It was nice to see everyone that came out to our open house yesterday afternoon. So many comments on the good feeling of getting back to networking in person. Here’s the last update for the week and the month of April.
See below for information and make sure you read all the way through to see the announcement of our May member luncheon!
*Daily Coronavirus update brought to you by Silver Cross Hospital
Comment on Joliet Intermodal Master Plan by May 17
Will County and the City of Joliet have developed the Joliet Intermodal Master Plan for the Elwood/Joliet subregion of Will County. The plan’s purpose is to identify transportation needs that support anticipated development of the area’s intermodal industry while simultaneously working to improve quality of life for area residents. The study area boundary is Interstate 80 on the north, U.S. 52 on the east, West Hoff Road on the south, and Interstate 55 on the west.
Public input is being sought on the draft Transportation Improvement Program that identifies transportation priorities. All members of the public are invited to comment through Monday, May 17. Visit the Joliet Intermodal Master Plan website, and provide your input on the public involvement section of the webpage.
Illinois Pays Down Bill Backlog, but Is It All Good News?
It’s “good news, absolutely” as Taxpayers Federation of Illinois President Carol Portman puts it. “But it’s not ‘out of the woods’ good news.” Portman’s reference is to an overlooked but eye-catching report issued yesterday by Illinois Comptroller Susana Mendoza indicating that the state’s backlog of unpaid short-term bills has dropped to around $3.5 billion, a bare fraction of the near $17 billion it hit under former Gov. Bruce Rauner and the lowest it’s been since at least the Blagojevich administration.
As of this morning, the figure had dropped another $100 million or so, down to $3.39 billion, meaning the state essentially is on schedule to pay most bills within 30 days of receipt, the normal good financial practice. But looking at the details on how we got there indicates the picture is probably not quite as rosy as it seems. And both Mendoza and Portman agree that, long-run, the state still has a recurring structural deficit, with underfunded pension systems in particular a little weaker because the state still isn’t contributing what actuaries say is needed.
First, the good news. According to Mendoza, the key to the turnaround in the state’s current account balance were two borrowings, notably $6 billion Mendoza was able to get through the Legislature despite opposition from Rauner. The borrowing meant ordinary bills that paid 12 percent interest to vendors and others waiting to be paid was swapped out for a bond issue that cost taxpayers a small portion of that, roughly 3.5 percent. Over the 12-year term of the borrowing that trade alone will save Illinois taxpayers $4 billion to $6 billion, Mendoza said.
Then there’s what she did with the money. “Our first priority wasn’t to spend it,” Mendoza told me. “The priority was to use it to pay Medicaid bills.” Since Medicaid is partly funded by the federal government, the state is partially reimbursed when it spends its own money on physicians, hospitals, and other Medicaid providers. That means the $6 billion attracted roughly $3 billion in additional federal dollars, money state taxpayers did not have to provide.
A smaller amount of short-term borrowing last year was used the same way, Mendoza said. Combined with peppier than expected revenue from state income, sales, and other taxes—revenues were up 10.6 percent, or $2.54 billion, in the first nine months of fiscal 2021—the bill backlog has dropped. And that’s before receiving any of the expected $7.5 billion from the latest federal COVID-stimulus bill.
On the other hand, the cost of paying off that Rauner-era bond issue is new to the state’s balance sheet. It’s $4.5 billion in principle that still needs to be repaid. Beyond that, both Mendoza and Portman agreed, the state still is running an annual structural deficit of $3.5 billion, largely because pensions are underfunded, running up long-term state liabilities.
Mendoza said for that reason alone it’s unfortunate taxpayers didn’t approve Gov. J.B. Pritkzer’s proposed graduated income tax in November. There’s also a lost opportunity cost because the lack of that money has stopped the state from investing in important things, such as boosting aid to public grade and high schools, Mendoza said.
Portman agreed that has a cost, indirectly putting pressure on local school districts to keep their property taxes high. “But it depends,” she said. For those who think the state needs to live within its means, the ability to draw down the bill backlog without hiking taxes may be significant. “There’s definitely an argument to be made that we can service our debt without extra money.”
Meantime, if you or your company sell products to the state, you ought to be getting your money without delay now. That represents at least some progress.
Earmark Requests Headed for Scrutiny as Deadline Approaches
House appropriators will begin sifting through thousands of earmark proposals next week, kicking off an arduous process that will mark the first time in a decade that subcommittee chairs have had the power to steer federal dollars to specific projects in lawmakers’ home states and districts.
Exactly how they will dole out the limited pot of money is murky, leaving watchdog groups and skeptical lawmakers concerned that even with new transparency mechanisms in place, leaders could use “congressionally directed spending” to buy votes, reward party loyalists or bolster vulnerable members’ campaigns at the expense of more worthy projects.
Groups tracking the process expect a few bumps during the first year but say the pressure is on congressional leaders and appropriators to ensure that small issues don’t turn into problems that erode public confidence in the whole endeavor.
“I think they recognize the spotlight is going to be on them and if they trip up, particularly early on, it’s going to contaminate the whole thing and maybe undercut bringing back earmarks,” said Steve Ellis, president of Taxpayers for Common Sense. “So I do think they are going to be bending over backwards to make sure that it looks equitable.”
Earmark requests are due to the House Appropriations Committee by the end of this week, with senators submitting their proposals later this year. The new process caps earmarked funds at 1 percent of discretionary spending, limits the accounts eligible for earmarks and requires members to post their requests online.
Members must certify that neither they nor their immediate family members have any financial interest in the project, and for-profit entities are not eligible for the funding. The Government Accountability Office is also tasked with auditing a sample of the earmarks every year and submitting a report to Congress.
The House process limits members to 10 project requests. Senate procedure includes a point of order against adding new earmarks to a conference report and requires that earmarks be posted online at least 48 hours before a floor vote on a conference report.
How much money goes to each side of the aisle is also up in the air. A bipartisan, bicameral ban on earmarks was originally instituted in 2011 after years of scandals that sent some members to prison and led others to grow frustrated by a system that often rewarded long-serving members and not those with more urgent projects.
During the past decade, members of both parties have advocated a return to a more controlled and transparent process for delivering what supporters have now branded “community project funding.”
Members who support earmarks argue that it’s Congress’ constitutional prerogative to determine how much the federal government spends and where those dollars go. They also say lawmakers know their communities better than unelected federal employees who may have never been to their region of the country. Skeptical lawmakers, including dozens of conservative Republicans, say it’s a return to the “bad old days.”
“I am strongly opposed to going back to the bad old days of earmarks. It was extremely wasteful, it was often corrupting, it was the currency that was used to buy votes on bad legislation,” Sen. Patrick J. Toomey, R-Pa., said earlier this month. “So there are a lot of reasons why I think we should not go back.”
Watchdog groups are similarly concerned that issues that stymied the earmarking process before the ban could reemerge despite leaders’ attempts to more tightly control the process. “Our concern has always been about conflicts of interest and unfair earmark distribution and the way that can lead to money being spent in a wasteful or fraudulent manner,” said Lisa Gilbert, executive vice president of Public Citizen. “I think the problems could happen if members or senators find ways to circumvent the financial interest safeguards,” Gilbert added. “That’s going to be an issue we’re going to watch closely.”
Update on President’s Plan – Only couples making more than $509K would see tax hike & monthly stimulus checks for four more years
President Biden’s proposed top income tax bracket of 39.6 percent would impact single filers with income above about $453,000 and married couples with income above roughly $509,000, a White House official said.
Biden is proposing as part of his American Families Plan to raise the top rate to 39.6 percent from 37 percent, bringing the rate back to where it was prior to the enactment of former President Trump’s tax law. The details about the income thresholds for the 39.6 percent bracket provide further clarity about how Biden’s pledge to not raise taxes on taxpayers making under $400,000 would work.
“Consistent with the President’s campaign proposal, we are proposing to reverse the tax cut for the top bracket by returning that top tax bracket to what it would’ve been under pre-2017 law,” a White House official said in a statement. “That applies to less than 1 percent of Americans — the very top earners.”
“In 2022, those pre-2017 brackets are expected to be about $452,700 in taxable income for a single individual and $509,300 in taxable income for a married couple,” the official added. “That means if you are a married couple earning up to $509,300 — you will not see a dollar increase in your taxes.”
