Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
It’s been a busy couple of days with mask mandates restarting here in Illinois for all those indoor, new vaccine mandates, the Afghanistan situation, a hurricane, and of course that covid variant hanging around.
In addition, here in Illinois our State Senators and Representatives are back in session and they’re tackling maps/redistricting and the ongoing energy bill. The Governor had some big signings as well that are shared below. Check it all out in today’s Roundup and make sure that you’re aware of the information directly below regarding the Back to Business Grant. I’ve heard from a few over the last couple of days that weren’t aware at all of the program!
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.
*Government Affairs Roundup brought to you by Silver Cross Hospital*
Illinois Democrats Finalize Legislative Maps
Republicans labelled it “the capstone of disgrace” and the product of a “Mickey Mouse process.” They griped that they’d seen the final details only an hour before debate began and demanded that the plan be sent back to committee for further review. But none of it did any good Tuesday evening, as Springfield Democrats shrugged and flexed their legislative muscle. First the House, and later the Senate, approved revised maps that will be used to elect General Assembly lawmakers.
The House action came on a 73-43 vote. Late Tuesday night the Senate followed with a 40-17 vote. Now the measure goes to Gov. J.B. Pritzker for his signature. Maps enacted three months ago were based on incomplete population data but rushed through in order to meet a constitutional deadline. With fuller data now available, Democrats declared they had done their job.
The maps are “consistent with the diversity and values of our state,” said Rep. Elizabeth Hernandez, D-Cicero, who chaired the House panel that developed the maps. While the earlier version had been attacked for producing districts of different sizes, the revised version features districts of “substantially equal” population, with a maximum variation of 0.48% from the statewide mean, Hernandez said.
Republicans strongly dissented. “The process here is broken down. It’s beyond broken,” said Assistant House GOP Leader Tim Butler of Springfield. Others complained that dozens of downstate counties and Chicago-area suburbs had been needlessly split in the name of giving Democrats a partisan edge.
Hernandez replied that, per U.S. Supreme Court rulings, partisan factors were among those considered by map-makers, but by no means the only factors. In the end, the House approved a resolution expressing the map-makers’ legal intent by a party-line 73-43 vote. Later in the evening, the bill setting out maps was enacted and sent to the Senate.
Democrats hold super-majorities in both the House and Senate, with Democrat J.B. Pritzker serving as governor. They’ve insisted that the maps they’ve drawn are fair and within the terms of the law, but haven’t denied that their intent is to keep control of the General Assembly.
Rather than risk allowing Republicans to have a seat at the table, they passed an initial set of new maps this spring, technically meeting a state constitutional deadline for action. Had that date not been met, the decision would have passed to a commission that Republicans could dominate via a tie-breaking lottery. But the maps approved in May were based not on final results from the 2020 Census, which didn’t become available until August, but earlier estimates from the U.S. Census Bureau’s American Community Survey program.
Both Republicans and one key outside group, the Mexican-American Legal Defense & Educational Fund challenged those maps in U.S. District Court here, alleging that using ACS date created faulty maps that do not adequately reflect Illinois’ true population. MALDEF has not commented on the newly revised maps but Hernandez had discussed the changes with the group.
The courts have not yet ruled on those suits. But Democrats were forced into today’s action when final census figures arrived and showed that the ACS data undercounted the number of Latino residents of the state.
Republicans almost certainly will continue with their legal challenge, if only because the party now is totally shut out of power positions in Springfield. Hispanic groups have not indicated whether the new revisions are sufficient to resolve the dispute.
Assuming they’re not overturned by the courts, the new maps being enacted will be in place for the 2022 elections and for the next decade. Though Democrats clearly are flexing legislative muscle, they’ve argued that Republicans in right-leaning states have taken similar steps and even gone further in restricting mail balloting and similar steps.
No energy deal yet as Senate passes its version
The Illinois Senate passed its version of the sprawling energy bill in the early morning hours but effectively shifted to the House the debate over the future of two municipally owned coal-fired power plants.
Gov. J.B. Pritzker doesn’t support the approach in the Senate bill, which would require the plants to close no later than 2045 but would impose no limits on their carbon emissions in the meantime. Effectively, the measure remains in limbo as environmental groups and labor unions continue to battle over the plants, principally the Prairie State station in southern Illinois.
In a statement, the Pritzker administration said, “The governor’s office is in discussions with stakeholders to ensure that Prairie State and (Springfield power plant) CWLP’s closure in 2045 includes real interim emissions reductions consistent with previous bill drafts, and is committed to working with the General Assembly to address some drafting errors in the Senate bill that the Governor raised during talks today because they could have unintended legal consequences.”
In the end, Senate President Don Harmon couldn’t please both the members of his caucus wanting to preserve the plants as long as possible and the governor, who’s aligned himself with the greens. Left hanging is the Byron nuclear power plant owned and operated by Exelon, which the company plans to close later this month without more ratepayer funding. The bill would provide that; those negotiations were completed in May.
Also at issue are hundreds of millions of dollars in previously approved ratepayer funds for new solar projects in the state, which under current law must be returned to ratepayers beginning now. The measure would provide those funds for their intended use and would double what ratepayers shell out now for renewable development in order to greatly expand wind and solar projects in the state.
It now is up to Pritzker and House Speaker Emanuel “Chris “ Welch to amend the Senate-passed bill, pass it and send it back. Nothing yet is settled.
SALT Law Could Mean a Windfall for Illinois Taxpayers
Gov. J.B. Pritzker has quietly signed into a law a measure that will provide a major tax break to hundreds of thousands of Illinois taxpayers—many of them relatively high-income owners of small businesses or partners in law firms, medical practices, accountancies and other professional firms.
By one rough calculation, the new law would potentially allow state taxpayers collectively to deduct an additional $4 billion a year from their federal income tax returns, saving them an estimated $80 million annually. The measure will not cost the state itself any revenue, only the federal treasury.
The bill, sponsored by state Sen. Win Stoller, R-Peoria, specifically targets the $10,000 annual cap on deductions for state and local taxes, generally known as SALT, that was imposed under tax law changes pushed through Congress by President Donald Trump.
The SALT cap has been extremely unpopular in relatively high-income states such as California, New York and Illinois, where combined state income and local property taxes alone can easily amount to more than $10,000 a year for a middle-class family.
Washington Democrats have talked about abolishing or lifting the cap, so far unsuccessfully. But according to Stoller and the Illinois Chamber of Commerce, which worked with him on the bill, the U.S. Internal Revenue Service offered a partial workaround last autumn.
Under the workaround, which now is Illinois law, shareholders in S-Corps—typically small, often family-owned businesses—and partners in partnerships will be allowed to have their taxes paid directly by their companies, presumably out of distributions. If the S-Corp or partnership does that for all of its members, the SALT limitation will not apply. “The IRS came out with guidance last year that basically blessed the concept,” Stoller said. “It evens the playing field with C-Corps”—or big corporations.
Since the IRS gave the green light, at least 20 other states have enacted or proposed similar steps, including not only New York and Connecticut but our neighbors Wisconsin and Minnesota, said Keith Staats, executive director of the chamber’s Tax Institute. He pointed to a national group, Main Street Employers, that has been actively tracking the introduction and passage of such workaround legislation
The legislation passed both houses of the Illinois Legislature unanimously, a tribute to the fact that shorting Uncle Sam has bipartisan appeal.
Stoller said Illinois now receives about 400,000 individual returns a year that potentially would qualify for the higher deductions on companion federal filings. If each of those can deduct an additional $10,000, they’d save about $80 million in taxes, by one off-hand accounting rule that deductions reduce tax liability by about 2 percent.
Pritzker’s office declined immediate comment on the bill, and it was signed without a statement or news release. Stoller said Pritzker told him, “I love your bill,” and was glad that he and Democrats could help cut some people’s taxes. Stoller shrugged off the suggestion that many ordinary workers, who get a salary and not a distribution, will be unable to benefit from the new break.
“Small businesses employ thousands of Illinoisans,” Stoller said. “We can’t pass on any opportunity to help our small businesses that were hurt by COVID.” Some companies may be able to restructure their operations so that more workers are eligible to get the higher SALT deduction, Stoller said.
Governor Pritzker Advances Meaningful Ethics Reform Legislation
Governor Pritzker advanced Senate Bill 539, an ethics reform package that passed the General Assembly this session. The legislation includes a variety of measures to restrict government officials from lobbying activities, tighten regulations on registered lobbyists and consultants, and expand economic interest disclosures.
To move forward with this important legislation, Gov. Pritzker issued an amendatory veto to correct a technical drafting error. The fix will ensure that the Executive Inspectors General are able to maintain current processes and procedures regarding investigations. The Governor looks forward to working with the legislature on concurrence and pledged to certify the bill once the amendatory veto passes the legislature. Gov. Pritzker is also committed to working on additional legislation that reflects the continued urgency of ethics reform in Illinois – which was laid out as a key legislative priority in his 2020 State of the State Address. The full amendatory veto message is attached.
“Passing real, lasting ethics reform was a top priority of mine going into the 2020 legislative session, and I’m pleased to move forward with an ethics package that includes a number of meaningful changes,” said Governor JB Pritzker. “We must restore the public’s trust in our government and this legislation is a necessary first step to achieve that goal. I remain committed to making further advancements so the well-connected and well-protected cannot work the system to the detriment of working families across Illinois.”
“While more work remains to be done to restore the faith Illinois citizens have in their government,” said State Senator Elgie R. Sims, Jr.(D-Chicago). “They demanded real ethics reform like those included in this bill, changes like stopping the practice of legislators using their influence to lobby other governments and working to enact pro-rated salaries for legislators who leave office before the end of their term. Many of the changes included in this bill place Illinois on the path to restoring the faith citizens must have to make our democracy successful.”
“This measure offers bipartisan solutions to target some of the worst abuses of power in our state’s history,” said State Senator Ann Gillespie (D-Arlington Heights). “Our plan closes many of the loopholes that have allowed bad actors to game the system for decades. Our bipartisan team on the Senate Ethics Committee stands ready to continue this vital work to make our government work for everyone, not just a powerful few.
“This ethics package takes a meaningful step toward ending unseemly and corrosive conduct in Springfield,” said Ethic & Elections Committee Chairwoman Kelly Burke. “When we talk about restoring public trust in government, our goals are to hold elected officials accountable and instill transparency to prevent misconduct from happening in the first place. While a technical fix is in order, this new law will be the first step in achieving that goal.”
“This is a great and necessary first step in reforming our ethics laws in Illinois,” said Majority Leader Greg Harris (D-Chicago). “This comprehensive package includes bipartisan solutions to help restore the public’s trust in state government. I echo Governor Pritzker and my colleagues in the House and Senate that we must continue working to ensure elected officials and others in power are held to the highest of standards.”
Senate Bill 539 includes the following provisions:
• Bans government officials from engaging in compensated lobbying, including:
o State level: Legislators, Executive branch constitutional officers
o County level: elected or appointed county executive or legislative officials
o Municipal level: elected or appointed municipal executive or legislative officials
o Township: elected or appointed township executive or legislative officials
• Strengthens the Lobbyist Registration Act by expanding the definition of ‘officials’ and adding ‘consultant’ to the definition of compensation that is regulated.
• Increases transparency of lobbying activities by expanding the persons required to register as a lobbyist and establishing a shorter, two-day deadline for registration.
• Requires lobbyists to complete ethics training before their registration or renewal is deemed complete (instead of within 30 days).
• Requires lobbyists to disclose consultants and clients no later than two days after a consultant is retained.
• Restricts appointees to certain offices from being an officer of a candidate political committee or a candidate with the support of such a committee. Members of the State Board of Elections are also restricted from contributing to candidate political committees.
• Expands and clarifies disclosures required in Statements of Economic Interest, including, among others, government units that benefit the filer, lobbyist registration, and the source of gifts.
• Bans political fundraising in Sangamon County during session or the day immediately prior to such day, with limited exceptions.
• Strengthens revolving door provisions in the executive branch and establishes such provisions in the legislative branch.
• Empowers the Legislative Inspector General to undertake investigations without obtaining advance approval from the Legislative Ethics Commission.
• Revokes the provision allowing General Assembly members to receive prorated compensation following a vacancy.
The ball is now in Congress’s court to keep millions of Americans in their homes after the Supreme Court blocked the Biden administration’s latest eviction moratorium. In its 6-3 ruling late last week, the court said that it is up to lawmakers to authorize a freeze on evictions, something that has not transpired. However, with the full Congress not back in Washington for another three weeks, members are urging state and local governments to quickly get federal rental assistance funds to eligible recipients. They are also weighing additional legislative action to extend the moratorium and speed up the delivery of rental aid.
Even though the U.S. Supreme Court has ended the pandemic-related federal moratorium on residential evictions, the Illinois moratorium continues. The Centers for Disease Control and Prevention health order had banned evictions nationwide in areas with high COVID-19 transmission rates.
“In light of the Supreme Court ruling and the continue risk of COVID-19 transmission, President Biden is once again calling on all entities that can prevent evictions, from cities and states to local courts, landlords, Cabinet agencies, to urgently prevent evictions,” White House spokesperson Jen Psaki said.
Gov. J.B. Pritzker recently extended the ban until September 18. The extended statewide moratorium applies to all Illinois counties, including areas reporting low transmission rates. The governor’s office previously said it would be phasing out the moratorium.
Housing advocates says the moratorium extension will give tenants and landlords more time to connect with rental assistance funds that are available. While the moratorium prevents the enforcement of an eviction order, property owners and landlords can still file for eviction in court or challenge a tenant’s written declaration that they fell behind in paying rent due to the pandemic. But the moratorium prevents final trials and judgments from taking place in eviction hearings.
Michael Glasser, president of the Illinois-based Neighborhood Building Owners Alliance, said housing providers prefer not to go through the long and painful, legal process of eviction. “Just having the ability to evict gives us a tool that we need to kind of wake up and shake up some of the tenants who have been milking this process,” Glasser said.
Glasser warned of a pending debt tsunami once the moratorium is lifted. “Tenants owe billions in back rent, and the burden of that debt on neighborhood housing providers has drained their resources and impacted their ability to invest and maintain the homes that their tenants live in,” Glasser said.
Nearly 6.4 million U.S. households now cumulatively owe more than $21 billion in back rent, according to an estimate by the National Equity Atlas created by PolicyLink.
Tony Nudo, from the Springfield Area Landlord Association, told WMAY that with the statewide moratorium still in place, it is impossible to go after bad tenants. “You can’t get a court date at this time for evictions concerning money and it is very difficult to know what is going to happen in the future,” Nudo said.
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry