Government Affairs update 12/4/2018

Federal News

Republican and Democratic leaders on Monday agreed to a two-week stopgap spending measure that would put to rest fears of a partial government shutdown later this week.

The short-term spending deal, if passed, would fund government agencies and extend expiring programs through Dec. 21 rather than Dec. 7th. It also would postpone a fight over funding levels for President Trump’s proposed border wall. So far, Democrats have agreed to post $1.6 billion towards additional border security and President Trump has recently asked for upwards of $5 billion. The one negotiation that continues to be mentioned to get them to agree to fully fund his border security request would be an offer to restore protections for immigrants who came to the country illegally as children. The president put that group at risk when he rescinded the Deferred Action for Childhood Arrivals (DACA) program last year.

The new Dec. 21 deadline raises the stakes, potentially setting up a showdown that would affect thousands of federal workers and close national parks across the country just days ahead of Christmas. Unlike many previous showdowns, however, this funding lapse would affect only part of the government. Congress appropriated about 75 percent of its annual spending in five appropriations bills ahead of Oct. 1, the start of the new fiscal year.

The remaining seven bills cover transportation, state and foreign operations, the Commerce and Justice departments, and, the Department of Homeland Security – the bill that would include any potential wall funding.

House Republicans also unexpectedly released a 297-page tax bill they hope to move during the lame-duck session of Congress. The legislation would revive a number of expired tax provisions known as ‘extenders,’ address glitches in the Tax Cuts and Jobs Act and make a range of changes to savings- and retirement-related tax provisions. Other parts of the bill would revamp the IRS, provide new tax breaks for start-up businesses and offer assistance to disaster victims.

Three weeks after the midterm elections, the final numbers for the next Congress have come into focus: Senate breakdown is 53 Republicans and 47 Democrats (Republicans picked up two Senate seats). The House breakdown is 235 Democrats and 200 Republicans (Democrats picked up 40 seats). On average, midterm elections flips are 35 seats in the House. It certainly was a large flip, but not one of the largest as some would lead you to believe. In Clinton’s first term the flip was 54 seats and in Obama’s first term it was 60.

A bipartisan bill introduced in the U.S. Senate this week would make Route 66 a National Historic Trail, which would open opportunities to fund preservation projects. U.S. Senators Tom Udall and Jim Inhofe introduced the bipartisan bill (HR 801) that would amend the National Trails System Act and include Route 66 in an effort to help revitalize towns along the historic corridor. The bill passed the House in June.

Finally, it seems as if Transportation Funding could be one area where a bipartisan agreement can be made. Fixing our roads, rails, and bridges still face the same problem of how do we pay for the spending. Outside of raising the national gas tax, many in Washington expect Democrats to push for a hike in the corporate tax rate, which was slashed under the tax law from 35% to 21%.

State News

The Illinois General Assembly wrapped up its final two week fall veto session last week. The House failed to override SB 2332. This bill would raise the age to purchase tobacco products to 21. The bill also would eliminate the penalties for underage possession of tobacco products. The Chamber opposed this legislation as it unfairly punishes businesses for the decisions of individuals. We can expect this legislation to likely resurface in 2019.

The new 101st General Assembly is sworn in on January 9, 2019. After election day, the Senate Democrats maintained their super majority status as they picked up at least two seats for a margin of 39-19 (one race was pending). A super majority is 36. In the House, the Democrats now have a super majority after picking up five seats to enjoy a 72-46 margin. A super majority there is 71.

Looks like next year will be a busy year…

With that said, let’s look at some issues that will most likely be popping up.
● Minimum Wage Increase to $15 likely in steps over a couple of years.
○ We’ll look at possible ways to see if that can be done regionally, if seasonal workers would be treated the same, if training wages are the same, and if there is consideration for a varying amount for teenagers.
● Graduated Income Tax
○ Governor elect Pritzker has talked about this numerous times, but not with any specific numbers. We still believe our current tax structure remains one of the positives for businesses opening in Illinois.
● Transportation Funding
○ Will one of the first big moves by the new Governor be a funding plan? Conversations still occur on a miles driven tax as well with a possible voluntary reporting pilot program for electric cars.
● Gaming
○ Video gaming terminals in Illinois now equate to 24 plus casinos with about 29,280 total. Each of the 10 casinos has about 1,200.
○ State tax and revenue share for all gambling rose from ‘17 to ‘18 by 3.5%
○ Still likely to see a push for 5 new casino licenses outside of Chicago and a sixth license going to the City of Chicago. In addition, gaming positions and VGT #’s at each existing license may be increased.
○ With the recent US Supreme Court ruling on legalized sports gaming, it is forecasted that Illinois could bring in $50 to $100 million on game wagering and fantasy sports as long as the taxes are kept low.
● Marijuana
○ Legalized recreational marijuana is estimated to be a $1 billion plus industry that would create 24,000 jobs.
○ It would bring $525 million in tax revenue with a 26% state excise tax and a 6.25% general sales tax. Revenue has been mentioned going towards education and pensions.
○ A number of workplace questions remain – set zoning on where could be sold, drug free workplace rules and effective testing, and it is still federally illegal & those with federal contracts have to test.

The first wave of the Secure Choice Retirement Savings Program has officially launched. The pilot program launched last spring and Secure Choice staff have been working with a small group of employers and employees over the last few months. The rollout is taking place in three waves, with the first wave starting already. Employers with 500 or more workers (as reported to the Department of Employment Security) have already begun to receive notices to complete the registration and enrollment process before the end of November 2018. Below is the wave schedule:

● November 2018 – Wave 1: Employers with 500+ employees
● July 2019 – Wave 2: Employers with 100-499 employees
● November 2019 – Wave 3: Employers with 25-99 employees

Additional resources are available on the Program website at www.ILSecureChoice.com. The Treasurer’s Office, the chief administrator of the Secure Choice program, has offered up representatives to speak to Chambers, businesses, and employees on the program. If you are interested in having them come out and speak to you or your group, please reach out to us.

City News

The Joliet City Council votes tonight on a one-year, partial moratorium on new video gambling licenses for establishments that have a liquor license and are east of Rt. 59. The moratorium does not apply to truck stops or other gas stations that qualify under state law based on the volume of fuel sales.The moratorium will not affect businesses that currently have video gambling licenses.

The US Army Corps of Engineers has released their Final Recommended Plan for improvements at Brandon Road. The recommended plan is technology driven without any major structural improvements at the existing site. A link to the recommendations can be found below. The comment period runs now through Dec 24th.The Chamber will continue to monitor this situation and advocate for minimal changes and shutdowns on this crucial waterway.
https://www.mvr.usace.army.mil/Missions/Environmental-Protection-and-Restoration/GLMRIS-BrandonRoad/