In 2017, the last year before Trump’s tax law took effect, taxable income above $418,400 for single filers and $470,700 for married couples was taxed at the 39.6 percent rate. The income thresholds for tax brackets are adjusted annually for inflation. The current top tax rate of 37 percent applies for 2021 to income above $523,600 for single filers and $628,300 for married couples.
It’s unclear whether Biden’s proposed top tax rate, and the related proposed income thresholds, will ultimately be enacted. Lawmakers have not yet released legislative text based on Biden’s proposals, and it’s possible that some Democratic lawmakers could have concerns with the president’s proposed bracket.
Millions of Americans will get a monthly stimulus check for at least four years, if President Biden’s vision for his ‘American Families Plan’ that he just presented during Wednesday night’s joint session of Congress comes to pass.
Those checks would represent an even greater expansion of the already-expanded federal child tax credit, which was made possible by last month’s $1.9 trillion coronavirus relief legislation. The 1-year expansion of the tax credit under that bill provided for up to $3,600 per eligible child in stimulus checks, spread out over monthly payments (starting this July). As we noted earlier on Wednesday, a group of House Democrats has called on President Biden to support making these payments permanent — meaning, millions of families would get a stimulus check of at least a few hundred dollars essentially forever.
As we’ve recapped a few times now, here’s what the current extension of the federal child tax credit does: If you’re part of a married couple earning $150,000 in total or less, or if you’re an individual taxpayer making $75,000 or less, you’ll get $250 for each child between the ages of 6 and 17 from July through December, for a total of $1,500 (6 months x $250). You’ll get $300 for each child under the age of 6. The balance of the $3,600 will come as a tax credit next year. Biden now wants to stretch this out through at least 2025, so now that takes the monthly stimulus checks that families are about to start receiving in July and multiplies them fourfold.
These greatly expanded monthly stimulus checks, believe it or not, also don’t even scratch the surface of the sprawling mix of benefits that Biden’s American Families Plan envisions. His vision for the federal government, as he laid it out Wednesday night, calls for everything from the tax credit expansion mentioned above to greater access to Medicaid, paid family leave, free community college tuition, and much more. He will run into a buzz saw of opposition in Congress, though, because those benefits can only be made possible by — what else? Raising taxes (on the wealthiest Americans). That’s something Republicans will unite almost in compete unison against, and something that makes certain Democrats wobbly, as well — which could be problematic for the president, since Democratic control of the US Senate is already razor thin at the moment.
Lawmaker Demands Illinois’ Unemployment Offices Reopen Immediately
A state representative demanded the state’s unemployment offices under Gov. J.B. Pritzker be reopened immediately. His demand was met with applause in the House chamber on Wednesday.
Offices around the state for the Illinois Department of Employment Security have been closed for more than a year. “There have been very credible threats of violence against our agency offices and our office staff,” IDES Acting Director Kristin Richards told lawmakers in February. “One of these very public incidents was when a trailer hitch was thrown through our Springfield location on 9th Street.”
In March, she still wouldn’t say when the offices would open back up. Richards said the department is installing plexiglass and getting appropriate PPE with a goal to get to a “steady-state,” she said, without providing a date. Richards also said the department is budgeting for virtual appointments.
“[There are] reports from other states where they have lines waiting outside of unemployment offices of eight to ten hours and we do not want to do that,” Richards said. “And so I think if virtual appointments, appointment setting is a solution, it’s certainly something that we’re going to explore.”
On Wednesday on the House floor, state Rep. Joe Sosnowki, R-Rockford, said it’s time to open the offices back up immediately. “Why are our unemployment offices in the state of Illinois still closed,” Sosnowski said. “It is now almost the month of May 2021, and our unemployment offices around the state are closed. I don’t believe this is a political issue. I know members on both sides of the aisles have the same concern.”
He said his House Resolution 226 has bipartisan support “asking that our unemployment offices be opened immediately.” “This is a governance issue, this is a leadership issue, this is not a political issue,” Sosnowski said.
Messages seeking comment from the governor’s office were not immediately returned. A spokesperson for IDES also didn’t immediately respond when asked for a date to reopen, or why the offices remained closed. The IDES system has been plagued with backlogs, reports of fraud, and looming questions of how employers’ unemployment insurance taxes will be impacted by the historic costs.
“Proof is in the pudding,” Sosnowski said as he praised Illinois Secretary of State Jesse White for having had their offices open to the public. “They run a great office,” Sosnowski said of driver services facilities. “Their offices have been open since last May, serving thousands of people at different locations around the state. Our unemployment offices need to open today.”
Pritzker Considering Vaccine Requirement for Students Returning to State Universities
Students returning to public universities in Illinois might need to receive their COVID-19 vaccination before they’re allowed to return to campuses this fall, but it’s up to them — for now. Gov. J.B. Pritzker’s health team has already deployed mobile vaccination units to many state schools to encourage inoculations, but he didn’t rule out a statewide mandate Wednesday as vaccine demand starts to wane across Illinois.
“We want everybody to get vaccinated, there’s no doubt. As to whether we would require people to get vaccinated in order to come back on campus, that’s something that’s under some discussion around the nation,” Pritzker said during an unrelated news conference at Heartland Community College in downstate Normal.
Some private universities have already announced vaccine requirements, including three in Chicago: Columbia College, DePaul University and Loyola University Chicago. The public university system in Massachusetts announced a mandate earlier this week.
For now, though, Pritzker wants to see students make that choice for themselves. “What we want right now is for people to raise their hand and say, ‘I want to get vaccinated.’ And unlike two months ago, those vaccinations are available now,” Pritzker said. “If you want to get vaccinated, essentially over the next two weeks and beyond, you’re going to be able to raise your hand and go somewhere today to get vaccinated… So we’re encouraging students on campuses, these are young adults really, to choose to get vaccinated.”
Program Notices & Reminders – Expanded Information
Small Business Administration Restaurant Revitalization Fund
The SBA just announced that it will begin advanced online registration for businesses that wish to apply for a Restaurant Revitalization Fund (RRF) grant this Friday (4/30) at 9 a.m. ET. Online applications for the program will open on Monday (5/3) at noon ET. Once you register on Friday, you can get ahead of the application process by downloading the SBA’s sample application, which will help you prepare your documentation. Get more information about the RRF grant program, including eligibility requirements and the types of expenses the grant can be used to pay, here.
Please join the Illinois Department of Commerce and Economic Opportunity’s Office of Regional Economic Development for one of these upcoming webinars to learn more about the US Small Business Administration’s Federal Restaurant Revitalization Fund. This program is designed to provide assistance to restaurants, bars, food trucks and other similar places that serve food or drink.
Presenter: Kim Watson, Southern Region Senior Account Manager of Regional Economic Development, Illinois Department of Commerce and Economic Opportunity with Darrah Perryman, U.S. Small Business Administration
Date and Time: Wednesday, May 5, 2021 at 12:00 pm CST (Chicago, GMT-05:00)
Register Here: https://illinois.webex.com/illinois/onstage/g.php?MTID=e2e09f02802d5e93c11b7796b4f06acc7
Presenter: Tracey Glenn, Southwest Regional Manager of Regional Economic Development, Illinois Department of Commerce and Economic Opportunity with Darrah Perryman, U.S. Small Business Administration
Date and Time: Thursday, May 6, 2021 at 3:00 pm CST (Chicago, GMT-05:00)
Register Here: https://illinois.webex.com/illinois/onstage/g.php?MTID=ebc9484f1ce1a446c702f7025b5aaab6d
As the SBA builds and prepares to roll out the program, this dedicated SBA website is the best source for up-to-date information for eligible restaurants interested in the RRF.
Small Business Administration Shuttered Venue Operators Grant Program
The SBA has completed rigorous testing and the Shuttered Venue Operators Grant application portal reopened on Saturday, April 24 at 12:30pm ET. Updated guidance documents have been posted below. Applicants may continue to register for an application portal account.
- FAQ regarding Shuttered Venue Operators Grant
- SVOG preliminary application checklist
- Cross-program eligibility on SBA COVID-19 relief options
- SVOG-specific version of IRS Form 4506-T
- SVOG applicant user guide
Finally, make plans to join us for our May member luncheon on Thursday, the 13th and meet Dawn Malec, Chief of the Joliet Police Department and Greg Blaskey, Chief of the Joliet Fire Department. For more info and to register, click here – http://jolietchamber.chambermaster.com/events/details/2021-member-lunch-may-13-meet-greet-with-joliet-police-fire-chiefs-6046
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry