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1 | AN ACT concerning government.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||||||||||||||||||||||||
5 | Pension Funding and Fairness Act. | ||||||||||||||||||||||||||||
6 | Section 5. Definitions. As used in this Act: | ||||||||||||||||||||||||||||
7 | "Emergency" means extraordinary circumstances outside the | ||||||||||||||||||||||||||||
8 | control of the General Assembly, including catastrophic | ||||||||||||||||||||||||||||
9 | events, such as a natural disaster, terrorism, fire, war, and | ||||||||||||||||||||||||||||
10 | riot, and court orders or decrees | ||||||||||||||||||||||||||||
11 | "General Fund" means the General Revenue Fund, Common | ||||||||||||||||||||||||||||
12 | School Fund, and Education Assistance Fund. | ||||||||||||||||||||||||||||
13 | "Increase in revenue" means any legislation or tax levy | ||||||||||||||||||||||||||||
14 | that is estimated to result in a net gain in State revenue of | ||||||||||||||||||||||||||||
15 | at least 0.01% of General Fund revenue in at least one fiscal | ||||||||||||||||||||||||||||
16 | year, and (i)
enacts a new tax or fee;
(ii) increases the rate | ||||||||||||||||||||||||||||
17 | or expands the base of an existing tax or fee;
(iii) repeals or | ||||||||||||||||||||||||||||
18 | reduces any tax exemption, credit, or refund; or
(iv) extends | ||||||||||||||||||||||||||||
19 | an expiring tax increase or fee. | ||||||||||||||||||||||||||||
20 | "Inflation adjustment factor" means the increase in the | ||||||||||||||||||||||||||||
21 | Chicago Metropolitan Statistical Area Consumer Price Index for | ||||||||||||||||||||||||||||
22 | the most recently available calendar year as calculated by the | ||||||||||||||||||||||||||||
23 | United States Department of Labor, Bureau of Labor Statistics. |
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1 | The inflation adjustment factor may not be less than zero or | ||||||
2 | more than 10%. | ||||||
3 | "Population adjustment factor" means the average annual | ||||||
4 | percentage increase in population for the 3 most recent years | ||||||
5 | for which data is available, as determined annually by the | ||||||
6 | United States Department of Commerce, Census Bureau. The | ||||||
7 | population adjustment factor may not be less than zero. | ||||||
8 | "Revenue" means taxes and fees collected by the State. | ||||||
9 | "State spending" means any authorized State appropriations | ||||||
10 | and allocations. | ||||||
11 | "Tax" means any amount raised for the general support of | ||||||
12 | government functions. | ||||||
13 | Section 10. Spending Growth Index. | ||||||
14 | (a) Beginning with the fiscal year that starts after this | ||||||
15 | Act takes effect, the maximum annual percentage change in State | ||||||
16 | fiscal year spending in the categories specified may not exceed | ||||||
17 | the inflation adjustment factor plus the population adjustment | ||||||
18 | factor and any increases attributable to measures approved | ||||||
19 | under Section 15. This limitation, the Spending Growth Index, | ||||||
20 | must be calculated separately for the following categories:
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21 | General Fund;
Road Fund; and
all other funds. | ||||||
22 | (b) The following may not be counted in calculating | ||||||
23 | expenditure limitations: | ||||||
24 | (1) Amounts returned to taxpayers as refunds of amounts | ||||||
25 | exceeding the expenditure limitation in a prior year. |
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1 | (2) Amounts received from the federal government. | ||||||
2 | (3) Amounts collected on behalf of another level of | ||||||
3 | government. | ||||||
4 | (4) Pension contributions by employees and pension | ||||||
5 | fund earnings. | ||||||
6 | (5) Pension and disability payments made to former | ||||||
7 | government employees. | ||||||
8 | (6) Amounts received as grants, gifts, or donations | ||||||
9 | that must be spent for purposes specified by the donor. | ||||||
10 | (7) Amounts paid pursuant to a court award. | ||||||
11 | (8) Reserve transfers. | ||||||
12 | Section 15. Approval of expenditure increases. | ||||||
13 | (a) In order to adopt an increase in State spending beyond | ||||||
14 | the limitation set forth in Section 10, the measure must be | ||||||
15 | approved by a three-fifths supermajority vote of all members of | ||||||
16 | each house of the General Assembly and must be approved by a | ||||||
17 | majority of voters.
Voter approval is not required if the | ||||||
18 | spending is as a result of an increase in State revenue under | ||||||
19 | Section 20. | ||||||
20 | (b) The question of whether to adopt legislation to allow | ||||||
21 | an increase in State spending beyond the limitation set forth | ||||||
22 | in Section 10 must be submitted to the voters for approval at | ||||||
23 | the next general election. If the General Assembly determines | ||||||
24 | by a three-fifths supermajority vote that legislation to | ||||||
25 | increase spending beyond the limitation should take effect |
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1 | sooner than the next general election, the General Assembly may | ||||||
2 | provide for submission of the question to the voters at any | ||||||
3 | regular or special election. | ||||||
4 | A measure submitted to the voters must include an estimate | ||||||
5 | as set forth in the legislation of the spending increase by the | ||||||
6 | measure for the first 3 fiscal years of its implementation. | ||||||
7 | (c) At least 30 days before an election, the Secretary of | ||||||
8 | State shall mail, at least once, a titled notice or set of | ||||||
9 | notices addressed to all registered voters in the State at each | ||||||
10 | address of every registered voter. Notices must include all of | ||||||
11 | the following information and may not include any additional | ||||||
12 | information: | ||||||
13 | (1) The election date, hours, ballot title, and text. | ||||||
14 | (2) For each proposed spending increase, the estimated | ||||||
15 | or actual total of fiscal year spending for the current | ||||||
16 | year and each of the past 4 years, and the overall | ||||||
17 | percentage and dollar change. | ||||||
18 | (3)
For the first full fiscal year of each proposed | ||||||
19 | spending increase, estimates of the maximum dollar amount | ||||||
20 | of each increase and of fiscal year spending without the | ||||||
21 | increase. | ||||||
22 | (d) Ballot questions for spending increases must begin: | ||||||
23 | "Shall State spending increase by (amount of first or, if | ||||||
24 | phased in, full fiscal year dollar increase) annually for the | ||||||
25 | purpose of . . .?". | ||||||
26 | (e) The State shall reimburse municipalities and counties |
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1 | for the costs of a special election. | ||||||
2 | Section 20. Approval of revenue increases. | ||||||
3 | (a) In order to adopt an increase in State revenue, the | ||||||
4 | measure must be approved by a three-fifths supermajority vote | ||||||
5 | of all members of each house of the General Assembly and
must | ||||||
6 | be approved by a majority of voters.
Voter approval is not | ||||||
7 | required if annual State revenue is less than annual payments | ||||||
8 | on general obligation bonds, required payments relating to | ||||||
9 | pensions, and final court judgments or the measure is an | ||||||
10 | emergency tax. | ||||||
11 | (b) The question of whether to adopt legislation to impose | ||||||
12 | an increase in revenue of the State must be submitted to the | ||||||
13 | voters for approval at the next general election. If the | ||||||
14 | General Assembly determines by a three-fifths supermajority | ||||||
15 | vote that legislation to increase revenue via an emergency tax | ||||||
16 | should take effect sooner than the next general election, the | ||||||
17 | General Assembly may provide for submission of the question to | ||||||
18 | the voters at any regular or special election. | ||||||
19 | A measure submitted to the voters must include an estimate | ||||||
20 | of the amount to be raised by the measure for the first 3 | ||||||
21 | fiscal years of its implementation. | ||||||
22 | (c) At least 30 days before an election, the Secretary of | ||||||
23 | State shall mail, at least once, a titled notice or set of | ||||||
24 | notices addressed to all registered voters at each address of | ||||||
25 | every registered voter. Notices must include all of the |
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1 | following information and may not include any additional | ||||||
2 | information: | ||||||
3 | (1) The election date, hours, ballot title, and text. | ||||||
4 | (2) For each proposed revenue increase, the estimated | ||||||
5 | or actual total of fiscal year spending for the current | ||||||
6 | year and each of the past 4 years, and the overall | ||||||
7 | percentage and dollar change. | ||||||
8 | (3) For the first full fiscal year of each proposed | ||||||
9 | revenue increase, estimates of the maximum dollar amount of | ||||||
10 | each increase and of fiscal year spending without the | ||||||
11 | increase. | ||||||
12 | (d) Ballot questions for revenue increases must begin: | ||||||
13 | "Shall (description of the tax increase) to increase State | ||||||
14 | revenues by (amount of first or, if phased in, full fiscal year | ||||||
15 | dollar increase) annually for the purpose of . . .?". | ||||||
16 | (e) The State shall reimburse municipalities and counties | ||||||
17 | for the costs of a special election. | ||||||
18 | Section 25. Emergency taxes. | ||||||
19 | (a) The State may impose emergency taxes only in accordance | ||||||
20 | with this Section. | ||||||
21 | (b) The tax must be approved for a specified time period by | ||||||
22 | a three-fifths majority of the members of each house of the | ||||||
23 | General Assembly. | ||||||
24 | (c) Emergency tax revenue may be spent only after other | ||||||
25 | available reserves are depleted and must be refunded 180 days |
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1 | after the emergency ends if not spent on the emergency. | ||||||
2 | (d) The tax must be submitted for approval by the voters at | ||||||
3 | the next regular election. | ||||||
4 | (e) If not approved by the voters as provided in subsection | ||||||
5 | (d), the emergency tax expires 30 days following the election. | ||||||
6 | Section 30. Past Due Paydown Fund. The Past Due Paydown | ||||||
7 | Fund is established as a special fund in the State treasury and | ||||||
8 | must be administered for the purposes identified in this | ||||||
9 | Section.
At the close of the lapse period for each fiscal year | ||||||
10 | beginning in 2012, the State Comptroller shall identify the | ||||||
11 | amount of General Fund unappropriated surplus above the | ||||||
12 | Spending Growth Index limitation and transfer to the fund any | ||||||
13 | amount necessary up to the total past due operating debt owed | ||||||
14 | by the State as of the close of fiscal year 2011.
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15 | The General Assembly may authorize transfers, | ||||||
16 | appropriations, and allocations from the fund only to fund the | ||||||
17 | costs of paying down the remaining past due debt until the debt | ||||||
18 | is zero. Any remaining funds shall be transferred to the Common | ||||||
19 | School Fund and Education Assistance Fund. | ||||||
20 | Section 35. State Budget Stabilization Fund. The State | ||||||
21 | Budget Stabilization Fund is established as a special fund in | ||||||
22 | the State treasury and must be administered for the purposes | ||||||
23 | identified in this Section.
At the close the lapse period of | ||||||
24 | each fiscal year, the State Comptroller shall identify the |
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1 | amount of General Fund unappropriated surplus above the State | ||||||
2 | Spending Growth Index expenditure limitation and above the | ||||||
3 | amount necessary to fully fund and pay down the past due | ||||||
4 | operating debt to zero. The fund may not exceed 8% of the total | ||||||
5 | General Fund revenues received in the immediately preceding | ||||||
6 | fiscal year. | ||||||
7 | The General Assembly may authorize transfers, | ||||||
8 | appropriations, and allocations from the fund only to fund the | ||||||
9 | costs of State government up to the expenditure limit | ||||||
10 | calculated under Section 10 in years when State revenues are | ||||||
11 | less than the amount necessary to finance the level of | ||||||
12 | expenditures permitted under Section 10. Transfers require a | ||||||
13 | three-fifths supermajority vote of the General Assembly. | ||||||
14 | The money in the fund may be invested as provided by law, | ||||||
15 | with the earnings credited to the fund. At the close of every | ||||||
16 | month during which the fund is at the 8% limitation, the State | ||||||
17 | Comptroller shall transfer the excess to the Common School Fund | ||||||
18 | and Education Assistance Fund. | ||||||
19 | Section 40. Pension payments. | ||||||
20 | (a) For the purposes of this Section: | ||||||
21 | "Actual expenditures" means the payment of State funds to | ||||||
22 | satisfy any State financial obligation. | ||||||
23 | "First appropriation" means any legislation as part of the | ||||||
24 | annual budgetary and appropriation process must be directed to | ||||||
25 | authorize and require the full pension payment prior to any |
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1 | other appropriations or expenditures. | ||||||
2 | "First expenditure" means that any authorized State | ||||||
3 | appropriation and subsequent actual payments must have the | ||||||
4 | first payment be made toward the annual required pension | ||||||
5 | payment. | ||||||
6 | "Monthly pro rata pension payment" means the average | ||||||
7 | monthly pension payment calculated by dividing the total fiscal | ||||||
8 | year annual pension payment by 12 months. | ||||||
9 | "Pension payment" means the total annual required pension | ||||||
10 | payment for each fiscal year as defined by the Commission on | ||||||
11 | Government Forecasting and Accountability following generally | ||||||
12 | accepted accounting principles. | ||||||
13 | (b) Notwithstanding any other law, beginning with fiscal | ||||||
14 | year 2012 and for each budget year thereafter, the General | ||||||
15 | Assembly's first appropriation each year must be directed to | ||||||
16 | make the full annual pension payment defined by the Commission | ||||||
17 | on Government Forecasting and Accountability and in compliance | ||||||
18 | with generally accepted accounting principles. This | ||||||
19 | appropriation must be made first and executing it (making the | ||||||
20 | actual payments required by it) shall take precedence over any | ||||||
21 | other appropriation or expenditure. | ||||||
22 | Exceptions may be made to the pension payment requirement | ||||||
23 | in this subsection (b) if authorized by a law approved by a | ||||||
24 | three-fifths vote of each chamber of the General Assembly and | ||||||
25 | approved by the Governor. Any exceptions made by the General | ||||||
26 | Assembly shall specify the dollar amount and purposes of |
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1 | appropriations which shall be made prior to the pension | ||||||
2 | payment. | ||||||
3 | (c) By March 1 of each year, the State Comptroller shall | ||||||
4 | take the total annually required pension payment for the | ||||||
5 | upcoming fiscal year (beginning on July 1) and divide that | ||||||
6 | number by 12. This amount becomes the monthly pro rata pension | ||||||
7 | payment for each month of the upcoming fiscal year. | ||||||
8 | If during the fiscal year, the Commission on Government | ||||||
9 | Forecasting and Accountability adjusts the annually required | ||||||
10 | pension payment for the current year upward, the State | ||||||
11 | Comptroller shall recalculate the monthly pro rata pension | ||||||
12 | payment upward accordingly and allocate the increase evenly | ||||||
13 | over the remaining months to ensure that the full annual | ||||||
14 | pension payment is made for the fiscal year. | ||||||
15 | If during the fiscal year, the Commission on Government | ||||||
16 | Forecasting and Accountability adjusts the annually required | ||||||
17 | pension payment downward, the original payment schedule shall | ||||||
18 | be maintained. Payments in excess of the revised payment | ||||||
19 | schedule shall be allocated to any existing unfunded pension | ||||||
20 | liability. | ||||||
21 | If during the fiscal year, the Commission on Government | ||||||
22 | Forecasting and Accountability adjusts the annually required | ||||||
23 | pension payment downward, and if there is no remaining unfunded | ||||||
24 | pension liability as calculated by the Commission on Government | ||||||
25 | Forecasting and Accountability and in compliance with | ||||||
26 | generally accepted accounting principles, then the State |
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1 | Comptroller shall recalculate the monthly pro rata pension | ||||||
2 | payment downward accordingly and allocate the reduction evenly | ||||||
3 | over the remaining months to ensure that the full annual | ||||||
4 | pension payment is made for the fiscal year. | ||||||
5 | By no later than the 5th of each month, the Comptroller | ||||||
6 | shall disburse funds as authorized by the pension payment | ||||||
7 | appropriation to the various State retirement systems such that | ||||||
8 | the total payment equals the monthly pro rata pension payment. | ||||||
9 | The payments shall be allocated proportionally to each | ||||||
10 | retirement fund as calculated by the Commission on Government | ||||||
11 | Forecasting and Accountability. | ||||||
12 | There shall be no exceptions to this subsection (c) except | ||||||
13 | as authorized by a law approved by three-fifths vote of each | ||||||
14 | chamber of the General Assembly and approved by the Governor. | ||||||
15 | (d) If for any reason the monthly pro rata pension payment | ||||||
16 | is not made by the 5th of the month, or if for any reason the | ||||||
17 | accumulated payments for the year do not equal the sum of the | ||||||
18 | monthly pro rata pension payments for the months having passed | ||||||
19 | during the fiscal year, then the State Comptroller shall cease | ||||||
20 | all payments from State resources until such time as the | ||||||
21 | pension payment is brought current for the year. | ||||||
22 | There shall be no exceptions to this subsection (d) except | ||||||
23 | as authorized by a law approved by a three-fifths vote of each | ||||||
24 | chamber of the legislature and approved by the Governor.
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25 | Section 90. The State Finance Act is amended by adding |
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1 | Sections 5.786 and 5.788 as follows: | ||||||
2 | (30 ILCS 105/5.786 new) | ||||||
3 | Sec. 5.786. The Past Due Paydown Fund. | ||||||
4 | (30 ILCS 105/5.788 new) | ||||||
5 | Sec. 5.788. The State Budget Stabilization Fund.
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6 | Section 99. Effective date. This Act takes effect upon | ||||||
7 | becoming law.
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