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Decision makers have been busy in Springfield recently. Read on to learn about revenue reform, the state education budget, changes to children’s health insurance and the Early Childhood Capital Program.
Budget Update
The fall “veto session” in Springfield lasted into the beginning of the New Year, resulting in several major actions taken by the outgoing 96th General Assembly.
Most significant for early childhood programs and advocates, the General Assembly voted to raise the state’s personal and corporate income tax rates as part of a revenue reform plan. This tax increase, coupled with significant budget cuts over the past two years (including decreases in early learning funding) and budget development reforms will help Illinois begin to deal with the $13 billion state budget deficit.
Lawmakers voted to raise the personal income tax from 3% to 5% for the next four years and to limit spending increases during that period. Unless future legislation is enacted, the increased personal tax rate will be rolled back to 4% in 2014 and rolled back further to 3.5% 10 years after that. A small portion of the permanent component of the tax increase will be split evenly between education and human services. Get more details on the tax increase legislation.
A legislative proposal to restructure a portion of the state’s deficit so that it can be paid off over 14 years did not pass in January. That proposal would have given providers access to the FY11 funding they are owed more quickly by extending the state’s timeframe for fully eliminating the deficit. The deficit totals nearly half of the overall discretionary budget. Legislation on the debt restructuring was proposed again as the new legislative session began and could be considered in the State Senate as early as next week.
In addition to the problem of delayed payments, there are concerns that the state may face additional budget cuts in the current fiscal year. Most of the discussion has been centered on cuts in funding for human services, specifically to the Child Care Assistance Program that provides child care subsidies for low-income, working parents. The Ounce of Prevention Fund and our advocacy partners will continue to monitor the situation and provide updates as more information is available.
We will keep you informed of any legislative actions that could impact early childhood programs during the new session. One of the first budget actions will be the governor’s budget address on February 16. Look for our upcoming Information Alert to learn how early childhood programs fare in Gov. Quinn’s proposal.
ISBE Budget Recommendations
The Illinois State Board of Education (ISBE) met in January and approved the budget that it will recommend to the General Assembly. The ISBE budget has been dramatically reduced over the last few years, including a 10% cut to the Early Childhood Block Grant (ECBG) in FY2010. For FY 2012, ISBE recommended that the ECBG remain flat funded at the FY 2011 level.
ISBE proposed a 10.2% increase over last year’s total education funding level, with much of the increase going to restore transportation funding and to modestly increase the per child General State Aid amount paid to districts.
ISBE also recommended designating $1.5 million toward developing a Kindergarten Readiness Assessment process for Illinois. This funding, a reallocation from a previously administered assessment that is now wrapping up, indicates ISBE’s commitment to building effective connections between early childhood education and K-12 systems.
New Legislators
The 97th General Assembly was sworn in January 12 and, after a brief delay due to the weather, began work this week. Many new legislators are in Springfield for the first time. Look up your legislators to see if they are new.
Changes to All Kids Health Insurance
During the veto session, the General Assembly implemented cost-saving changes to the state’s Medicaid program, which provides health care for low-income citizens. One change limits enrollment in the state’s All Kids health insurance program to children in families with income less than 300% of the federal poverty level, or $64,000 for a family of four. Previously, children from families at all income levels were eligible for All Kids if they had been uninsured for more than one year and paid a sliding scale toward premiums and other costs.
This new legislation requires families to provide proof of one month’s income to prove eligibility (previously only one pay stub was necessary) and to recertify their income eligibility for the program annually. .
Early Childhood Capital Program
At its December 14, 2010, meeting, the General Assembly’s Joint Committee on Administrative Rules approved the rules for the Early Childhood Capital Program.
Built on a $45 million appropriation in the capital bill passed in 2009 and strengthened through legislation advocated for by the Ounce of Prevention Fund and its coalition partners in 2010, this program would have provided funding for construction or renovation of space in both school- and community-based early childhood programs.
But on January 26, the Illinois Appellate Court ruled that the entire capital bill was unconstitutional, thereby putting a hold on the entire capital program, including the Early Childhood Capital Program. The Governor’s Office has appealed the Appellate Court ruling to the State Supreme Court, which has ordered a temporary stay of the Appellate Court’s decision while it considers the case.
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