Chamber Members:
Happy Thursday! It is job report day and also an exciting news day with NASA’s rover “Perseverance” landing on Mars this afternoon – so exciting that Krispy Kreme has created a special Mars doughnut that is only sold today.
Additionally, President Biden is back to pushing his covid relief plan and we have a deeper dive into the budget announcements from yesterday. Also, some other state news and announcements are shared below.
*Daily Coronavirus update brought to you by Silver Cross Hospital
Jobs Report
The number of Americans applying for unemployment aid rose last week to 861,000, evidence that layoffs remain painfully high despite a steady drop in the number of confirmed viral infections. Applications from laid-off workers rose 13,000 from the previous week, which was revised sharply higher, the Labor Department said Thursday.
Thursday’s report showed that a total of 18.3 million people were receiving unemployment aid as of Jan. 30, down from 19.7 million the previous week. About three-quarters of those recipients are receiving checks from federal programs, including two extended benefit programs that provide jobless aid beyond the 26 weeks given by most states. That trend suggests that a sizable proportion of the unemployed have been out of work for more than six months, reflecting a bleak job market for many.
On a state-by-state basis, some populous states again reported large increases in new claims for the week ended February 13, contributing heavily to the overall rise. Illinois saw more than 33,000 new claims filed last week, on an unadjusted basis, while California estimated that 20,600 claims were filed. Others, however, saw notable decreases, including Texas with a drop of 12,400 unadjusted new claims, and Georgia with a drop of nearly 6,000.
President Opens Discussion Again on Covid Relief Plan & Infrastructure
President Biden on Wednesday afternoon met with a group of labor leaders he described as “close friends” to discuss his $1.9 trillion coronavirus relief plan and to get input on an effort to bolster American infrastructure that is expected to follow.
Jen Psaki, the White House press secretary, said Tuesday that the president views infrastructure as “one of the areas where there’s opportunity to work together” with Republicans, but she did not provide details on what would happen after the stimulus bill. “We haven’t yet determined what the next priority forward would be, but he is engaging with his policy team,” Ms. Psaki said. She also wouldn’t say whether he planned to move forward with his broad economic agenda or a bill focused on infrastructure.
Mr. Biden met Wednesday with several labor leaders including Richard Trumka, the president of the A.F.L.-C.I.O.; Sean McGarvey, president of North America’s Building Trades Unions; Terry O’Sullivan, general president of the Laborers’ International Union of North America; and James T. Callahan, general president of the International Union of Operating Engineers. Also at the meeting was Lonnie R. Stephenson, the international president of the International Brotherhood of Electrical Workers, who served on Mr. Biden’s transition advisory board.
Sitting in the Oval Office with the labor leaders on Wednesday afternoon, Mr. Biden called them all his close friends. “A lot of these folks have been my friends for a long, long, long time,” he said. “As they say in parts of my state, these are the folks that brung me to the dance.”
Mr. Biden noted that the United States is ranked “like 38th in the world in terms of infrastructure, everything from canals to highways to airports, to everything we can do, and we need to do to make ourselves competitive in the 21st Century.”
Senior Democratic officials have discussed proposing as much as $3 trillion in new spending as part of what they envision as a wide-ranging jobs and infrastructure package that would be the foundation of Biden’s ‘Build Back Better’ program, according to three people granted anonymity to share details of private deliberations. That would come on top of Biden’s $1.9 trillion relief plan.
Earlier in the day, Vice President Kamala Harris appeared on NBC’s “Today” show on Wednesday to promote the stimulus bill, which so far has no Republican support in Congress. Her appearance followed Mr. Biden’s participation in a CNN town hall on Tuesday night, where he projected optimism that his ambitious plan would help restore the economy.
Ms. Harris called it “a plan about getting our schools back open.” She added: “It’s going to be safer for our schools to reopen when we can get our schools the infrastructure needs, like helping them with their ventilation systems, helping them create social distancing with barriers, the things that are necessary to get them back open in a safe way.”
Worker Subsidies May Drop in Covid Relief Bill
Policies aimed at helping American workers stay home when they have the coronavirus have been scaled back in the Covid relief bill now moving through Congress and could be narrowed further, reviving a heated debate over how to balance fixing the economy with sound public health measures.
Costly provisions such as paid federal sick leave, a higher minimum wage and insurance subsidies for laid-off workers are facing Republican resistance as negotiators try to cut down the size of the nearly $2 trillion package. Some may be jettisoned entirely.
Public health experts say dropping those provisions will worsen disease spread. One study in Health Affairs found that states without guaranteed sick leave saw 400 fewer Covid cases a day after Congress temporarily mandated it last year. A separate study by University of Chicago researchers found people who hadn’t received federal stimulus checks were likelier to flout social distancing rules.
Budget Follow Up Information
The Governor proposed to balance the FY 2022 budget by, among other things, cutting $932 million in so-called “corporate loopholes.” The first three of the Governor’s proposals reverse agreements the Governor entered as a result of bi-partisan budget negotiations in 2019 for the FY 2020 budget.
- Restrict the manufacturing machinery and equipment exemption from the sales tax by removing “production-related tangible personal property” from the exemption. To reach an agreement on the FY 2020 budget, in 2019 the Governor agreed to modify the manufacturing machinery and equipment exemption to include “production-related tangible person property” that was formerly exempted under the Manufacturers’ Purchase Credit. With this proposal, he goes back on that agreement.
- Eliminate the Blue Collar Jobs Act that was scheduled to be effective on January 1, 2021. To reach an agreement on the FY 2020 budget, in 2019 the Governor agreed to a new Blue Collar Jobs Act program that is designed to spur investment and creation of good paying blue collar jobs. With this proposal, he goes back on that agreement.
- Reverse the repeal of the Corporate Franchise Tax. To reach an agreement on the FY 2020 budget, in 2019 the Governor agreed to a gradual phase out of the Corporate Franchise Tax. With this proposal, he goes back on that agreement.
Here is additional information on other items listed under the “loophole” cuts:
- The Governor plans legislation to “align treatment of foreign source dividends to treatment of domestic source dividends.” The existing foreign dividend subtraction from the income tax has been in place for many years and is designed to avoid double taxation of items that are taxed by foreign governments. Depending on the specifics of his proposal, he could be proposing an unconstitutional tax.
- “Limit the corporate net operating loss to $100,000 per year.” Under Section 207 of the Illinois Income Tax Act, corporations that have no income in a tax year and have a loss are allowed to carry that loss forward to offset income in later years. Corporations are allowed to do this at the federal level and at the state level in Illinois, as well other states. Illinois law on net operating losses has been more restrictive than federal law since at least since 1987. This proposal would limit the amount of losses that can be used in a tax year to $100,000. This will hurt the very companies that have been hit hardest by the effects of the pandemic. We don’t know if this proposal will allow the restricted losses to be carried forward for use in later years or be eliminated. If the use of previously earned losses is eliminated, that proposal would likely be legally indefensible.
- Decouple from federal accelerated depreciation. Under the 2017 federal Tax Cuts and Jobs Act, purchasers of capital assets were authorized to take the cost of such a purchase in the year of acquisition as an expense, rather than depreciating the cost of the asset over the life of the asset. Illinois conforms to this federal change. The idea behind the federal change was to spur investment by businesses. The Governor proposes to somehow decouple from the federal treatment and we assume require the expense to be taken over the life of the asset. This change will place Illinois at a disadvantage vis a vis other states when a business is deciding whether to locate, relocate or expand in Illinois versus another state that follows the federal law.
- The Governor proposes to limit the retailers discount for the costs of sales tax collection to $1,000 per month. Illinois law recognizes, as do other states, that there are costs to retailers for collecting and remitting state and local sales taxes to the state of Illinois. Illinois law allows retailers to retain 1.75% of the taxes collected as reimbursement for the costs of collection. The Governor proposes to cap this discount at $1,000. He will likely make the baseless argument that costs of collection do not increase based on the size of the retailer. This is simply untrue.
- The Governor proposes to eliminate the sales tax exemption on the sales of biodiesel. Currently, biodiesel blends containing more than 10 percent biodiesel but no more than 99 percent biodiesel, 100-percent biodiesel, and majority blended ethanol currently receive a full sales tax exemption.
- Reduce the Illinois tuition tax credit program to a 40% credit for donations from 75%. The Governor campaigned on eliminating the tuition tax credit. This proposal, by reducing the tax credit to 40% of the amount of a donation from the current 75%, will likely have the same effect as an outright repeal by eliminating the attractiveness of making a donation. This will hurt both private schools and the low-income students that are able to attend private schools because of the scholarship program funded by the private sector through the tax credit.
