Still No State Budget, But Senate Democrats Demonstrate a Positive Path Forward
For the third year in a row, the Illinois General Assembly adjourned on May 31 without agreeing on a budget for the upcoming fiscal year. It is frustrating and discouraging that our elected officials continue to fail to increase state revenue, which is desperately needed to repair the damage that has been done to the State of Illinois during the past two years.
The Senate Democrats did demonstrate a positive way forward by passing a budget that protects existing resources and generates new revenue.
However, one budget line item in that proposal is particularly representative of the choices faced by our elected officials. In the Senate Democrat’s budget proposal for the upcoming year, FY 18, which passed on May 23, the Supportive Housing Services line item was funded at $13.4 million in General Revenue Funds (GRF). This is same amount of funding that was available in the last fiscal year with a full budget, FY 15. A version of the FY 18 budget—a compromise between Democrats and Republicans—that passed the Senate just a week earlier, May 17, provided only $3.8 million in GRF for the Supportive Housing Services line item. Such a huge cut would mean that thousands of people who need services to help maintain their housing would not receive those services and be at risk of homelessness.
Increasing revenue made the cut unnecessary in the May 23 version of the state budget. On that same day, the Senate Democrats passed a revenue package that increases the income tax, expands the sales tax base to include certain services and doubles the Earned Income Tax Credit (EITC). Unfortunately, the House has yet to vote on the Senate’s budget proposal.
The State of Illinois desperately needs to increase revenue to pay off the huge backlog of unpaid bills, avoid additional budget cuts to programs that help people meet their basic human needs and improve our government’s fiscal condition. That’s why we continue to be an active member of the Responsible Budget Coalition, which calls on Governor Rauner and Illinois lawmakers to pass a responsible budget NOW that raises adequate revenue to fully fund vital services.
State Legislative Victories
We’re proud to say that Housing Action Illinois’ work resulted in the successful passage of two important pieces of legislation. We also worked to support or oppose additional initiatives during the recent session.
We encourage Governor Rauner to sign the bills we advocated for into law.
Consumer Protections for Rent-to-Own Homebuyers
In the aftermath of the foreclosure crisis, there has been a resurgence in predatory rent-to own contracts (a.k.a. contracts for deed or installment sales contracts) from largely unregulated companies that falsely promise homeownership to people with low incomes. Too often, these contracts result in people agreeing to buy houses in extremely poor condition at highly inflated purchase prices and high loan interest rates. For predatory sellers, their business model is based on the buyer defaulting on the contract, so the home can be resold in the same predatory manner.
Housing Action Illinois developed Senate Bill 885 based on feedback provided HUD approved housing counseling agencies, public interest attorneys and others. By sharing the stories of people who have been hurt by predatory rent-to-own home contracts and working closely with staff for Attorney General Lisa Madigan, we were able to overcome initial opposition from various parts of the real estate industry to pass the bill.
Extension of Abandoned Property Relief for Local Governments and Foreclosure Prevention Resources for Homeowners
Senate Bill 647 extends two fees that provide resources for the Illinois Housing Development Authority (IHDA) to make grants to deal with the aftermath of the foreclosure crisis. Passage of SB 647 means that IHDA will be able to continue to collect these fees—a “graduated” foreclosure filing fee paid by lender when they file a foreclosure case and a fee on homes sold through the judicial sales process—through end of 2019 and keep making grants building on past successes using these resources.
For example, in February 2017, IHDA approved more than $9.5 million in Abandoned Property Program (APP) grant awards to 68 local governments to turn abandoned properties into assets for renewing neighborhoods and assisting with community revitalization and stabilization plans. Under the Foreclosure Prevention Program (FPP), IHDA provides grants to HUD approved housing counseling agencies to provide foreclosure counseling, pre-purchase counseling and related services. IHDA is currently reviewing applications to make up to $6 million in FPP awards using funds from the graduated foreclosure filing fee.
Housing Action Illinois mobilized local governments and HUD-approved housing counseling agencies to reach out to their state legislators about the importance of maintaining these financial resources, and we were able to overcome opposition to extending the fees from interest groups representing financial institutions.
We were glad to lend our efforts to help pass House Bill 261, an initiative of the Association of Homeless Advocates in the North/Northwest District (AHAND) of the Alliance to End Homelessness in Suburban Cook County. With certain limitations, this bill will allow school districts to use state transportation funds to pay for housing if it is agreed that doing so is in the best interest of both the school district and a student who is at risk of, or actually experiencing, homelessness.
Working with our partners, Housing Action Illinois was able to successfully oppose multiple pieces of legislation that would have negatively impacted homeowners and tenants. However, among our legislative victories, there is disappointment about one bill that passed. House Bill 3001 will make it easier for a landlord to make deductions from a tenant’s security deposit in the absence of receipts that demonstrate the landlord’s costs for repairs and will weaken Illinois’ Security Deposit Return Act in other ways as well. We plan to advocate for legislation to mitigate the negative impact of HB 3001 as soon as possible.