97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SENATE JOINT RESOLUTION CONSTITUTIONAL AMENDMENT
SC0025

 

Introduced 3/2/2011, by Sen. Matt Murphy - Dale A. Righter

 

SYNOPSIS AS INTRODUCED:
 
    Proposes to add a Pension Funding and Fairness Article to the Illinois Constitution. Provides that the maximum annual percentage change in State fiscal year spending may not exceed the inflation adjustment factor plus the population adjustment factor. Provides that, in order to adopt an increase in State spending beyond that limit or an increase in State revenue, the measure must be approved by a three-fifths supermajority vote of each chamber of the General Assembly and must be approved by a majority of voters. Provides for the imposition of an emergency tax. Establishes the Past Due Paydown Fund, into which the Comptroller shall transfer any amount necessary up to the total past due operating debt owed by the State, and provides that the General Assembly may authorize transfers, appropriations, and allocations from the fund to fund only the costs of paying down the remaining past due debt. Requires any remaining funds to be transferred into the State Budget Stabilization Fund. Establishes the State Budget Stabilization Fund to fund the costs of State government up to the expenditure limit in years when State revenues are less than the amount necessary to finance expenditures. Limits the fund from exceeding 8% of the total General Fund revenues received in the immediately preceding fiscal year, and requires the transfer of any excess into the Taxpayer Relief Fund. Establishes the Taxpayer Relief Fund, and provides that, if the amount in that fund exceeds 1% of General Fund expenditures, then the General Assembly shall enact legislation to provide for the refund to taxpayers of amounts in the fund. Contains provisions concerning annual pension payments. Effective upon being declared adopted in accordance with Section 7 of the Illinois Constitutional Amendment Act.


LRB097 07767 JDS 47879 e

 

SC0025LRB097 07767 JDS 47879 e

1
SENATE JOINT RESOLUTION
2
CONSTITUTIONAL AMENDMENT

 
3    RESOLVED, BY THE SENATE OF THE NINETY-SEVENTH GENERAL
4ASSEMBLY OF THE STATE OF ILLINOIS, THE HOUSE OF REPRESENTATIVES
5CONCURRING HEREIN, that there shall be submitted to the
6electors of the State for adoption or rejection at the general
7election next occurring at least 6 months after the adoption of
8this resolution a proposition to add Article XIII 1/2 of the
9Illinois Constitution as follows:
 
 
10    (ILCON Art. XIII 1/2 heading new)
11
ARTICLE XIII 1/2
12
PENSION FUNDING AND FAIRNESS

13    (ILCON Art. XIII 1/2, Sec. 1 new)
14SECTION 1. DEFINITIONS
15    As used in this Article:
16    "Emergency" means extraordinary circumstances outside the
17control of the General Assembly, including catastrophic
18events, such as a natural disaster, terrorism, fire, war, and
19riot, as well as court orders or decrees.
20    "General Fund" means the General Revenue Fund, Common
21School Fund, and Education Assistance Fund.
22    "Increase in State revenue" means any net gain in State
23revenue of at least 0.01% of General Fund revenue in at least

 

 

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1one fiscal year that results from (1) enacting a new tax or
2fee; (2) increasing the rate or expanding the base of an
3existing tax or fee; (3) repealing or reducing a tax exemption,
4credit, or refund; or (4) extending an expiring tax increase or
5fee.
6    "Inflation adjustment factor" means the annual percentage
7increase in the Chicago Metropolitan Statistical Area Consumer
8Price Index for the most recently available calendar year as
9calculated by the United States Department of Labor, Bureau of
10Labor Statistics. The inflation adjustment factor may not be
11less than zero or more than 10%.
12    "Monthly pro rata pension payment" means the average
13monthly pension payment calculated by dividing the total fiscal
14year annual pension payment by 12 months.
15    "Pension payment" means the total annual required pension
16payment for each fiscal year as defined by the Commission on
17Government Forecasting and Accountability following generally
18accepted accounting principles.
19    "Population adjustment factor" means the average annual
20percentage increase in population for the 3 most recent years
21for which data is available, as determined annually by the
22United States Department of Commerce, Census Bureau. The
23population adjustment factor may not be less than zero.
24    "Revenue" means taxes and fees collected by the State.
25    "State spending" means any authorized State appropriations
26and allocations.

 

 

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1    "Tax" means any amount raised for the general support of
2government functions.
 
3    (ILCON Art. XIII 1/2, Sec. 2 new)
4SECTION 2. SPENDING GROWTH INDEX
5    (a) Beginning with the fiscal year that starts after
6Article XII 1/2 takes effect, the maximum annual percentage
7change in State fiscal year spending in the categories
8specified may not exceed the inflation adjustment factor plus
9the population adjustment factor. This limitation, the
10Spending Growth Index, must be calculated separately for the
11following categories: General Fund; Road Fund; and all other
12funds.
13    (b) The following may not be counted in calculating
14expenditure limitations or, if applicable, revenue
15limitations:
16        (1) Amounts returned to taxpayers as refunds of amounts
17    exceeding the expenditure limitation in a prior year.
18        (2) Amounts received from the federal government.
19        (3) Amounts collected on behalf of another level of
20    government.
21        (4) Pension contributions by employees and pension
22    fund earnings.
23        (5) Pension and disability payments made to former
24    government employees.
25        (6) Amounts received as grants, gifts, or donations

 

 

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1    that must be spent for purposes specified by the donor.
2        (7) Amounts paid pursuant to a court award.
3        (8) Reserve transfers.
 
4    (ILCON Art. XIII 1/2, Sec. 3 new)
5SECTION 3. APPROVAL OF EXPENDITURE INCREASES
6    (a) In order to adopt an increase in State spending beyond
7the limitation set forth in Section 2 of this Article, the
8measure must be approved by a three-fifths supermajority vote
9of all members of each house of the General Assembly and must
10be approved by a majority of voters. Voter approval is not
11required if the spending is as a result of an increase in State
12revenue under Section 4 of this Article.
13    (b) The question of whether to adopt legislation to allow
14an increase in State spending beyond the limitation set forth
15in Section 2 of this Article must be submitted to the voters
16for approval at the next general election. If the General
17Assembly determines by a three-fifths supermajority vote that
18legislation to increase spending beyond the limitation should
19take effect sooner than the next general election, the General
20Assembly may provide for submission of the question to the
21voters at any regular or special election.
22    A measure submitted to the voters must include an estimate
23as set forth in the legislation of the spending increase
24resulting from the measure for the first 3 fiscal years of its
25implementation.

 

 

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1    (c) At least 30 days before an election at which voter
2approval of an increase in State spending is sought, the
3Secretary of State shall mail, at least once, a titled notice
4or set of notices addressed to all registered voters in the
5State at each address of every registered voter. Notices must
6include all of the following information and may not include
7any additional information:
8        (1) The election date, hours, ballot title, and text.
9        (2) For each proposed spending increase, the estimated
10    or actual total of fiscal year spending for the current
11    year and each of the past 4 years, and the overall
12    percentage and dollar change.
13        (3) For the first full fiscal year of each proposed
14    spending increase, estimates of the maximum dollar amount
15    of each increase and of fiscal year spending without the
16    increase.
17    (d) Ballot questions for spending increases must begin:
18"Shall State spending increase by (amount of first or, if
19phased in, full fiscal year dollar increase) annually for the
20purpose of . . .?".
21    (e) The State shall reimburse municipalities and counties
22for the costs of a special election.
 
23    (ILCON Art. XIII 1/2, Sec. 4 new)
24SECTION 4. APPROVAL OF REVENUE INCREASES
25    (a) In order to adopt an increase in State revenue, the

 

 

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1measure must be approved by a three-fifths supermajority vote
2of all members of each house of the General Assembly and must
3be approved by a majority of voters. Voter approval is not
4required if annual State revenue is less than annual payments
5on general obligation bonds, required payments relating to
6pensions, and final court judgments or if the measure is an
7emergency tax.
8    (b) The question of whether to adopt legislation to impose
9an increase in revenue of the State must be submitted to the
10voters for approval at the next general election. If the
11General Assembly determines by a three-fifths supermajority
12vote that legislation to increase revenue via an emergency tax
13should take effect sooner than the next general election, the
14General Assembly may provide for submission of the question to
15the voters at any regular or special election.
16    A measure submitted to the voters must include an estimate
17of the amount to be raised by the measure for the first 3
18fiscal years of its implementation.
19    (c) At least 30 days before an election at which voter
20approval of a revenue increase is sought, the Secretary of
21State shall mail, at least once, a titled notice or set of
22notices addressed to all registered voters at each address of
23every registered voter. Notices must include all of the
24following information and may not include any additional
25information:
26        (1) The election date, hours, ballot title, and text.