Governor Pritzker also shared some future visions:
- Ethics reform
- Ban legislators from being allowed to lobby at the same time as being an elected official
- Initiate meaningful disclosure of conflicts of interest policy
- Eliminate immediate opportunity for legislators to become a lobbyist after ending service in public office
- Start a second cannabis lottery for licenses
- Pass an energy bill protecting our nuclear fleet and build up wind and solar options
Complete FY22 Budget Book: https://www2.illinois.gov/sites/budget/Pages/default.aspx
Link to the Full Text of Speech: https://b13a6d.p3cdn1.secureserver.net/wp-content/uploads/2021/02/Gov-Pritzker-Budget-Address_StateOfState-2.17.21.pdf
Former House Speaker Michael Madigan Announces Resignation
Today, Michael J. Madigan submitted his resignation as a state representative of the 22nd Illinois House district, effective at the end of the month. It came just more than a month after he was replaced as Illinois House speaker. He has served 36 years as speaker, and 50 years as a state representative.
Higher Education Agencies Encouraged by Steady Funding for Education
Despite budget woes stemming from the COVID-19 pandemic, Governor Pritzker recommended several increases for programs to increase diversity, equity, and inclusion in his budget address. State higher education leaders say they are grateful that Gov. Pritzker is continuing his commitment to higher education during these unprecedented times. Higher education funding for public universities and community colleges in Illinois would remain mostly flat for fiscal year 2022 as outlined in the governor’s budget address.
Overall, the governor’s budget proposal would put higher education funding in Illinois at $2.097 billion. Funding in this proposal would include:
• $1.158 billion for public universities
• $249 million for community colleges and adult education
• $28 million in additional dollars for MAP (total $479 million)
• $35 million (flat funding) for AIM HIGH
• $20 million in first-year funding for College Illinois!®
• $1 million in new money for the Common Application
• $250,000 in new money for strategic planning implementation.
IBHE also expects $8 million for community colleges and $12 million for IBHE from supplemental federal relief funds recently passed by congress. Illinois Board of Higher Education (IBHE) Executive Director Ginger Ostro said, “This budget is a ‘win’ for higher education during the COVID-19 pandemic. Additional dollars for programs like MAP and the Common App will help low-income students and students of color stay on their college path. Maintaining support for our higher education institutions provides stability at a time when so much is uncertain. We are grateful for Gov. Pritzker’s on-going investments in higher education, even during challenging fiscal times.”
“Gov. Pritzker’s commitment to access and equity have already helped bring MAP funding to a historic high, and MAP continues to be critical as students face increasing financial hurdles as a result of the pandemic,” said Illinois Student Assistance Commission (ISAC) Executive Director Eric Zarnikow. “The proposed increase of $28 million in MAP would help our low-income students as they try to keep up with rising costs and should allow us to reach new students as well. And for those students who will be attending school using College Illinois!® Prepaid Tuition Program benefits, the proposal to begin addressing the program’s shortfall with a first manageable payment honors the state’s commitments to these families and can help save the state money in the long run.”
“Despite ongoing economic challenges created by the worst health crisis of our lifetime, we are encouraged by Gov. Pritzker’s recommendation that funding for higher education, including Illinois’ community colleges, hold steady in fiscal year 2022. As the nation’s third largest community college system, more than half a million students use Illinois’ 39 community colleges for at least a part of their education each year. It is critical we continue to provide local educational opportunities for people of all ages to help better their lives and get our economy back on track,” said Illinois Community College Board (ICCB) Executive Director Brian Durham.
The Common App funding would make Illinois the first state with all public four-year universities using one application.
Governor Pritzker Announces Appointment of Sylvia I. Garcia as Director of the Illinois Department of Commerce and Economic Opportunity
Building on a strong team of diverse experts in their fields, Governor JB Pritzker named Sylvia I. Garcia to serve as Director of the Illinois Department of Commerce and Economic Opportunity (DCEO), pending confirmation by the Illinois Senate. Garcia replaces Erin Guthrie, who is stepping down from her role of director later this month to pursue an opportunity in the private sector, after serving as DCEO Director since the beginning of the Governor’s administration.
“I am thrilled to appoint Sylvia to serve as the next leader of DCEO – her professional background and knowledge across sectors will be a valuable asset to Illinois’ communities and working families as we build a strong economy that works for everyone,” said Governor JB Pritzker. “Erin Guthrie has worked tirelessly since the beginning of my administration to help our residents and small businesses succeed, and her commitment and work was especially critical throughout the COVID-19 pandemic. I thank Erin for her service to the state and wish her continued success in these next steps of her career.”
Garcia is a mission-driven leader with over 15 years of professional experience across different sectors. Garcia was previously a Principal Consultant at WSP, USA where she led a national practice area and advised on the creation of a partnership which identified federal policy opportunities to maximize local benefits and investment in underserved communities. Prior to that, she served as Chief Operating Officer and Chief of Staff at the Chicago Transit Authority (CTA), where she managed the day-to-day operations of the nation’s second largest transit agency with 11,000 employees, $1.5 billion annual operating budget, and $5 billion five-year capital plan.
“I am honored to serve as Director of the Illinois Department of Commerce and Economic Opportunity and want to thank Governor Pritzker for the opportunity to work on behalf of the state of Illinois,” said DCEO Director Sylvia I. Garcia. “I am committed to helping this administration grow a strong economy for our businesses, residents and communities and look forward to building on the successes of the past two years.”
Prior to CTA, Garcia served as Chief Financial Officer and Assistant Secretary for Budget at the United States Department of Transportation, where she managed the federal agency’s $70 billion annual budget and acted as chief liaison to the U.S. House and Senate on appropriations matters. In addition to her extensive government experience, Garcia has completed fellowships with Leadership Greater Chicago and the Presidential Management Fellowship. Garcia earned a Bachelor of Arts from the University of Michigan and Master of Science in Public Service Management from DePaul University.
Erin Guthrie has been at the helm of DCEO since 2019 and is the first Black woman to lead the department. During her tenure, Guthrie executed a number of programs focused on bringing economic development to underserved areas, expanding job training in growing industries and propelling growth of small businesses. Director Guthrie also led the launch of $1 billion in COVID-19 relief programs for small businesses and communities, including the historic Business Interruption Grants (BIG) program, which provided 9,000 grants totaling $275 million for businesses in every corner of the state.
“Over the past two years, DCEO and this administration have worked to expand economic growth, create thousands of jobs and increase access to tools for businesses of all types and sizes to grow and succeed here in Illinois,” said DCEO Director Erin Guthrie. “The onset of COVID-19 only strengthened our resolve to help businesses and workers, which is why we developed equity centric programs to help the hardest hit businesses and industries recover from the crisis. None of these achievements would be possible if it weren’t for the incredible vision and leadership of Governor Pritzker. I want to thank him for the opportunity to serve in the administration and congratulate Sylvia on her appointment. I look forward to working alongside her to ensure a smooth transition in the days ahead.”
Program Notices & Reminders
Upcoming Discussions with Illinois DCEO and SBA District Office
SBA Webinar with Stephen Konkle (SBA) and Joe McKeown (DCEO)
Please join the Illinois Department of Commerce and Economic Opportunity’s Office of Regional Economic Development and special guest Stephen Konkle with the US Small Business Administration for a webinar to learn more about the US Small Business Administration’s Federal Paycheck Protection Program and several others. This federal PPP forgivable COVID-19 Relief Loan Program will help Illinois small businesses keep their employees on payroll during this unprecedented time.
Date and time: Friday, February 19, 2021 1:00 PM / Register here:
https://illinois.webex.com/illinois/onstage/g.php?MTID=e6cb7f905fe4279663de1fc52e6efecb3
Discussion with DCEO Director, Erin Guthrie & SBA on PPP
Join this webinar to be a part of the discussion with DCEO (Department of Commerce and Economic Opportunity) Director, Erin Guthrie & the SBA (Small Business Administration) District Director, Robert Steiner on PPP (Payroll Protection Program) and other relevant topics.
Date and time: Wednesday, February 24, 2021 2:00 PM / Register here:
https://illinois.webex.com/illinois/onstage/g.php?MTID=edb0eb3245f936c3093c8c944f4132c27
SBA Page Links for Direction and Questions on PPP
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
1st draw info: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program/first-draw-ppp-loans
First draw app: https://www.sba.gov/document/sba-form-2483-paycheck-protection-program-borrower-application-form?utm_medium=email&utm_source=govdelivery
2nd draw info: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program/second-draw-ppp-loans
Second draw app: https://www.sba.gov/document/sba-form-2483-sd-ppp-second-draw-borrower-application-form?utm_medium=email&utm_source=govdelivery
Finally, please join the Joliet Chamber for a virtual conference with Mayor Bob O’Dekirk as he delivers a review of 2020, updates on present City of Joliet projects, and what to expect in the future. On Tuesday, February 23rd, Mayor O’Dekirk will deliver the annual State of the City Address at 11 am. Click here to register: http://jolietchamber.chambermaster.com/events/details/2021-webinar-state-of-the-city-address-6015
Stay well,
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Mike Paone
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct