What’s new on Passed Grand Bargain Legislation:
SB1 – Education Reform Funding
SB3 – Local Gov’t consolidation
SB4 – General Obligation Restructuring Bonds ($7 billion)
SB6 – $37.3 billion appropriations bill that authorizes spending for state programs in the fiscal year starting July 1.
SB7 – Gaming Expansion that adds an additional 6 casinos
SB8 – Procurement
SB9 – Tax Increase – The plan calls for about $5.4 billion in higher taxes, including raising the personal income tax rate from the current 3.75 percent to 4.95 percent and the Corporate rate from the current 5.25 percent to 7.0 percent. The package also includes extending the state sales tax (6.25%) to a number of services not now taxed. Under the bill, sales taxes will now be applied to laundry and dry-cleaning services, pest control, security and alarm services and tattoo and piercing services. Satellite TV service will be subject to a 5 percent franchise tax. The tax bill no longer applies to repair and maintenance of cars or to landscaping services.
SB16 – Pension Reform
All of these bills have moved on now to the House for consideration. SB12 / SB198 cover Workers’ Comp legislation and that has not yet passed out of the Senate. We are also closely watching other legislation as well.
SB 484 freezes property taxes for schools, except in Chicago. However, the bill also allows financially strapped school districts to appeal to the State Board of Education for a waiver from the freeze. A district seeking a waiver has to meet certain conditions, such as losing 10 percent of its equalized assessed value in one year or having more than half of its students in poverty.
SB 482 freezes taxes for other units of local government except schools and the city of Chicago. In both bills, the freeze does not apply to taxes levied to pay off bonds or make pension payments. SB 482 and 484 will now head to the House.
SB 81 has passed both the Senate and House now and moves on to the Governor for hopeful veto. SB 81 increases the minimum wage for an employee who is 18 years of age or older as follows: to $9 per hour from January 1, 2018 to December 31, 2018; to $10 per hour from January 1, 2019 to December 31, 2019; to $11.25 from January 1, 2020 to December 31, 2020; to $13 per hour from January 1, 2021 to December 31, 2021; and to $15 per hour on and after January 1, 2022. Provides that the minimum wage for an employee who is under 18 years of age that has worked more than 650 hours for an employer during any calendar year shall not be less than the wage required for employees who are 18 year of age or older. Provides that the minimum wage for an employee who is under 18 years of age that has not worked more than 650 hours for an employer during any calendar year shall be: (1) $8 per hour from January 1, 2018 to December 31, 2018; (2) $8.50 per hour from January 1, 2019 to December 31, 2019; (3) $9.25 per hour from January 1, 2020 to December 31, 2020; (4) $10.50 per hour from January 1, 2021 to December 31, 2021; and (5) $12 per hour on and after January 1, 2022.
On the federal front, small businesses can breathe a sigh of relief. The fiduciary rule, a proposed regulation from the Labor Department under President Barack Obama that would limit access to retirement investment advice for small businesses and their workers, has been delayed. A few weeks back the House passed the American Health Care Act, and the Senate is expected to begin work on its version of the bill in the coming weeks.
Later this summer you can expect to see significant action on what could be the first meaningful tax reform package in over a quarter century. The House Ways and Means Committee is already moving quickly with hearings to draft a bill. Congress and the White House have successfully rolled back many of the previous administration’s harmful regulations. Now they are close to doing something that has not been done in nearly 70 years: fundamentally transforming how federal agencies issue new regulations by passing the Regulatory Accountability Act (RAA). This bill will hold federal agencies more accountable, create a more transparent rulemaking process, and most importantly, ensure Congressional intent is achieved, not the intent of the agency.