"This is a huge package with many, many moving parts," said Illinois Senate Minority Leader Christine Radogno.

CHICAGO – The latest version of a bipartisan Senate plan to break Illinois' political gridlock and solve the state's fiscal mess would generate more than $6 billion in fresh annual revenue from new and increased taxes.

The latest revenue piece of the so-called "Grand Bargain" compromise plan was filed Tuesday as backers tinkered with the package during a whirlwind day at the capital during which many of the 11 filed bills that make up the package were heard in committee.

"While we certainly would like to get something done, we are both very humble and willing to accept further additions, refinements….this is a huge package with many, many moving parts and I can't stress enough how much we are interested in constructive feedback to make this thing work," Senate Minority Leader Christine Radogno, R-Lemont, said during a committee hearing seated next to her fellow sponsor Senate President John Cullerton, D-Chicago.

Feedback they received.

Business and manufacturing groups first praised the leaders for their effort to break the 18-month-old budget impasse, then attacked pieces of the package they warned could drive businesses and residents out of the state.

Other special interest groups like unions attacked other pieces of the legislation lobbying lawmakers on both sides of the aisle to continue working on the deal. All the bills are linked so the package fails if even one is rejected.

The leaders dropped plans for committee votes that would ready the bills for a Wednesday floor vote. Instead, the bills received a hearing but then senators caucused. It was unclear how soon a floor vote might be taken.

After this week, the Senate is not scheduled to return until early February. Democrats were generally on board but it was unclear how many Republicans would support the package and the leaders want a strong bipartisan vote.

Significant hurdles lie ahead beyond a Senate vote. House Speaker Michael Madigan, D-Chicago, has not commented directly on the plan so its fate in that chamber is uncertain.

Gov. Bruce Rainer has not said much about the package that includes versions of several of his turnaround agenda items although he could provide more insight into his position when he delivers his state of the state address at noon Wednesday, Jan 25.

The package of bills would fund government through fiscal 2017, which ends June 30; authorize $7 billion of borrowing to pay down the state's $11 billion bill backlog; offer pension reforms; expand gambling; pave the way for local government consolidation; implement procurement and worker's compensation reforms; and create a local property tax freeze.

It would also extend state pension funding aid currently provided to local school districts to include Chicago Public Schools. The leaders plan to add a school aid overhaul once a special commission reports back on recommendations.

Revenue

Under revisions filed to Senate Bill 9 Tuesday, the state personal income tax rate would rise to 4.99% from its current level of 3.5%.

A 2011 hike that boosted the rate to 5% partially expired in January 2015. The original "grand bargain" plan envisioned raising the rate to 4.95%. The total increase would generate $4.6 billion annually. The revisions followed a warning from Rauner's administration that the original package would still leave the state with a budget hole to plug.

The corporate rate would rise to 7% from 5.25%. It would raise $577 million annually. Another $145 million would be raised by eliminating three corporate tax loopholes.

The leaders dropped a proposal to tax sugary drinks, which would have raised $560 million annually and added two new revenue generators.

A new business tax dubbed an "opportunity tax" would be imposed. It would charge businesses an annual fee of between $225 and $15,000 based on payroll. It would generate $750 million annually.

The state also would begin taxing some services including repairs and maintenance of personal property, amusement tickets, landscaping services, laundry and dry-cleaning, and vehicle storage facilities. It would also extend the telecom excise tax to cable and satellite services. Combined, the taxes would raise $413 million.

Various tax credits would be extended and some increased such as the earned income tax credit and education expense credit. The corporate franchise tax would be eliminated on July 1 and various business filing fees reduced.

Other Bills

The other pieces of the "Grand Bargain" include Senate Bill 1, which provides the shell to fill in education funding reforms that will be filed after a state commission releases recommendations early next month. The original package included a minimum wage hike in Senate Bill 2 but that was scrapped.

Senate Bill 3 makes it easier for the elimination or combination of some local governments including allowing voters to abolish some of the 1,400 township governments.

Senate Bill 4 authorizes $7 billion in borrowing that would repaid over a seven year term with the proceeds going to pay down the state's bill backlog and bring the payment cycle down to 30 days the current high of 18 months. The state general obligation restructuring bonds must be issued by September 1.

The state would further trim the backlog with $900 million expected to come from new casino license fees.

An amendment filed Tuesday would permit the Illinois Finance Authority to issue $250 million in state pension obligation acceleration bonds. It appears those proceeds might go to cover the costs of retiring employees that opt for a 70% buyout being offered in a pension reform bill that's part of the package.

Senate Bill 5 provides Chicago Public Schools with the same teachers' pension payment help the state currently gives all other school districts. The amount in fiscal 2017 is $215 million. Rauner recently vetoed separate legislation that was part of the state's stopgap budget deal that provided the fiscal 2017 funds, leaving a big hole for the district to fill.

Senate Bill 6 would provide funding through the remainder of the fiscal year for higher education, social service providers and others not covered by continuing appropriations and court and consent decrees. The bill allocated $740 million for human services and $1.1 billion for higher education. Kindergarten through 12th grade was fully funded for the fiscal year at $7.2 billion in the stopgap budget.

Senate Bill 7 would authorize six new casinos including one in Chicago, increase the number of  gambling positions such as slot machines at riverboat casinos and allow for land-based casinos. It would permit slot machines at four racetracks.

Senate Bill 8 would implement procurement reforms.

Senate Bill 10 deals with local government bonding authority, allowing home rule municipalities to dedicate tax revenues for bonds in order to secure a lower interest rate for borrowing.

Senate Bill 11 would ask state employees hired before 2011 to accept cuts to their cost of living adjustments in exchange for their future pay raises counting toward their pensionable salary. The bill also eliminates pensions for future state lawmakers, offers a 401(k)-style retirement option and limits end of career pension spiking.

It would phase in over five years any changes in actuarial or investment return assumptions made by the pension systems to ease the impact on upcoming contributions. It would also requires the pension systems to offer each member upon retirement the option to take a buyout of 70 % of the present value of his or her pension benefits.

Senate Bill 12 would implement changes to the state's worker's compensation rules.

Senate Bill 13 would implement a two-year local government property tax freeze. Increases would require voter approval. Extensions for debt service, pensions and public safety are exempt from the freeze, but still limited by existing state tax caps which hold increases to the lesser of the consumer price index or 5% increase. Chicago Public Schools is exempt.

To offset the impact, school district could privatize some services, scale back on physical education requirements, and discharge some unfunded mandates with voter approval.

The prolonged impasse over the state budget, taxes and reforms has left Illinois without a full budget since the end of June 2015 and dragged the state's bond ratings down to the lowest among states. Fitch Ratings has warned that further deterioration looms by the end of the month without state progress in tackling its fiscal woes.

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