 

 

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1        (2) For each proposed revenue increase, the estimated
2    or actual total of fiscal year spending for the current
3    year and each of the past 4 years, and the overall
4    percentage and dollar change.
5        (3) For the first full fiscal year of each proposed
6    revenue increase, estimates of the maximum dollar amount of
7    each increase and of fiscal year spending without the
8    increase.
9    (d) Ballot questions for revenue increases must begin:
10"Shall (description of the tax increase) to increase State
11revenues by (amount of first or, if phased in, full fiscal year
12dollar increase) annually for the purpose of . . .?".
13    (e) The State shall reimburse municipalities and counties
14for the costs of a special election.
 
15    (ILCON Art. XIII 1/2, Sec. 5 new)
16SECTION 5. EMERGENCY TAXES
17    (a) The State may impose emergency taxes only in accordance
18with this Section.
19    (b) The tax must be approved for a specified time period by
20a three-fifths majority of the members of each house of the
21General Assembly.
22    (c) Emergency tax revenue may be spent only after other
23available reserves are depleted and must be refunded 180 days
24after the emergency ends if not spent on the emergency.
25    (d) The tax must be submitted for approval by the voters at

 

 

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1the next regular election.
2    (e) If not approved by the voters as provided in subsection
3(d), the emergency tax expires 30 days following the election.
4    (f) The provisions of this Section apply notwithstanding
5Article IX.
 
6    (ILCON Art. XIII 1/2, Sec. 6 new)
7SECTION 6. PAST DUE PAYDOWN FUND
8    (a) The Past Due Paydown Fund is established and must be
9administered for the purposes identified in this Section. At
10the close of the lapse period of each fiscal year, the State
11Comptroller shall identify the amount of General Fund
12unappropriated surplus above the Spending Growth Index
13limitation and transfer to the fund any amount necessary up to
14the total past due operating debt owed by the State as of the
15close of that fiscal year.
16    (b) The General Assembly may authorize transfers,
17appropriations, and allocations from the fund only to fund the
18costs of paying down the remaining past due debt until such
19debt is zero. Any remaining funds shall be transferred to the
20State Budget Stabilization Fund.
 
21    (ILCON Art. XIII 1/2, Sec. 7 new)
22SECTION 7. STATE BUDGET STABILIZATION FUND
23    (a) The State Budget Stabilization Fund is established and
24must be administered for the purposes identified in this

 

 

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1Section. At the close of the lapse period of each fiscal year,
2the State Comptroller shall identify the amount of General Fund
3unappropriated surplus above the State Spending Growth Index
4expenditure limitation and above the amount necessary to fully
5fund and pay down the past due operating debt to zero. The fund
6may not exceed 8% of the total General Fund revenues received
7in the immediately preceding fiscal year.
8    (b) The General Assembly may authorize transfers,
9appropriations, and allocations from the fund to fund only the
10costs of State government up to the expenditure limit
11calculated under Section 2 in years when State revenues are
12less than the amount necessary to finance the level of
13expenditures permitted under Section 2. Transfers require a
14three-fifths supermajority vote of the General Assembly.
15    (c) The money in the fund may be invested as provided by
16law, with the earnings credited to the fund. At the close of
17every month during which the fund is at the 8% limitation, the
18State Comptroller shall transfer the excess to the Taxpayer
19Relief Fund.
 
20    (ILCON Art. XIII 1/2, Sec. 8 new)
21SECTION 8. TAXPAYER RELIEF FUND
22    (a) The Taxpayer Relief Fund is established and must be
23administered for the purposes identified in this Section. At
24the close of the lapse period of each fiscal year, the State
25Comptroller shall identify the amount of the General Fund

 

 

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1unappropriated surplus above the State expenditure limitation
2and above the amount necessary to fully fund the Past Due
3Paydown Fund and the Budget Stabilization Fund.
4    (b) By August 1st annually, the State Comptroller shall
5notify the Commission on Government Forecasting and
6Accountability and the Department of Revenue of the amount in
7the fund as a result of the transfers.
8    (c) If the amount in the fund exceeds 1% of General Fund
9expenditures, then the General Assembly shall, by November
1015th, enact legislation to provide for the refund to taxpayers
11of amounts in the fund. Refunds may take the form only of
12temporary or permanent broad-based tax rate reductions.
13    (d) If the General Assembly does not enact legislation by
14November 15th to provide refunds, then the State Comptroller
15shall, by November 30th, notify the Department of Revenue of
16the amount in the fund. The Department of Revenue shall
17calculate a one-time bonus personal exemption refund. The
18amount of the personal exemption refund must be calculated by
19dividing the amount in the fund identified by the State
20Comptroller by the number of personal exemptions claimed on
21income tax returns filed for the tax year beginning in the
22previous calendar year. The Department of Revenue shall issue a
23refund by December 30th to a taxpayer who filed an income tax
24return by April 15th of the same calendar year based on the
25number of exemptions claimed (times refund per exemption) on
26the taxpayer's return without regard to the taxpayer's tax

 

 

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1liability for the year.
 
2    (ILCON Art. XIII 1/2, Sec. 9 new)
3SECTION 9. PENSION PAYMENTS
4    (a) Notwithstanding any other law, beginning with fiscal
5year following the adoption of this Article and for each budget
6year thereafter, the General Assembly's first appropriation
7each year must be directed to make the full annual pension
8payment defined by the Commission on Government Forecasting and
9Accountability, acting in compliance with generally accepted
10accounting principles. This appropriation must be made first,
11and executing it (making the actual payments required by it)
12shall take precedence over any other appropriation or
13expenditure.
14    Exceptions may be made to the pension payment requirement
15in this subsection (a) if authorized by a law approved by a
16three-fifths vote of each chamber of the General Assembly and
17approved by the Governor. Any exceptions made by the General
18Assembly shall specify the dollar amount and purposes of
19appropriations that shall be made prior to the pension payment.
20    (b) By March 1 of each year, the State Comptroller shall
21take the total annually required pension payment for the
22upcoming fiscal year (beginning on July 1) and divide that
23number by 12. This amount becomes the monthly pro rata pension
24payment for each month of the upcoming fiscal year.
25    If, during the fiscal year, the Commission on Government

 

 

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1Forecasting and Accountability adjusts the annually required
2pension payment for the current year upward, the State
3Comptroller shall recalculate the monthly pro rata pension
4payment upward accordingly and allocate the increase evenly
5over the remaining months to ensure that the full annual
6pension payment is made for the fiscal year.
7    If, during the fiscal year, the Commission on Government
8Forecasting and Accountability adjusts the annually required
9pension payment downward, the original payment schedule shall
10be maintained. Payments in excess of the revised payment
11schedule shall be allocated to any existing unfunded pension
12liability.
13    If, during the fiscal year, the Commission on Government
14Forecasting and Accountability adjusts the annually required
15pension payment downward, and if there is no remaining unfunded
16pension liability as calculated by the Commission on Government
17Forecasting and Accountability in compliance with generally
18accepted accounting principles, then the State Comptroller
19shall recalculate the monthly pro rata pension payment downward
20accordingly and allocate the reduction evenly over the
21remaining months to ensure that the full annual pension payment
22is made for the fiscal year.
23    By no later than the 5th of each month, the Comptroller
24shall disburse funds as authorized by the pension payment
25appropriation to the various State retirement systems so that
26the total payment equals the monthly pro rata pension payment.

 

 

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1The payments shall be allocated proportionally to each
2retirement fund as calculated by the Commission on Government
3Forecasting and Accountability.
4    There shall be no exceptions to this subsection (b) except
5as authorized by a law approved by a three-fifths vote of each
6chamber of the General Assembly and approved by the Governor.
7    (c) If for any reason the monthly pro rata pension payment
8is not made by the 5th of the month, or if for any reason the
9accumulated payments for the year do not equal the sum of the
10monthly pro rata pension payments for the months having passed
11during the fiscal year, then the State Comptroller shall cease
12all payments from State resources until such time as the
13pension payment is brought current for the year.
14    There shall be no exceptions to this subsection (c) except
15as authorized by a law approved by a three-fifths vote of each
16chamber of the legislature and approved by the Governor.
 
17
SCHEDULE
18    This Constitutional Amendment takes effect upon being
19declared adopted in accordance with Section 7 of the Illinois
20Constitutional Amendment Act.