We have some interesting news coming out of our state and federal capitols today regarding budgets, rules, aid, and of course vaccines. In addition, the Will County Health Department will be getting some needed financial assistance to help with the local vaccine rollout. We wrap up today’s message with seven possible initiatives to help small business.
*Daily Coronavirus update brought to you by Silver Cross Hospital
Pritzker won’t ask for income tax hike to balance budget
With a possible eye on his upcoming re-election campaign, Governor Pritzker has decided against proposing a widely expected hike in the state’s income tax as part of the fiscal 2022 budget outline he’ll unveil next week. However, the tax news is not all good. Illinois corporations, if not individuals, will be asked to bear a higher burden, with the governor proposing to close “corporate tax loopholes” worth $900 million a year.
According to a summary Pritzker’s office sent to reporters, the new budget will be balanced with a variety of devices, including more federal funding, some spending cuts and the loophole closing. “There is no question that this budget will include painful choices,” the summary says, neglecting to mention that those choices are needed because taxpayers in November rejected a proposed graduated income tax that would have brought in $3 billion a year.
“With the COVID-19 pandemic creating massive new hardship for families, small businesses and the most vulnerable,” it adds, “the governor will be proposing a budget that protects hardworking families from additional hardship—with no tax increase. Vital services . . . will be strengthened.”
The hole in the 2020 budget at one point amounted to roughly $5.5 billion, according to the Pritzker administration. It has since shrunk to $3 billion because state revenues have performed better than expected, allowing the state to repay $700 million of the $3 billion it borrowed from the U.S. Federal Reserve.
The remaining $3 billion hole will be filled with the closed loopholes, amounting to $900 million; continuing into a second year some of the $700 million in spending cuts that previously were offered for fiscal 2021; redirecting to the state’s operating account receipts from a cigarette tax that had been earmarked for capital projects, though a figure for that was not immediately available; and using some of the $3 billion in new money for schools, which the state received in federal COVID relief funds, to offset spending that would have to be paid by local taxes.
A list of those “corporate tax loopholes” was not immediately provided. Pritzker is scheduled to release his budget outline on Feb. 17. After the graduated income tax was defeated, he had strongly suggested he was likely to have to push to raise the existing flat tax.
The administration did not immediately say what it would do if it gets billions in additional proposed aid in President Joe Biden’s pending $1.9 trillion relief package. It did say Pritzker “looks forward to collaborating with the General Assembly to finalize a responsible state budget.”
Will County Board Approves Funds to Aid Health Department
In a special meeting yesterday, the Will County Board authorized a contract for a new COVID-19 call center to assist the Will County Health Department with their call response. The Health Department has been inundated with inquiries in the last few weeks from residents seeking information on COVID-19 vaccinations.
“The Health Department has been overwhelmed fielding calls from residents seeking information about the vaccine,” said County Board Speaker Mimi Cowan (Naperville). “The County Board has stepped in with extra funding to make sure residents get the information that they need and can get scheduled for a vaccination appointment.”
County Board member and Public Health and Safety Committee Chair Rachel Ventura (Joliet) emphasized that a lack of vaccine stock has hampered the immunization rollout throughout the state and made scheduling appointments difficult. “There is a shortage of vaccines in Illinois and nationally,” said Ventura. “This makes it very challenging to schedule appointments because the Health Department doesn’t always know when their next shipment will be delivered, let alone how many doses will be included.”
The County Board authorized the contract with Harris and Harris to operate a call center that will support the Health Department. Harris and Harris will be charged with fielding intake requests and providing follow up calls to remind residents of their appointment and when they can schedule their second dose. The contract will be for a six-month period costing $1.6 million. The county will use funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act that were distributed last year.
Harris and Harris operates call centers nationally and is expected to hit the ground running. County Board leaders expect the new call center to begin fielding calls as soon as the staff is hired and trained which could happen in the next week or two.
“Residents can expect better response times and follow up for scheduling and appointments when they call the health department,” said Cowan.
County Board members urge their constituents to register for their vaccination online at the Will County Health Department’s website, www.willcountyhealth.org or by calling the Health Department at 815-723-9713. Residents will be notified when there is vaccination available and it is time to schedule their appointment.
House Democrats Settle Direct Payment Debate Based on Income
House Democrats will move ahead with a coronavirus stimulus package that would keep the existing income limits for Americans who receive stimulus checks, while tightening eligibility for higher-earning Americans — a major win for progressives.
The plan, which was unveiled Monday night, would keep $1,400 stimulus checks flowing to Americans making up to $75,000 a year — rather than the $50,000 threshold that some moderate Democrats had proposed. It would, however, tighten eligibility for those making over $75,000 as an individual — a higher-earning group that previously qualified for smaller checks.
Couples making $150,000 would also qualify for direct payments, with that eligibility phasing out for earners making up to $200,000. Centrist Democrats had pushed to lower the threshold for joint tax filers to $100,000.
The details on the stimulus checks will be among the first tests of unity for Democratic leaders in Washington, under immense pressure to assemble a package that can garner support from nearly every one of its members.
The direct payments proposal — drafted by House Ways and Means Committee Chair Richard Neal (D-Mass.) — settles a debate that has been raging among the various ideological factions in the Democratic Party in recent days and threatened to derail the delicate negotiations before they were even fully underway.
State Senate Committee Hearing on COVID-19 Vaccine Rollout
On Monday, Senator Julie Morrison (D-Lake Forest) announced that the Senate Health Committee will hold a special hearing on Thursday regarding the state’s COVID-19 vaccination plan. “The COVID-19 vaccine is the greatest line of defense we have against the pandemic,” Morrison said in a Monday news release. “Unfortunately, many people across the state who are eligible for the vaccine haven’t been able to get their dose – and that’s disheartening.”
The release said that the hearing has been scheduled amid “hundreds of questions and concerns from constituents” regarding the rollout of the vaccine, citing a “confusing” scheduling process. “I hope this hearing will lead us toward a path of greater efficiency,” Morrison said in the release.
The virtual hearing, scheduled for noon on Thursday, will feature Illinois Department of Public Health Director Dr. Ngozi Ezike, as well as representatives from the Chicago and Sangamon County Health Departments. The hearing will also include Walgreens and CVS pharmacies, the two companies responsible for issuing COVID-19 vaccines at long-term care facilities through the federal government’s Pharmacy Partnership Program. So far, 212,256 doses out of 496,100 allocated vaccines have been issued at long-term care facilities.
According to the news release, the subject matter hearing will focus on frequently asked questions and concerns regarding the rollout and supply of the COVID-19 vaccine and aims to “help vaccine distribution become more convenient and readily available.”
The hearing will be streamed on the General Assembly’s website, ilga.gov. The Senate is also accepting written testimony from members of the public.
Illinois House Releases New Rules
Rules that govern the legislative process in the Illinois House of Representatives were released Monday night, and the first thing that pops out is term limits for the House speaker — and minority leader. The proposal states those top leaders can serve only five General Assemblies (10 years).
The rules changes were filed by Majority Leader Greg Harris and will be voted on when House lawmakers meet in Springfield tomorrow.
The other big change: the rules also allow for remote legislating — something the state Senate has been doing for months. This change will clear lawmakers to call into committee hearings and task force talks.
And according to the resolution, bills that are sent to the Rules Committee must get reported out to a subject matter committee for debate. “A lot of people say bills go to the Rules Committee to die. And that’s not going to happen anymore,” Harris told Playbook. “It’s a big improvement.”
7 Ways Washington Can Help Small Businesses Now
The number of open small businesses has decreased by a third since January of 2020. Any small-business recovery is going to depend largely on the speed of vaccine distribution, the ability of entrepreneurs to think creatively, and the availability of appropriate financing. With a new administration and a new Congress, here are a suggested seven initiatives to help small companies regain their status as a force for job creation.
1. Forget more debt: Give grants to microbusinesses
Many entrepreneurs aren’t comfortable taking on more debt, no matter how generous the repayment terms. They need grants to help them through the winter and spring. As crushing as the pandemic is, it’s not going to last forever. If an entrepreneur had a good business in 2019, they should have the opportunity to have a good business sometime in 2021, too. Let’s get them through the next few months without asking them to drown in debt.
Community development financial institutions, or CDFIs, are the most sensible way to distribute small grants, and President Biden’s proposal includes $15 billion for just this purpose. In Pennsylvania, CDFIs administered the state program to make grants to small businesses hurt by Covid-19, says Dafina Williams, vice president of public policy at Opportunity Finance Network, the national association of CDFIs. CDFIs are already working with the smallest businesses, often in underserved areas, and are prepared to offer technical assistance as well as financing.
2. Loosen restrictions on PPP money
A business that has partially shut down, or changed its model to run with fewer employees, is going to have a hard time getting a PPP loan forgiven. That’s because even the newer version of the program requires that 60 percent of the money be used on payroll. Let’s not micromanage entrepreneurs. These people know what they’re doing and know what they need to get their businesses back on their feet. Let’s let them use the money for any legitimate business purpose and get them on the road to recovery.
3. Make the SBA a more powerful source for growth capital
The Small Business Administration’s flagship 7(a) program guarantees up to 85 percent of loans for amounts up to $5 million. Let’s let the SBA play a larger role in the recovery and incentivize banks to make more loans through the SBA. We can start by raising the loan cap to $10 million and boosting the guarantee rate. For loans of more than $150,000, the guarantee rate is only 75 percent, so let’s get the rate to 90 percent for all SBA-backed loans.
Let’s also get rid of borrower fees, or at least cut them dramatically. The fees vary based on the size of the loan, but for a $150,000 loan, the borrower pays $2,250 (in addition to interest, of course); for a $5 million loan, the entrepreneur pays $138,125.
4. Institute an employee-addition tax credit
The Cares Act instituted an employee-retention tax credit to encourage companies not to lay off their workers. But right now, we need small businesses to actually grow their payrolls. Unfortunately, companies in effect pay a tax penalty every time they add a new employee. Let’s get them a tax credit instead.
5. License smaller SBICs
The Small Business Investment Company program provides public money to match money raised by private investment funds. The money can be used to fund small businesses in a variety of ways, including both equity and debt. Any losses are absorbed by the private money first; historically, the SBA has run a modest profit on the program. Right now, SBICs seldom invest less than $1 million at a time. Some changes could help them invest in a wider range of smaller companies that also need help.
In theory, if you can raise $5 million and have run a fund before, you can apply for an SBIC license. In reality, the SBA has been hesitant to license funds smaller than $20 million, says Brett Palmer, president of the Small Business Investor Alliance. With the SBA match, that yields a fund of up to $60 million. And the bigger the fund, the bigger the check size. The larger fund size makes it very difficult for SBICs to invest less than $1 million at a time–and many small businesses much need less. “You need to allow more smaller funds to form, because they’ll do smaller investments,” says Palmer.
The SBA should license smaller funds and consider removing the rule that investors needed to have run a fund before. That sounds like a common-sense requirement, but it ensures that most SBICs are run by people who are White and male, says Palmer. Allowing successful entrepreneurs to run funds could diversify SBICs and get money to more diverse communities.
6. Extend the FFCRA
The Families First Coronavirus Relief Act mandated that small companies offer paid sick leave to employees affected by Covid-19, and then gave them the money back via tax credits. It was supposed to expire at the end of 2020, but was extended until the end of March. It also was changed from a mandatory program to a voluntary one.
FFCRA is not perfect, especially if you can’t use the tax credit. But right now it’s the only mechanism we have in which the federal government supports paid sick leave in any way. Sick employees should be able to stay home without also worrying about the pay they’re losing. That’s always true, but it’s especially important now. Let’s extend the FFCRA at least through the end of the year.
7. Provide interest-free loans for landlords
For Main Street businesses that have been gutted by the pandemic, rent can be just as big a worry as payroll. You can ask employees to go on unemployment or try to get them paid through the Paycheck Protection Program. But eviction moratoriums for businesses have mostly expired, and most landlords have limited flexibility to negotiate with tenants because of the covenants in their own bank loans. Let’s ask Treasury to provide interest-free loans worth three months of rent to landlords that agree to rent moratoriums for that same period. That would help small businesses and small landlords.
Program Notices & Reminders
Join the US Chamber of Commerce on Thursday, February 11, at 12 PM ET for the first episode of CO— Roadmap for Rebuilding: Starting a New Business, an interactive discussion focused on giving you the information and insight you need to start up smartly and smoothly, even under tough conditions. RSVP here: https://events.uschamber.com/COStartingaNewBusiness?utm_medium=Email&utm_source=SFMC&utm_campaign=MO_Newsletter&utm_content=2021-02-04&i=NwZEz7aSH9wgs-lRKEBhD5D_oCWot-_z
Illinois DCEO’s Office of Regional Economic Development
Join DCEO for a webinar to learn more about the US Small Business Administration’s Federal Paycheck Protection Program (PPP). This federal forgivable COVID-19 Relief Loan Program will help Illinois small businesses keep their employees on payroll during this unprecedented time.
Date: February 10, 2021
Time: 10:00 am
Presenter: Tracey Glenn, Southwest Regional Manager for Regional Economic Development, Illinois Department of Commerce and Economic Opportunity
Registration Link: https://illinois.webex.com/illinois/onstage/g.php?MTID=edf5666e7f568ba6b693af980d224e132
Date: February 11, 2021
Time: 2:00 pm
Presenter: Joe McKeown, Northeast Senior Account Manager for Regional Economic Development, Illinois Department of Commerce and Economic Opportunity
Registration Link: https://illinois.webex.com/illinois/onstage/g.php?MTID=ed0fa7b16a8d5532fecc820656415fd48
SBA Page Links for Direction and Questions on PPP
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
SBDC at JJC Update
Quick Books (with Annette Szobar)
February 10th 2pm
Learn why keeping track of your finances is important, what information can you get from QuickBooks, and which version should you get! Join independent entrepreneur and small business expert Annette Szobar who will help you solve your QuickBooks problems.
SEO (with Jason McCoy)
February 17 at 2pm
More consumers are doing research and shopping online than ever before due to circumstance, convenience, and cost. Businesses that wish to remain relevant and profitable need to adapt to the shift in consumer behavior. Creating optimized content for your website that will deliver interested consumers is critical now more than ever. Crafting a Search Engine Optimization (SEO) plan is imperative and second only to building a website in ‘getting your business online’.
Starting Your Business in Illinois
February 23rd at 11am
Thinking about starting a business in Illinois? This informative workshop helps entrepreneurs understand many of the steps and requirements. In this no-cost overview of Starting Your Business in Illinois, we will touch on many aspects of your business plan, including legal, accounting, banking, marketing, and sales.
Starting Your Business in Illinois Webinar (ecenterdirect.com)
Finally, we would like to ask that you take a few minutes to fill out a new survey that we’ve put together. This member survey is intended to gather feedback on the continuing issues, opportunities, and perceptions based around covid, the economy, and your business.
As we move forward during the pandemic and shifting political landscapes, please share your feedback so that we can best serve our membership.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry