Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”

Chamber members:

Tomorrow (Oct. 13) is the last chance to apply at 11:59 PM for the Back to Business Grant. As part of Governor JB Pritzker’s overall economic recovery strategy, the $250 million Back to Business (B2B) grant program aims to deploy small businesses recovery grants for those hit hardest by the COVID-19 pandemic. The B2B grant program builds on the success of last year’s Business Interruption Grant (BIG) program – an equity focused business relief program, which directed $290 million to 9,000 businesses in 98 communities across Illinois. B2B is a key component of the Governor’s $1.5 billion economic recovery plan, aimed toward a swift and equitable deployment of American Recovery Plan Act (ARPA) funds that have been designated for Illinois to assist in recovery from the COVID pandemic.

Here is the link to the B2B grant page:

The House returns from recess in Washington D.C. to vote on the debt-ceiling extension, which the Senate passed last week. The Senate is on recess. The House is set to vote for legislation raising the U.S. borrowing limit into December, temporarily staving off a default while lawmakers battle over setting a new ceiling for U.S. debt. The Democratic-led House, unified around raising the borrowing limit, is assured of enacting the measure into law because it needs only a simple majority to pass legislation.

The debt-limit increase doesn’t authorize new spending, but instead allows the government to meet existing obligations, including interest on the debt and payments to Social Security. The next deadline for raising the debt limit, Dec. 3, coincides with the deadline for passing legislation to avoid a partial government shutdown.

Read on for further information in today’s roundup.

*Government Affairs Roundup brought to you by Silver Cross Hospital*

Jobs forecast falls way short
The U.S. added fewer jobs than forecast for a second month in September, signaling weakness in the labor market recovery and complicating a potential decision by the Federal Reserve to begin scaling back monetary support before year end.

Nonfarm payrolls increased 194,000 last month, the smallest advance this year, after an upwardly revised 366,000 gain in August, a Labor Department report showed Friday. The unemployment rate fell to 4.8%, partly reflecting a decline in the size of the labor force. Meantime, average hourly earnings jumped.

Consecutive months of sluggish job growth indicate a tug of war between employers—starved for workers to meet demand—and candidates who have been slow to return to the workforce. Nonetheless, school reopening’s and the end of expanded federal unemployment benefits should lead to a pickup in hiring in coming months at a time when companies are boosting pay.

The labor force participation rate—a measure of the share of Americans who are employed or looking for work—fell by 0.1 percentage point to 61.6%.

In September, employment decreased by about 144,000 in local government education. The Labor Department said hiring last month was lower than typical, resulting in a decline after seasonal adjustment. Payrolls at restaurants and bars rose only slightly. The jobs figures risk not satisfying the Fed’s “substantial further progress” criteria for labor market improvement, indicating the central bank could delay its plan to begin tapering asset purchases by year-end. Chair Jerome Powell said after last month’s policy meeting that “a reasonably good employment report” for September would be needed to meet that test.

Vaccine mandates put into place by employers and governors in states including California and New York in recent weeks could also be contributing to churn in the labor market and adding to hiring challenges. The report also showed employment in nursing and residential care dropped 37,600.

While health concerns about the delta variant likely weighed on hiring in August and September, cases are dropping or poised to start falling in a majority of states, which could bring more Americans back to the labor force in coming months. Total government employment fell 123,000 in September, the biggest drop in 11 months. Private payrolls climbed a less-than-forecast 317,000 last month, the smallest gain since April.

While payrolls at leisure and hospitality firms improved from August, job growth in the industry has slowed markedly from earlier in the year. Hiring firmed in construction, while payrolls rebounded in wholesale and retail trade.

Debt Limit Raised
The Senate voted along party lines Thursday to raise the U.S. borrowing limit into December, after Democrats struck a short-term agreement with Republican leaders that averted a looming default but sets up another showdown within months, report Siobhan Hughes, Lindsay Wise and Eliza Collins. House Majority Leader Steny Hoyer (D., Md.) said House lawmakers would be called back from recess for an Oct. 12 vote on the bill.

A key moment last night came when 11 Republicans joined all 50 Democrats in a vote to break the 60-vote filibuster threshold and proceed to final passage of the measure. The legislation will raise the nation’s borrowing limit by $480 billion, the amount the Treasury Department says is needed to meet the country’s cash needs until Dec. 3.

​It was based on a proposal made Wednesday by Senate Minority Leader Mitch McConnell and accepted by Majority Leader Chuck Schumer Thursday. Some Republicans weren’t happy about the offer.

Global Minimum Corporate Tax Rate Moves Forward
A global agreement to set a minimum 15% corporate tax rate cleared its last major hurdle Thursday after Ireland, a low-tax country that is the European headquarters for some of the largest U.S. tech companies, said it would join the overhaul effort.

The change in Irish policy comes ahead of a Friday meeting of 140 governments and jurisdictions that have for years been negotiating a way of taxing international companies to limit avoidance and divide tax revenue in a way they say is fairer. The group seems likely to give its backing to a final agreement that would aim for implementation in 2023.

Ireland had been one of a small number of holdouts when the outlines of a global agreement were settled in July. That accord, driven by the U.S., aims to overhaul the way multinationals are taxed, the culmination of a yearlong effort to squeeze tax-avoidance arrangements.

If the needed changes to national law and international treaties are made, it would be the most sweeping change in international taxation in a century. In addition to setting a minimum rate that would likely see a number of the world’s largest companies pay more tax, existing tax revenues would be divided among governments so that countries where businesses have customers would get more revenue. That overturns a longstanding principle of international taxation, under which profits are taxed where value is generated, which traditionally was where businesses had a physical presence.

While small, Ireland plays an outsize role in strategies used by companies from the U.S. and elsewhere to lower their global tax bills. Most of the largest U.S. technology firms have their European headquarters in Ireland, and the country has also attracted the largest U.S. pharmaceutical companies.

Ireland’s decision to raise its corporate tax rate from 12.5% after the agreement is implemented is a concession to key allies, particularly the U.S.

Illinois Democrats Prepare to Roll Out New Congressional Map
We should know by this time next week what new congressional maps will look like as we finally may know how Springfield Democrats intend to change the state’s congressional map. Exactly what to expect is still for the most part remaining a secret, with Democratic leaders being extremely tight-lipped about what they’re planning not only with the media, but also with incumbent congressmen.

That leaves some key questions to be answered, including whether mapmakers really can retain three majority-Black districts, whether a second Latino-majority district is feasible, and whether GOP Rep. Adam Kinzinger will lose his district, potentially forcing him into a race for governor or U.S. Senate.

What’s known for sure is that three-person panels—comprised of aides to House Speaker Emanuel “Chris” Welch, Senate President Don Harmon and Gov. J.B. Pritkzer—have been meeting separately in recent days with every Democratic member of the state’s congressional delegation to see what they want out of decennial reapportionment.

Sources say those meetings have been strictly one-way, with the congressmen talking but getting no answers as to what to expect. Members have been told only the General Assembly likely will adopt a new map in its fall veto session, which begins next week, on Oct. 19, and lasts six days over two weeks.

That’s similar to what House and Senate reapportionment committees have been doing. Headed by Sen. Omar Aquino, D-Chicago, and Rep. Elizabeth Hernandez, D-Cicero, they’ve started holding public meetings to ask voters what they want, with the last session scheduled for this Friday, Oct. 15. But as with the meetings with congressmen, no proposed maps have been unveiled.

Another major player in this is the Democratic Congressional Campaign Committee, which serves as the main election arm for U.S. House Speaker Nancy Pelosi. “D-trip,” as it’s known, is believed to have floated maps that would dismember Kinzinger’s district and seek to create a new Democratic-majority district downstate, potentially forcing Rep. Rodney Davis, R-Taylorville, into a race for governor against Democratic incumbent J.B. Pritzker.

Among other issues reportedly drawing some fighting among Democrats is whether to create a second majority-Latino district. That might be technically possible based only on raw population.
There also are disputes over whether to push the district of Rep. Robin Kelly, D-Matteson, farther south and west, and whether the districts of not only Rep. Brad Schneider, D-Deerfield, but Rep. Jan Schakowsky, D-Evanston, and/or Raja Krishnamoorthi, D-Schaumburg, up to the Wisconsin border.

Report: Taxpayer burden in Illinois nearly doubles in 12 years
Illinois taxpayers are on the hook for nearly double the debt burden of just 12 years ago. That’s according to a new report on the fiscal state of the state. Truth In Accounting (TIA) has been evaluating state governments for how much debt the state has versus how much they bring in.

For all 50 states, the total amount of state government debt taxpayers must pay back is $1.5 trillion at the end of fiscal year 2020. For Illinois, TIA Research Director Bill Bergman said the amount owed per taxpayer went from about $30,000 in 2009 to $57,000 in the most recent report.

“In other words, it’s almost doubled since 2009,” Bergman said. “That’s significant for a few reasons, including the beginning of that period was in the middle of the worst economic and financial crisis since the Great Depression and Illinois has only deteriorated since then despite the massive recovery in financial markets since 2009. That’s scary.”

Only two other states were in worse financial condition than Illinois. New Jersey’s taxpayer burden is at $58,300 and Connecticut’s burden is at $62,500 per taxpayer. Only 11 states had taxpayer surpluses. The rest are considered “Sinkhole States” by TIA.

Illinois is among the five worst Sinkhole States in TIA’s report where they note the state needed $236 billion to pay all of its bills, which include long-term pensions and other post-employment costs for state retirees. TIA says the pension debt can be equated to the state having only 37 cents for every dollar of promised pension benefits set aside.

The state is also consistently late with its annual audited financial reports, going more than 400 days to publish when the standard is 180 days. Bergman said of all but two states, Iowa and California, that have published their audited reports, Illinois went the longest at 408 days since the end of the previous fiscal year.

“What does that mean? That means our government officials are planning for the future on the basis of audited results that are more than a year old,” Bergman said. “Hopefully government accounting improves on its timeliness in the years ahead.”

Governor Pritzker Takes Bill Action
Today, Governor JB Pritzker took the following bill action:

Bill Number: SB 539
Description: Makes meaningful ethics reforms to restrict government officials from lobbying activities, tighten regulations on registered lobbyists and consultants, and expand economic interest disclosures.
Action: Amendatory Veto Certification
Effective: January 1, 2022

Bill Number: SB 967
Description: Ensures Illinois continues to be a leader in our efforts to erode racial disparities in healthcare coverage and access for women and babies by allowing the state to expand its maternal and child health programs to serve pregnant and postpartum individuals determined high-risk.
Action: Amendatory Veto Certification
Effective: Immediately

Bill Number: SB 2065
Description: Waives employer charges for costs associated with the eligibility of non-instructional academic personnel from benefits paid January 3, 2021, through September 4, 2021.
Action: Signed
Effective: Immediately

Stay well,

Mike Paone
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
815.727.5371 main
815.727.5373 direct