Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
The application for the $250 million State of Illinois Back to Business (B2B) Grant Program is now open! B2B offers small businesses access to funds that can help offset losses due to COVID-19, bring back workers, and continue to rebuild from the pandemic.
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Illinois General Assembly Back to Work?
Illinois House lawmakers are considering a return to Springfield the week of Aug. 30 to draw up congressional district maps now that official U.S. census data has been released showing the state’s population has dropped by 18,124 people from 10 years ago.
Democratic representatives were sent a note surveying their availability during the week before Labor Day “in the event that we decide to amend the legislative redistricting plan,” chief of staff Tiffany Moy wrote in the email forwarded to Playbook. (A return also might allow the controversial energy bill to get attention, if lawmakers can work out the kinks.)
“Our experts and attorneys are still analyzing data,” Jaclyn Driscoll, a spokesperson for the House speaker, told the Sun-Times’ Rachel Hinton. “We’re just proactively reaching out to get a sense of schedules.”
Republicans say they haven’t seen any drafts of what the congressional maps might look like, but there’s an expectation that Rep. Adam Kinzinger’s seat could be erased, according to a few Republicans and some Democrats who are in Springfield for this week’s political rallies at the fair.
Democrats are doing everything they can to hold onto a majority in the U.S. House during next year’s midterms. There’s already a move to adjust Rep. Rodney Davis’ 13th District to be solid blue and he’ll have a formidable candidate in Democrat Nikki Budzinski. And edging out Kinzinger would make Underwood more secure after she eeked out a victory last year.
Until he knows otherwise, the 16th District Republican who’s been outspoken about his opposition to Donald Trump is continuing to raise money and campaign like he’s in the hunt. Should his district get pulled into Rep. Lauren Underwood’s area, it’s not clear what Kinzinger’s next move might be in the political world.
Bye, Bye Byron? Exelon Prepares to Shutter Illinois Nuclear Plants
Illinois legislators may be back in Springfield soon for another summer special session, to try once again to pass a massive energy package that thus far has proven elusive. The result – be it passage of a new law, or a continued stalemate — will impact everything from Illinois’ role in climate change to your energy bill. But the stakes are particularly high in one northern Illinois town.
Byron, Illinois – about 11 miles outside of Rockford — has had various identities since its founding in 1849. It’s been home to canning plants, railroad stops and a milk depot. Mayor John Rickard says all of those have come and gone. But since 1985, Byron has had a new identity: It’s home to a pair of nuclear generators.
At full power, Byron’s nuclear plant is pumping out enough energy to power some 2 million northern Illinois homes. But Byron’s power is literally running out. “This particular plant has a fixed amount of fuel loaded in it and that was loaded 18 months ago,” said Exelon Executive Vice President and Chief Generation Officer Bryan Hanson. “That fuel is losing energy. In fact I think in the next couple of days we’ll start to see the reactor lose its power, from 100% power it will slowly trickle down to about 70% power, then the plant shuts down on Sept. 13.”
That’s an important date. Nuclear plants have to refuel from time to time; at Byron, a reactor is temporarily shut down to refuel every 18 months. But Exelon has already given notice to regulators that it may not refuel and may in fact retire the Byron plant completely.
That’s a big deal. If you don’t put more gas in the car when the tank’s nearing empty, you can wait and fill it up later. When you’re dealing with radioactive nuclear fuel rods, it’s not so simple. “We’re preparing right now to shut down these reactors forever,” Hanson said. “That means shutting the plant down, turning the turbines off, the generators off, shutting down the reactor.”
Mayor Rickard says Exelon pulling the plug on the plant would be devastating for Byron and the entire region. Byron’s population has more than doubled since the generators were built, from about 1,200 to 3,800. “We feel like we’re pawns in a game we can’t control,” Rickard said. “The discussions in Springfield we don’t seem to have any influence on anymore. We’re kinda sitting here going ‘do you realize what you’re doing to us?’”
Christine Lynde is president of the Byron school board. Her youngest daughter just graduated from Byron High School. “To do nothing is to condemn this town, our school district,” Lynde said. Lynde has taken on double duty since Exelon announced in August 2020 that it was considering early retirement for the Byron plant; she’s also part of the Byron Station Response Committee, which is fighting to keep the generation station open.
Property taxes from the nuclear plant comprise a whopping 74% of the district’s budget — some $19 million that would be difficult, if not impossible, to replace. The next few weeks will determine whether it’s a reality Byron will have to face.
