Last week, House Speaker Michael Madigan adjourned the Illinois House with “sine die.” In effect, and barring any recall to special session by Governor Pat Quinn, the House will remain adjourned until January when the new members are sworn in.
With the end of the 98th General Assembly, a number of legislative issues expired. SB 16, the school funding reform proposal, was one of the items remaining behind. Other issues included a minimum wage increase as well as an extension of the income tax increase.
In addition, the end of the session realized the retirement of key House leaders from our region. Our thanks and appreciation are extended to Tom Cross (Oswego-97th), Tim Schmitz (Batavia-65th), Kay Hatcher (Yorkville-50th), and Darlene Senger (Naperville-41st) for their service and dedication to the residents and businesses of our area. We wish them well as they begin new opportunities.
Gov.-elect Bruce Rauner will be sworn in on Jan. 12. When the House reconvenes on Jan. 14, new members will be representing those districts. While the House and Senate will remain in Democrat control, the Governor’s office will have switched to the Republican party.
Many of those items that were left unresolved last week will likely return. In addition, topics including pension reform and workers’ compensation reform will need to be addressed.
We will continue to monitor the activities. We will continue to work with our business members to advocate for legislation that supports their growth and success. We will continue to ask for your support in communicating the impact proposed legislation will have on you, your business, and your employees. We hope you will accept that challenge and work with us.
The week before Thanksgiving, the General Assembly returned to Springfield on Wednesday and Thursday to continue discussions on legislation addressing a number of topics and issues.
This week, Veto Session continues with the legislators returning for a second week Tuesday through Thursday. Although a number of topics are expected to be discussed, many observers believe few points of interest will be acted on.
Gov. Elect Bruce Rauner has asked current elected officials to hold off on passing anything major during the session. A recent conference call with Illinois Chamber of Commerce’s Government Affairs staff included highlights on the following:
Minimum Wage Hike
Despite nearly three years of legislative debate and an advisory referendum placed on the ballot last month that received more than 67 percent approval from the voters, it appears unlikely that a vote increasing the minimum wage will take place during veto session. Illinois already has one of the highest minimum wages in the nation and small businesses simply cannot afford an increase of nearly 21 percent to their labor costs as our state’s economy continues to recovery from the Great Recession and our economic growth lags behind neighboring states.
Amendment #5 to SB 68 was debated late last week. Current write up calls for a staggered minimum wage increasing from $9.25 to $11 over the next three years.
Many expect this to be a January issue andduring a recent conference call, reference was made that most of the fight would take place in the House.
Manufacturers’ Purchase Credit
In August, the Illinois Manufacturers’ Purchase Credit (MPC) was subject to the automatic sunset provisions of the Illinois sales tax. The Illinois Chamber has been actively reaching out to legislators over the summer to explain how important the MPC credit is to our manufacturing members throughout the state and working to make sure that extension of the MPC is on a list of items to be considered during fall veto session. While there are no guarantees given, extension of the MPC is certainly an opportunity for members of the General Assembly to send a signal that legislators are willing to be responsive to the needs of the Illinois business community.
Premium Tax for Self-Insured Companies
Active consideration appears to be given to repeal the recently-enacted insurance premium tax (SB 3324/Public Act 98-0978) during fall veto session. The new tax imposes a 3.5 percent tax on insurance premiums paid directly by Industrial Insureds to unauthorized insurers (without the use of a Surplus Lines Broker) — in short, almost all self-insurers, including some large not-for-profits.
Prior to SB 3324, these self-insurance transactions were exempt from premium tax. Most legislators, including the bill’s sponsor, have indicated that they were not made aware of the new tax and its significant negative effect on Illinois-based businesses as the bill moved through the General Assembly. In fact, the new tax was not mentioned during House and Senate floor debates on the bill. Legislators that did not understand the full impact of SB 3324 will hopefully now have an opportunity to reconsider their vote prior to the January 1 effective date of the new tax.
Health Benefits Exchange
Advocates and coalition members for a state-based healthcare exchange are expected to meet during veto session to discuss the possibility of introducing legislation in the House to create a state-based exchange. The Senate has already passed a bill. The House could not reach consensus on the issue and it stalled.
Gov. Pat Quinn is urging the creation of a state-based exchange so Illinois does not potentially lose the Federal subsidies if the U.S. Supreme Court strikes them down next year in their ruling. Illinois currently partners with the Federal government to run its healthcare exchange. Federal law, as written, states tax credits to be given to individuals in exchanges established by the states. The Supreme Court will rule whether those tax credits are applicable to individual in exchanges run by the Federal government.
Those health insurers not participating on the exchange will have a capped assessment at the five-year average from their previous contribution to CHIP.
Legislation may also be introduced to regulate lawsuit lending in Illinois. This has been an initiative of the Illinois Chamber and others in the past and continues to be a priority to regulate an industry that seeks out plaintiffs with promising pending lawsuits and offer them “up front” cash to cover immediate living or medical expenses while they are engaged in a lawsuit and await settlement. These third-party loans are provided at exorbitant interest rates, and are then paid back to the lender from any settlement or judgment award the plaintiff may later receive.
In a real sense, the consumer lawsuit lender is a gambler who bets on the plaintiff’s case being successful. If the plaintiff recovers substantially through settlement or a damages award, the lawsuit lender wins big. But, if the plaintiff loses, the lawsuit lender recovers nothing. This fact leads lawsuit lenders to seek control over strategic decisions in litigation in order to prosecute lawsuits in their own interests, even if those interests diverge from those of the plaintiffs.
Legal reform advocates, such as the U.S. Chamber Institute for Legal Reform (ILR), and consumer advocacy groups are promoting legislation that would actually protect consumers and curb lending abuses by bringing lawsuit lending into alignment with existing state law. These efforts would make consumer lawsuit lending subject to the same fair-lending laws already in force in that particular state.
Income Tax Extension
No action is expected to take place during the session.
Legislation introduced earlier this year would mandate that employers set up an automatic Individual Retirement Account for their employees, a system to be administered by the Illinois Dept. of Revenue and a newly created board led by the Illinois Treasurer.
The legislation targets small businesses with 25 or more employees and forces them to set up the accounts and to automatically deduct at least 3 percent from their employees’ paychecks. An employee would have to actively pursue “opting out” if they did not want to participate.
The Illinois and Aurora chambers are part of a coalition that opposes this proposal as it is a mandate on employers, not an option. Small businesses currently have a variety of private sector options they may choose to participate in for retirement purposes. And the money from participants would not be held in or managed by a depository institution or a trained financial professional. Instead, it would be deposited into a new government holding account to be invested potentially by state officials. The consumer losses suffered under other state administered investment programs are reason enough to oppose implementing yet another government-run investment program.
Legislation for Public Utilities
During the first week of session, HA#1 and HA#2 were recommended to be adopted to HB 3975 in House Public Utilities Committee to extend the sunset date for the implementation of modernizing and upgrading Illinois’ electrical system.
While the State Treasurer race between State Rep. Tom Cross (Rep.) and State Senator Michael Frerichs (Dem.) remains too close to call at this time, other races were decided during last week’s General Election. While the official results will not be certified by the Illinois State Board of Elections until Nov. 30, unofficial results of Statewide and local races are available.
For the first time in 16 years, a Republican has won the Governor’s race in Illinois. Bruce Rauner defeated Gov. Pat Quinn in a three-way race. With 99.54% of precincts reporting, the Associate Press declared Rauner the winner with 50.77% of the vote to Quinn’s 45.87% and Libertarian candidate Chad Grimm’s 3.37%. Gov.-elect Rauner will be sworn into office January 12.
Democratic incumbents U.S. Senator Richard Durbin, Attorney General Lisa Madigan, and Secretary of State Jesse White won their respective races against GOP and Libertarian challengers. Republican Comptroller Judy Baar Topinka won re-election.
In the U.S. Senate, Democrats lost the advantage with the GOP now holding a 52-46 advantage.
In local Congressional races, Republicans Peter Roskam (IL-6) and Randy Hultgren (IL-14) as well as Democrat Bill Foster (IL-11) fought off challenges in their races. At the end of the night, the U.S. House of Representatives maintained their GOP majority (244-184) with a net gain of 13 seats.
In the Illinois Senate, unchallenged incumbents Linda Holmes (D-42), Karen McConnaughay (R-33), and Michael Connelly (R-21) all retained their seats. With the Democrats losing just one seat last week, they will hold a 39-20 margin over Illinois Senate Republicans.
In Illinois, the House will maintain its current makeup of 71 Democrats to 47 Republicans. Among the local races, unchallenged incumbents returning to Springfield include Mike Fortner (R-49), Robert Pritchard (R-70), and Linda Chapa LaVia (D-83). Incumbents Stephanie Kifowit (D-84) successfully fended off a challenge from Krishna Bansal and John Anthony (R-75) won a challenge from Martha Shugart.
In the four open House races locally, Republicans were able to maintain those seats. Grant Wehrli won over Ed Agustin to replace Darlene Senger in the House 41. Former Aurora Regional Chamber Board Chair Keith Wheeler successfully won the race against Valerie Burd to replace retiring Kay Hatcher in the 50 District. Steven Andersson ran unopposed to succeed Tim Schmitz in the 65 District. Mark Batinick took the majority in the race to succeed Tom Cross in the House 97.
The General Assembly will return to Springfield on November 19 to begin the Veto Session. Legislators in the Illinois Senate and House will be sworn in January 14.
This week, the Aurora Regional Chamber of Commerce will hold its Annual Celebration of Membership. This event highlights the accomplishments of the business community, showcases the activities of the Aurora Chamber and sets the direction for the upcoming year.
This past year, we had more than 100 businesses assist the Chamber and its partners with the Aurora Regional Pathways to Prosperity initiative. Others helped craft curriculum for Aurora University’s successful launch of the John C. Dunham STEM Partnership School. Additional organizations are involved in a growing number of causes and efforts in our community to create a stronger, more vibrant future for the community in which we all live, work and enjoy.
Looking back, we realized we completed 45 percent more certificates of origin for our business members to export their products around the world. Aurora area goods are being sold worldwide; your neighbors, family members or friends may be involved in this growing global economy.
Still others participated in more than 100 public policy meetings to help improve the business climate and share the business voice with our elected officials at City Hall, in Springfield and Washington.
Through discount programs and member discounts, our members were able to improve their bottom line by spending less. We created important connections for our businesses to collaborate and grow. More than 170 networking opportunities were available to our members.
Key events like the State of the City, the State of the Village and the multi-chamber Holiday Celebration offered opportunities for our community’s leaders to foster a collaborative, supportive economy in our region.
We offered a number of educational events for business leaders to learn better business techniques. With legislation that impacted medical marijuana use, the Affordable Care Act and Fair Labor Standards Act (to name a few), the Aurora Chamber organized programs to make its members aware of the impact to their businesses.
Of course, we cannot do it alone. We counted more than 50 collaborative partners that helped us organize, promote and coordinate programs and activities. We had more than 140 volunteers to lend a hand. We appreciate the assistance our Ambassadors provide at meetings, with welcome calls, mentoring new members and so much more. Our committee members and board members help guide our direction, and in many cases, assist in the implementation of the plans to support our business community.
During Thursday’s lunch, we will recognize our Immediate Past Chair Keith Wheeler of Responsive Network Services for his leadership this past year. We’ll also hear from Laura Newman of Mitutoyo America Corporation who recently accepted the role of board chair.
We are celebrating a remarkable year – and appreciate all of the efforts of the business community in making this region so strong.
One last request as we continue to strengthen our area: Please vote next Tuesday.
It’s easy to be cynical. Some believe our problems are too big and our politics are too small. Some wonder whether voting is worth the bother, whether it will make a difference. The truth is that every vote and voice matters in this election. If you want your voice to be heard, vote. With so many close contests this year, every vote really does count.