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Keefe: Can the General Assembly Reach a Capitol Compromise?

By Eugene Keefe

Tuesday, June 20, 2017 | 714 | 0 | min read

We are advised that several folks in Spring-Nuts, I mean Springfield, came to the realization that our state government’s lack of a budget for the last several years was causing irrevocable financial damage with threats to continued government viability. If the dysfunction continued, one could forecast both the media and taxpayers basically coming to revolt during the next election to try to oust everyone involved.

Eugene Keefe

Eugene Keefe

These concerns caused major forces to come to bear to try to pull the two warring sides together. At present, any budget agreement will require a super majority that I understand puts the Republican General Assembly minority in something of a driver’s seat position.

Republicans appear to be making proposals that have the potential to be passed and signed into law by Gov. Bruce Rauner. And when Republicans make the legislative proposals, it gives the Democrats plausible deniability when cuts, caps and freezes are being made.

Accordingly, one day after both House and Senate Republicans presented a compromise balanced budget plan to end the roadblock, Rauner called lawmakers back to Springfield for a 10-day special session from this Wednesday through the June 30th fiscal year deadline. Please note that Moody’s and other bond-rating agencies have pointed to June 30 as the date the guillotine will fall on our state’s bond rating and the ability to borrow and remain fiscally viable. 

The compromise fromRepublicans has been titled the "Capitol Compromise" and includes a balanced budget with spending caps, property tax relief, workers' compensation reform, government consolidation, education reform, term limits and pension reform. The balanced budget incorporates:  

  • A four-year “hard” spending annual cap at $36 billion.
  • Approximately $5 billion in spending reductions.
  • Savings from reforms to pensions, state employees' group health insurance and procurement.
  • A real estate property tax freeze.
  • Across-the-board reductions to most state agencies and all branches of state government.
  • Other changes including paying down some of our state’s backlog of more than $4 billion in unpaid and pending bills. 

The property tax freeze caps local property tax levies for four years instead of a “permanent” freeze, and allows both exemptions for existing debt service payments and for voters by referendum to lower or raise levies, or renew the freeze in increments up to four years. 

The workers' compensation reform proposed by state Republicans deals with: 

  • Workers' comp medical fee schedule "corrections” that use Medicare rates as a one-time baseline benchmark.
  • Increases the temporary total disability waiting period from three to five.
  • Tries to clarify definitions for common injuries to ensure consistency in applying credits for repeat injuries.
  • Holds the max permanent partial disability rate at its current level for four years.
  • Creates a closed drug formulary.
  • Poorly attempts to clarify when a “traveling employee” is not covered under the state Workers' Compensation Act.  

From our perspective as defense lawyers, we are currently unsure of the impact of the proposed fee schedule “corrections.” If you understand the impact, please send a reply. We are sure there will be a mild savings in making the TTD waiting period longer. 

To our understanding, if this comp reform is passed and signed into law, the shoulder, or injuries/treatment to the shoulder, will again be awarded based on loss of use of the arm. A similar change will also ensure that the hip always remains part of the leg. This legislation reverses radical case law from our Appellate Court, WC Division, that magically turned shoulder injuries into part of the “body” by supposedly reading a dictionary. 

Freezing the PPD rate at its current level of four years will provide a modest savings. The closed drug formulary should also provide something of a savings.

The attempt to both initially legislate the “traveling employee” concept, while supposedly limiting it, is, in my view, a mess and should be quickly discarded by state Republicans. The words “traveling employee” are not defined in the WC Act and don’t need to be. I am sure at least one part of the new legislation proposed by the Republicans could greatly expand this dopey concept beyond the drafter’s intent. I am sure the system would be much better served to ask our hearing officers to continue to use the “arising out of and in the course of” standard when evaluating workers who are traveling. 

There are lots of other aspects of the the Capitol Compromise that aren’t strongly germane to the WC community, and I won’t report all of it here.

For business folks and others with interest, the best source of legislative information during the current crisis is the Illinois State Chamber of Commerce. President Todd Maisch and his lobbying guru, Jay Shattuck ,are both solid sources of inside information for their members. We urge you to consider joining if you care about government in this nutty state. For more information, go to www.ilchamber.org.

Eugene Keefe is a founding partner of Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted with his permission from the firm's client newsletter.

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