Exelon executives say they have no choice, and they’re preparing employees at the station for that possibility. “People are skeptical about Exelon and if they’re really serious about what’s going to happen and I can tell you they are,” said Exelon Electrical Maintenance Department Manager Jon Banzhaf, a father of three who said if Byron did close, he would likely have to move in order to get a job at another nuclear plant.
The Chicago-based corporation has 21 reactors at a dozen sites nationwide. Nearly half are in Illinois. Due in part to energy market particulars and cheap natural gas prices, Exelon says its Byron and Dresden stations are losing money. It’s not just Exelon that says so. The state commissioned a study and found that while they could be profitable in the future, “Byron and Dresden do face real risk of becoming uneconomic in the near term.”
Exelon is moving to close them (in energy parlance, “retire” the plants, decades ahead of their scheduled retirement) unless the Illinois legislature comes through. A proposal floated in the statehouse would have ratepayers — as in, anyone who uses and pays for electricity in Illinois — pay a subsidy to keep them open. It would take the form of an extra charge on your electric bill, worth nearly $700 million, that Exelon would use to keep the plants open for at least the next five years.
It’s a big ask and it’s a new phenomenon not singular to Illinois, as nuclear companies in deregulated energy markets like Illinois’ put their corporate hands out, and as states look to reduce their greenhouse gas emissions. The still-in-the-works energy package Illinois lawmakers are contemplating also has a goal of moving to 100% energy from renewable sources by 2050.
“Right now the markets pay a megawatt of electricity the same whether it’s carbon free or whether it came from the dirtiest coal plant in the United States, “Hanson said. “There’s no difference. We’re polluting the environment without any consequence on the revenue, so therefore we should be designing market solutions and until we have market solutions, we’re asking politicians to dive into the energy market and help pick winners and losers.”
Exelon says the uptick customers will pay to keep these plants open is less than the spike you’ll see on your electric bill if the nuclear plants are allowed to retire early. But the Illinois Chamber of Commerce is skeptical of another Exelon bailout.
“We become very concerned when a profitable company seeks to lock in profits through the Illinois General Assembly, when those profits are going to be paid for by ratepayers,” said Alec Messina with the chamber’s Energy Council. And critics of nuclear energy say Exelon’s threats are akin to ransom.
“Exelon first started what we’ve dubbed the nuclear hostage crisis. It’s a pattern where a utility will for whatever reasons threaten closure, which gets the workers very upset, then the local community whose tax base depends on it gets upset, they pressure their legislators, and then the legislators grant bailouts,” said Dave Kraft, head of the Nuclear Energy Information Service.
Kraft said rather than continuing to support nuclear energy, Illinois needs to redouble its commitment to wind and solar. Despite those criticisms, Gov. J.B. Pritzker is on board with the Exelon subsidy.
It helps the Exelon portion of the broader, omnibus energy plan has the backing of labor unions (hundreds of unionized pipefitters, boilermakers, teamsters, electricians and carpenters are hired by the plant every time a reactor is refueled) as well as environmentalists, who see nuclear energy as a carbon-free path as wind and solar are built up. But labor and backers of renewable energy remain divided over the deadline for phasing out energy plants fired by carbon-emitting coal and natural gas.
That’s the main impasse preventing passing of an energy law that would not only bailout Exelon, but would also prop up renewable energy and give the state additional oversight of utilities like ComEd.
Pritzker Noncommittal on Evictions Moratorium
Gov. JB Pritzker didn’t directly say whether he would extend the state’s evictions moratorium for those facing hardships due to the COVID-19 pandemic as cases, deaths and hospitalizations for the virus continue to rise. “We’ve looked at that, we continue to look at it. We’ll make a decision about that soon,” Pritzker said at an unrelated news conference in Springfield when asked if he would extend the moratorium, which is set to expire at the end of the month.
The governor’s comments come as COVID-19 intensive care bed utilization has increased by 290 percent on a weekly average since July 11. Positivity rates and death counts also continue to rise, although vaccinations have picked up in recent days as well.
When it comes to evictions, Illinois courts are under a Supreme Court order until Sept. 1 allowing for the filing of eviction claims but staying certain final trials and judgements. Pritzker’s current disaster declaration and associated eviction moratorium is due to be renewed or expire on Aug. 21.
Lawmakers want Pritzker to ask gaming board to award license for south suburban casino
Five south suburban lawmakers recently signed a letter urging Gov. J.B. Pritzker to use his power to compel the Illinois Gaming Board to award a license for a south suburban casino. Delays in choosing a licensee from among four applicants are hurting local residents and business owners, legislators wrote.
“Your constituents in south suburban Chicago have suffered many hardships in the last two years, but none may be worse than the failure of their own government to act on legislatively sanctioned proposals to create new jobs, higher incomes and more robust local economies,” they wrote. State Rep. Anthony DeLuca, D-Chicago Heights, chair of the House Cities and Villages Committee, wrote the Aug. 11 letter.
“We’ve recently witnessed the amount of power the governor has,” DeLuca remarked. “With a signature, you can close down a private business, you can require masks at schools.”
Lawmakers, municipal leaders and others in the Southland are frustrated by the state’s glacial pace toward making a south suburban casino a reality. “Please spur IGB into action,” lawmakers wrote. “Every day that we delay the casino project in the Southland — where annual household incomes range as low as $27,000 — means another day that families in our area are denied chances to win better jobs and better incomes.”
Democratic state Reps. Marcus Evans and Nick Smith of Chicago, Bob Rita of Blue Island and Debbie Meyers-Martin of Matteson also signed the letter. Rita was chief architect of gaming expansion legislation lawmakers approved in May 2019. The law required the gaming board to solicit and review applications and award a license by October 2020. The law, however, left wiggle room to extend the process, and the gaming board said it needed more time because of the pandemic.
The gaming board’s next scheduled meeting is Sept. 9. Lawmakers want Pritzker to use his influence to move the process along without directly becoming involved in the license selection process, DeLuca said. “I don’t think any legislator, any politician or any governor should interfere with this process that the gaming board is going through, but they can certainly put it on their radar,” he told me. “We can certainly make it known that this is priority for the Southland, and that does not appear to be happening.”
Pritzker’s press secretary did not immediately respond Wednesday to a request for comment.
Developers, municipal officials and Native American tribes involved in the four applications essentially have been holding their collective breaths while a consultant hired by the gaming board conducts background checks and reviews other materials.
Calumet City and partner Delaware North want to build a casino on part of the River Oaks shopping center at Torrence Avenue east of Interstate 94. Wind Creek LLC and the Poarch Band of Creek Indians want to build a casino on the border of East Hazel Crest and Homewood at the interchange of Halsted Street and Interstate 80/294.
Lynwood and the Ho-Chunk Nation propose a casino just east of Illinois 394 and north of the interchange with Glenwood-Dyer Road. Matteson and the Choctaw Nation of Oklahoma want to build a casino on part of the former Lincoln Mall site at U.S. 30 and Cicero Avenue.
“The bottom line is, the applicants, they don’t feel they’re any closer,” DeLuca said. Lawmakers wrote specific deadlines into the gaming expansion bill. Granted, the pandemic upended the process for many government and business investment decisions. But at what point does the executive branch come into conflict with the will of the General Assembly over casino license delays? “That’s a good question,” DeLuca said.
DeLuca and others raised concerns in August 2020 about the gaming board’s delays in awarding a license. DeLuca said it appeared some progress was made after he sent a letter with a similar message to the gaming board in March. “We have had a couple meetings with the gaming board where there was very good communication,” he told me. “I felt they were very transparent and forthright about what the process was. The problem is, there doesn’t seem to be follow through on that, and that’s what prompted this letter.”
The gaming board responded to an inquiry with a statement attributed to administrator Marcus Fruchter. “The IGB fully appreciates the significance of the new casino license to the communities of the south suburbs,” the board said, in part. “The casino application process is a rigorous and significant undertaking.”
U.S. Jobless Claims Fell to Pandemic Low of 348,000 Last Week
Jobless claims fell to a new pandemic low last week, suggesting the labor market continues to heal even as the Delta variant causes uncertainty. First-time applications for benefits, a proxy for layoffs, fell by 29,000 to a seasonally adjusted 348,000 in the week ended Aug. 14, the Labor Department said Thursday. That was the lowest level of claims since the pandemic took hold in the U.S. in March 2020.
The four-week moving average, which smooths often volatile data, fell to 377,750 last week, also a fresh pandemic low. New jobless claims have fallen for four straight weeks and are down more than 50% since January.
Claims data was mixed across the country. On a non-seasonally adjusted basis, new applications fell from the prior week in Texas, Illinois, Michigan and Florida, but rose in several other states, including Virginia, New Mexico and California.
Continuing claims for regular state programs, a proxy for the number of people receiving benefits, fell to a seasonally adjusted 2.8 million for the week ended Aug. 7, the Labor Department said. That was also the lowest since March 2020.
