Illinois lawmakers say they’ll work to invest more in middle-income housing, child care, site-readiness, worker retention and education. But they warned Quad Cities Chamber leaders that a $3.2 billion state budget hole means there will be tough choices ahead.
QC lawmakers know what they’re up against, State Sen. Mike Halpin, D-Rock Island, said Friday, Jan. 24, during the chamber’s Illinois Legislative Kickoff Forum at Bally’s Quad Cities.
“As you’ll hear, it’s going to be a more difficult year in terms of budget-making but we’re ready for the challenge – looking forward to it so we can get to a place where we the state can keep moving forward,” Mr. Halpin added.
“We know there’s a big hole,” State Rep. Dan Swanson, R-Alpha, said of a deficit that GOP leaders estimate at $3.5 billion; some $300 million higher than the figure from Gov. JB Pritzker’s office.
“We know that the Chicago Transit Authority is looking for a lot of money, and I just read today the Chicago teachers union may go on strike between now and March, at least they’re lining their chips up to do that,” he added. That will put even more pressure on Mr. Pritzker as he presents the 2026 budget on Feb. 19, he said.
State Rep. Neil Anderson, R-Andalusia, added that Republicans have been warning “that this is going to happen, and here we are. … It’s going to take some intestinal fortitude from both sides of the aisle to make some cuts because that’s the only way we’re going to balance the budget this year.”
State Rep. Gregg Johnson, D-East Moline, also predicted, “There are going to be some winners and losers, and that’s sad. No doubt, it’s going to be a different year.”
Keep housing on the table
The QC chamber is aware of the financial challenges, Ryan Sempf, the chamber’s executive director of government affairs, said. He asked Illinois QC lawmakers how chamber members can keep priorities such as early child care and education from falling “off the table during that conversation about the budget.”
The senator told local leaders, “This year it’s going to be incredibly important for anyone that relies on state funding to make sure you’re advocating in Springfield for those programs, showing that return on investment or showing the benefits of the program and that those dollars are well spent because it is going to be difficult to make everybody happy this year.”
Mr. Sempf called housing one of the chamber’s two biggest Illinois QC priorities and said the organization was pleased to see a report by the governor’s office regarding the need for more investment in middle-income housing.
Mr. Halpin said that reports show the governor is aware that housing is important and that the need is significant. He said, for example, in this region alone 6,000 housing units or more are needed and there’s similar unmet demand elsewhere in Illinois.
To address the problem, last year Mr. Halpin sponsored a bill to provide a tax credit for middle-income units. He said he will reintroduce it this year.
“What I think that will do and what I’ve advocated for in the past, is when you create those opportunities for middle income households, families that move into those units are going to free up other housing that might be older, and might not have that new house smell on it,” he said. That investment then “flows down to other opportunities” for people who are looking to stop renting and buy an existing home in which to raise a family.
Action comes at a price
That new investment will come at a cost, Mr. Halpin acknowledged. “But we will continue to try to demonstrate that these tax credits when they’re spent actually return value to state and local governments when those units are developed and inhabited. It’s an investment in our future like any other of a number of things we do in the State of Illinois when it comes to education. We’re going to get that back tenfold, and we need to make it a priority.”
Mr. Swanson said the housing shortage is not only here but “Macomb, Galesburg, Monmouth and in between.” It’s also important to address it now because when businesses are looking to expand, “they look at housing problems and housing issues in our communities, and there is a big problem,” he said.
Housing funding is critical, too, so Illinois can “become competitive with the other side of the river,” Mr. Swanson added. He urged anyone trying to secure housing grants to contact local lawmakers for help. “We can put our letters on those to help bring attention to the governors’ office,” he said.
State Sen. Neil Anderson, R-Andalusia, added that the bi-state housing disparity goes deeper than funding alone. When developers compare investing in Rock Island County to Scott County, he said, “it’s a regulation problem; it’s a taxation problem; construction companies are going to build houses where they can and there is a reason that there is more over there than there is over here.”
The lack of housing is not because people don’t want to live in Illinois, lawmakers agreed. “I know a lot of people who want to move from Iowa to Illinois but the housing just isn’t available,” Mr. Johnson added. “Growth shouldn’t just happen in places like Peoria and Rockford and the Chicagoland area.”
Education a priority
Another Illinois QC priority for the chamber is education and education funding. Mr. Halpin is in a position to impact both as the new chair of the Illinois Senate Appropriations Education Committee. In addition to K-12 and higher-ed funding, Mr. Halpin said that committee also hopes to play a role in developing the state’s new Department of Early Childhood.
Other issues on the panel’s plate will be a proposed higher education evidence-based funding formula similar to the one the Illinois General Assembly put in place in 2017 for K-12 schools. That new formula would replace the flat-level funding that provides a one-size-fits-all percentage increase across districts regardless of enrollment and educational costs that do not take into account such things as the income of the student body.
Changing that, Mr. Halpin said, is “particularly important in this area because Western Illinois University does have a very good share of those underrepresented students, which costs them more to educate. Some need additional non-education support that costs resources and they would stand to benefit from a formula that takes all of these things into account.”
Lawmakers are working on a bill, he said, but “it’s not quite there yet.”
Mr. Halpin also warned that the change will be “somewhat expensive at $135 million per year” and it’s likely to increase. “That’s going to be another budget pressure as we go through this fiscal year,” he said. “I think there’s a whole lot of promise to it and I’m looking forward to additional negotiations to try to get to a place where we can get it passed.”
Until then, he said, he will continue working on legislation to help make sure WIU can “recover from some difficult decisions they had to make over the past year or so.”
Tier 2 pension reform
Amid the current budget crisis, freshmen State Rep. Li Arellano, R-Dixon, also warned that there will be a “huge discussion” this session about the state’s Tier 2 pensions. That new pension tier was created in 2011 to help the state reduce future pension costs in order to begin attacking its worst-in-the-nation pension funding crisis. The reform removed the Tier 1 pension’s annual cost of living, raised the state’s retirement age from 62 to 67, changed pension eligibility from five years to 10 years of service and capped the maximum salary on which a pension is based to stop spiking pensions through last-minute promotions. Opponents say that the changes are unfair because current employees and Tier 2 pension recipients are subsidizing the richer retirement benefits for their Tier 1 counterparts.
Mr. Arellano, the former mayor of Dixon, Illinois, warned that “some of the price tags for that are just mammoth” and they will impact the state budget along with the budgets of some local governments.
The change also may be hard for some non-government pensioners to swallow, he added. “Some of those folks are already having a way better retirement than the average citizen of Dixon or the Quad Cities,” he said of Tier 2 pensioners. “We can’t afford that right now. We shouldn’t even be having that discussion.”
