecast and scenarios largely extrapolate, going forward, various economic activity and revenue trends already familiar to Illinois lawmakers. Broken down into individual line items, the CGFA forecasters see several revenue lines operating with much more health and strength than others. From the completed FY23 until FY27, Illinois personal income tax revenues are seen as likely to increase by more than $4.2 billion, from $27.9 billion in FY23 to a projected $32.1 billion in FY27. This reflects continued pay increases for Illinois workers, minimal growth in Illinois employment, and some additional positive change reflecting the continued transfer of business income from “corporate income” to pass-through personal income. 

CGFA shared three budget projection scenarios for the FY25-FY27 three-year period. Unfortunately, all of these scenarios show significant and growing State deficit spending, beginning in FY25, using the Governor’s proposed spending levels and programs. Arguably, the most realistic scenario offered by CGFA is Scenario #3. This Scenario #3 bases spending at the now-established 20-year average State spending growth rate of 4%. This projection sees the State’s general funds deficit growing to $6.581 billion in FY27. Below is a summary of the scenarios CGFA provided:

Scenario 1: Keep Accounts Payable at FY 2023 Level (in millions) – .2% Growth

• FY25 Deficit – ($455)
• FY26 Deficit – ($1,600)
• FY27 Deficit – ($484)

Scenario 2: Maintain Accounts Payable at $3 Billion (in millions), 30 Day Payment Cycle -1.8% Growth

• FY25 Deficit – ($455)
• FY26 Deficit – ($1,893)
• FY27 Deficit – ($3,000)

Scenario 3: Payment Cycle Continues to Grow – 20-Year Average Growth in Spending (in millions) – 4.0% Growth

• FY25 Deficit – ($455)
• FY26 Deficit – ($3,064)
• FY27 Deficit – ($6,581)

CGFA closes their projections with a cautionary statement, warning that “looking into FY2025 and beyond, economic and tax revenue forecasts remain murky as the economy is expected to continue to slow. The State needs to continue to show fiscal discipline and demonstrate that the results of the past few years are not an anomaly.”

INSURANCE

Insurance Reform Measure Passes House; House Republicans Ensure No Enhancements for Undocumented Immigrants. During last week’s legislative session, the House passed the Healthcare Protection Act (HPA), a complex bill to reform insurance. The measure removes prior authorization for crisis mental healthcare and bans step therapy, which is when an insurance company requires a patient to try and fail alternative medications before covering medications recommended by their doctor. House Republicans were integral in negotiating the measure, and the resulting roll call was bipartisan. 

Deputy Leader Ryan Spain took the lead questioning the bill, HB 5395, and confirming in his line of questioning that it would not include any enhancements for undocumented immigrants. The bill will now move to the Senate, where it will proceed through the Insurance Committee for further review.

These sections of the bill are good:

• Banning step therapy so insurance companies can no longer require a patient to fail different types of treatment before approving the use of treatment prescribed a doctor.
• Bans prior authorization for inpatient mental health services and substance abuse treatment.
• Updates the utilization management process by requiring the use of generally accepted standards of care when determining coverage of doctor-recommended treatment.
• Improved transparency by requiring insurance companies to publicly post any medication that may need prior authorization.
• Requires insurance companies to participate in audits of their networks and requires providers to inform insurance networks when they no longer accept new patients.

*We will be tracking this bill closely in the Senate to ensure it does not get amended to directly or indirectly increase benefits for healthcare programs for noncitizens.

JOBS 

Illinois’ unemployment rate was unchanged in March. The March unemployment rate was 4.8%, which was unchanged from the revised rate posted in February 2024. The Prairie State created an estimated 12,700 new jobs in March; however, Illinois continued to have higher joblessness than the nation as a whole. In March, the national U.S. unemployment rate was 3.8%, 100 basis points lower than Illinois.

Illinois net job growth for March 2024 continued to be concentrated in public-sector-related and leisure-oriented services. Positive job-creation numbers by sector included 3,300 net new jobs in government, 2,900 net new jobs in leisure and hospitality, and 2,200 net new jobs in private education and health services. By contrast, the key sectors of construction and manufacturing created only 800 net new jobs each.