Concerns about the Delta variant’s impact on the labor market prompted the Biden administration on Thursday to reaffirm that federal funds can be used to allow some workers to remain on unemployment assistance. Federal programs enacted to respond to the pandemic provided an extra $300 a week on top of state payments, provided recipients assistance longer than the six months most states allow and provided aid to gig workers and others not typically eligible for benefits.
Those programs are set to expire nationwide Sept. 6. Already 19 states ended their participation in those programs, and five more removed only the $300 weekly enhancement, according to the National Conference of State Legislatures. Governors in those states cited reports of worker shortages for reducing and cutting off benefits.
Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh said that while the extra weekly payments should expire next month, states that want to continue other pandemic benefit programs may use state aid they received as part of the $1.9 trillion Covid-19 relief package Congress enacted in March.
“As the economy continues to recover and robust job growth continues, there are some states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time, allowing residents of those states more time to find a job in areas where unemployment remains high,” they wrote in a letter to Congress on Thursday. “The Delta variant may also pose short-term challenges to local economies and labor markets.”
The Labor Department will communicate with states about how to divert some of the $350 billion in pandemic aid to support additional jobless benefits through their state unemployment insurance programs, Ms. Yellen and Mr. Walsh said. The Labor Departments also announced $47 million in new grants for re-employment services.
Statewide Payroll Jobs Up Significantly for Second Consecutive Month, Unemployment Rate Down in July
The Illinois Department of Employment Security (IDES) announced today that the unemployment rate fell -0.1 percentage point to 7.1 percent, while nonfarm payrolls increased +35,400 in July, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. The June monthly change in payrolls was revised from the preliminary report, from +12,500 to +26,100 jobs. The June unemployment rate was unchanged from the preliminary report, remaining at 7.2 percent.
The July payroll jobs estimate and unemployment rate reflects activity for the week including the 12th. The BLS has published FAQs for the July payroll jobs and the unemployment rate.
In July, the three industry sectors with the largest over-the-month gains in employment were: Leisure and Hospitality (+14,200), Educational and Health Services (+7,100), and Professional and Business Services (+4,200). The industry sectors that reported monthly payroll declines were: Financial Activities (-1,700) and Government (-300).
“Today’s data is a positive step in the economic recovery of the state, and representative of the resiliency of Illinois workers and businesses,” said Senior Advisor Andy Manar. “With federal unemployment programs ending in just under a month, IDES and the state will do what it takes to support workers and their families who need additional assistance as they recover from the pandemic and look to rejoin the workforce.”
“As thousands of Illinoisans return to jobs in key sectors, today’s report is welcome news and demonstrates that Illinois continues on the path to recovery,” said Sylvia Garcia, Acting Director of the Department of Commerce and Economic Opportunity (DCEO). “Still, there is much more work to be done to ensure our hardest hit industries and workers can get back on their feet. That’s why, under Governor Pritzker’s leadership, this week we launched the $250 million Back to Business (B2B) economic recovery program, which will offer small businesses in the hardest hit industries and communities grants of $5,000 to $150,000 to help offset losses, bring back workers, and take continued steps to rebuild our economy.”
The state’s unemployment rate was +1.7 percentage points higher than the national unemployment rate reported for July, which was 5.4 percent, down -0.5 percentage point from the previous month. The Illinois unemployment rate was down -4.9 percentage points from a year ago when it was at 12.0 percent.
Compared to a year ago, nonfarm payroll employment increased by +231,100 jobs, with gains across most major industries. The industry groups with the largest jobs increases were Leisure and Hospitality (+71,500), Professional and Business Services (+52,200), and Trade, Transportation and Utilities (+33,300). The only industry group that reported jobs losses was Financial Activities (-3,800). In July, total nonfarm payrolls were up +4.2 percent over-the-year in Illinois and +5.2 percent the nation.
The number of unemployed workers was down from the prior month, a -1.3 percent decrease to 437,700, and was down -40.6 percent over the same month for the prior year. The labor force was up +0.4 percent over-the-month and up +1.0 percent over-the-year. The unemployment rate identifies those individuals who are out of work and seeking employment. An individual who exhausts or is ineligible for benefits is still reflected in the unemployment rate if they actively seek work.
Bills of Interest Signed into Law
HB 117, Secure Choice Savings Program was signed into law. This bill provides that the Act applies to employers with at least 5 employees, rather than at least one employee. (Current law applies to employers with fewer than 25 employees.) Provides that a small employer is an employer that employed less than 5 employees during any quarter of the previous calendar year, rather than less than 25 employees at any one time throughout the previous calendar year. Provides enrollment deadlines. Provides that small employers may, but are not required to, establish payroll deduction arrangements for retirement savings arrangements.
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry