Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Eyes are on Washington to see if a deal can be struck on government funding as the deadline hits at the end of this week. Closer to home though we see good news on the pay down of the unemployment insurance trust fund debt.
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Governor Pritzker Announces Significant Payment Toward Unemployment Insurance Loan
Governor Pritzker and the Illinois Department of Employment Security (IDES) will be making a significant payment of $450 million toward the remaining $1.8 billion borrowed under Title XII of the Social Security Act. Due to continued historic low unemployment insurance claims, the unemployment insurance trust fund has capacity to make this payment without impairing the department’s ability to pay benefits.
This is the second significant contribution to the outstanding loan balance. In March of 2022, Governor Pritzker signed legislation which provided an historic $2.7 billion contribution from American Rescue Plan recovery dollars to assist the state’s unemployment trust fund. This payment cut the original $4.5 billion loan balance down to $1.8 billion.
“This contribution is direct evidence of labor market strength in Illinois,” said Governor JB Pritzker. “With unemployment claims levels continuing to reach historic lows, the State’s Unemployment Trust Fund is able to contribute to the loan repayment and save Illinois taxpayers in interest costs.”
“This contribution is another significant step toward paying down the federal loan,” said IDES Director Kristin Richards. “The Department will continue to work with business and labor representatives through the agreed bill process to support this critical resource.”
Illinois has remained below the previously recorded low of just more than 70,000 continued claims for twenty consecutive weeks, unprecedented since the beginning of the series in January 1987. Since the start of this year, Illinois has gained nearly 120,000 jobs throughout the state, with the most significant increases seen in the hotels and food services, manufacturing, healthcare and social assistance, construction, and transportation and warehousing industries.
Federal funds borrowed under Title XII were necessary to supplement the state’s unemployment insurance trust fund and provide economic relief to unemployed workers throughout the duration of the Covid-19 pandemic. A plan to pay off the remaining balance on the loan will need to be developed through the agreed bill process.
State gambling revenues hit a new high
With Illinois revenues growth remaining peppy amid the COVID recovery, a new report underscores a little-realized reason why: gambling. The state’s take from legal wagering–be it at the track, from the Lottery, or from the video poker machines at your neighborhood store–dipped only a little bit during the pandemic, mostly because the state’s riverboat casinos were closed. But with the casinos now reopen, video gaming stronger than ever and money from sports wagering soaring, the state’s gambling revenues are at a new high.
According to the report by the Illinois Commission on Government Forecasting & Accountability, the legislature’s fiscal research unit, tax revenues just to state government hit $1.877 billion in the fiscal year ended June 30. That’s up 38.8% from fiscal 2021, and nearly $500 million above the figure in pre-pandemic fiscal 2019.
In a state with an operating budget of around $43 billion, that’s big, big money. And unlike other Illinois taxes such as the sales tax, which excludes many fast-growing service areas taxed by other states, this one is providing robust annual revenue hikes.
This growth is not in traditional betting areas such as horse tracks, which have virtually disappeared in the state, or casinos, which have seen a slow but steady decrease in tax revenues, in part because the state reduced tax rates. Rather, it’s in new areas such as video gaming, with tax revenues tripling since 2017 to $762 million a year, or wagering on sports, which is just getting started but already producing $142 million a year.
All of this is above and beyond the hundreds of millions of dollars a year that go to local governments. And the figures don’t reflect the revenue impact of the new casinos authorized by the General Assembly, including one in downtown Chicago.
Commercial Driver’s License Rulemaking
Proposed rulemaking by the Secretary of State would remove the requirement that Illinois Commercial Driver’s License (CDL) applicants who hold valid out of State CDLs retake their CDL written and pre-trip/skills/road exams.
This requirement had been temporarily halted during the pandemic, but would be permanently removed under this rulemaking. Illinois is the only state that requires retesting of out-of-state CDL holders. The Illinois Chamber has long been supportive of this proposed change.
Read more about the proposed rulemaking here. Relevant reading begins on page 15522.
COGFA: FY21 Pension Systems Financial Condition
The Commission on Government Forecasting & Accountability released its FY21 Financial Condition of the State Retirement Systems. There is a lot of valuable information in this report, but we will highlight these paragraphs provided in the executive summary:
- From FY 2007 through FY 2021, the combined unfunded liabilities of the systems increased by $87.5 billion based upon the market value of assets. The main factors for this increase in unfunded liabilities were actuarially insufficient employer contributions, changes in actuarial assumptions and demographics and other miscellaneous actuarial factors, along with lower-than-assumed investment returns.
- If the State continues funding according to Public Act 88-0593, the projected accrued liabilities of the State retirement systems will increase from $249.0 billion at the end of FY 2022 to $322.0 billion at the end of FY 2045. At the same time, the projected actuarial value of assets is projected to increase from $111.3 billion to $289.8 billion. Consequently, the projected unfunded liabilities are projected to decrease from $137.7 billion at the end of FY 2022 to $32.2 billion at the end of FY 2045, and the projected funded ratio is expected to increase from 44.7% in FY 2022 to 90.0% by the end of FY 2045. All of the projected figures in this paragraph come from the various systems’ actuaries and are predicated upon the State making the necessary contributions as required by law. Please refer to Appendices A-F for more detailed projections.
You can read the full report here.
Illinois Awarded $6.8 Million Grant from the U.S. Department of Labor
The Illinois Department of Employment Security (IDES) announced Illinois has been awarded a $6.8 million equity grant from the U.S. Department of Labor (DOL). The grant will allow IDES to better understand and address equity gaps within the state’s unemployment insurance (UI) system.
IDES will leverage the equity grant to fund four major equity projects, all grounded in using expanded data to identify potential inequities in the unemployment pipeline within underrepresented groups. Using new demographic data and user insights, the Department intends to refine UI service delivery systems, processes, and communications for more equitable access and experience. This includes making UI information easier to understand, translating information into multiple languages, expanded self-service digital options, and increased outreach to community level organizations.
“Since 2019, Governor Pritzker’s administration has supported IDES in its efforts to improve services to individuals with limited English proficiency and other barriers to access,” said IDES Director Kristin Richards. “The work continues, and this grant opportunity will allow IDES to develop the data necessary to make targeted investments to promote equity in our state’s UI system and ensure eligible individuals have access to benefits.”
In addition to the equity grant, Illinois is working closely with U.S. DOL to use additional federal resources provided to states through a Tiger Team engagement intended to assist with fraud prevention and detection, benefit timeliness and claims management, and equitable access to UI services.
U.S. DOL announced the funding opportunity, provided through the American Rescue Plan Act, for states last August to expand outreach, promote awareness, improve technology, streamline instructions, provide translation services, increase staffing, and address other accessibility issues in marginalized communities. To date, Illinois is among 27 other states and the District of Columbia who have been awarded more than $150 million in the equity grant.
Occupational Safety and Health Administration Consulting
Illinois OSHA, a Division of the Illinois Department of Labor, offers free on-site safety consultations to small and medium-sized businesses. These consultations are free and confidential, with the agreement that employers correct potential safety hazards which pose a threat to life, limbs or eyesight or result in long-term disability. Please see the attached materials for information.
If any small or medium-sized business wishes to schedule a consultation visit, please have them visit the program’s website https://worksafe.illinois.gov/ ; email dol.consultation@Illinois.gov ; or call 800-972-4216.
Shutdown threat grows as lawmakers struggle to reach final deal
The heat is dialing up on Congress to quickly strike an agreement on government funding as lawmakers stare down a critical deadline to avert a shutdown at week’s end. Lawmakers on both sides have been pressing for a short-term funding bill, often referred to as a continuing resolution (CR), that would keep the government funded at current levels until after the midterm elections and buy time for a larger deal on government spending for fiscal 2023.
But Congress has less than a week to pass the stopgap funding measure or risk its first shutdown in years, and lawmakers still have several hurdles to cross before they can clear the finish line. The government will shut down on Oct. 1 without a new spending measure.
Most expect that Congress will find a way to pass a short-term measure before midnight Friday, as it is not in either party’s interest to be blamed for a shutdown weeks before the midterm elections. But the timeline and disagreements won’t make it easy.
The Senate easily advanced a short-term government funding bill on Tuesday after Joe Manchin conceded defeat on his push to combine the funding fix with his energy permitting package. The chamber could officially clear the bill as soon as Wednesday, though it would require the agreement of all 100 senators, sending the bill off to the House.
Before the vote, Senate Majority Leader Chuck Schumer said on the floor that he and Manchin would “continue to have conversations about the best way” to move forward on the permitting effort before the end of the year. Senate Minority Leader Mitch McConnell had encouraged Senate Republicans to take down Manchin’s effort in a floor speech Tuesday afternoon, saying that adding the West Virginia Democrat’s permitting plan to the bill amounted to a “poison pill.”
“A failed vote on something as critical as comprehensive permitting reform only serves to embolden leaders like [Vladimir] Putin who wish to see America fail,” Manchin said 30 minutes before the scheduled for vote. He added he also made the call due “to my firmly held belief that we should never come to the brink of a government shutdown over politics.”
Republicans have spent years discussing the need to speed energy projects, but McConnell said Manchin’s effort is insufficient. “I’ll be voting no and I would urge all my colleagues to vote no as well,” McConnell said.
Senate leaders unveiled the text of the government spending patch, with Manchin’s proposal included, minutes before midnight on Monday. The bill would extend government funding until Dec. 16 and provide Ukraine more than $12 billion in emergency cash. It also devotes $35 million to respond to “potential nuclear and radiological incidents in Ukraine,” according to a summary.
The temporary funding patch includes $1 billion in heating assistance for low-income families, $20 million to help address the water crisis in Jackson, Miss., more than $112 million for federal court security and billions of dollars in other disaster aid.
The measure also allows FEMA to spend at a higher rate to respond to natural disasters in the short term, including the catastrophic flooding and power outages caused by Hurricane Fiona in Puerto Rico. It includes extra cash and flexibility for resettling Afghan refugees and a five-year reauthorization of the FDA’s user fee programs. It does not include any additional funding to address emerging coronavirus or monkeypox needs, despite the Biden administration’s request for billions of dollars in such emergency money.
The stopgap measure buys time for negotiations on a broader government funding deal that would boost federal agency budgets in the fiscal year that begins on Oct. 1 — a priority for Sen. Richard Shelby (R-Ala.) and Senate Appropriations Chair Patrick Leahy (D-Vt.), who are both retiring at the end of the year.
Underlying Durable Goods Data is Encouraging
Durable goods orders in August fell 0.2% after a revised 0.1% drop in July. Durable goods cover computers and electronics, communications equipment, cars, and appliances for consumers. For businesses it includes machinery, electrical equipment, other capital goods, airplanes, and transportation equipment. Defense spending is also included.
The decline isn’t all bad news. The overall drop in August was largely influenced by a large fall in aircraft orders, which tend to be highly volatile. Spending on core capital goods rose 1.3%, well above inflation.
Durables are an important signal for the economy because they are expensive and require consideration before purchasing. For consumers, they generally buy them when they have money and can afford to borrow to buy them. For businesses, they are a barometer of future sales and what the strength of the economy will be down the road.
Durables spending rises when consumers and businesses have confidence in the economy now and in the future. The increase in capital spending is a sign that businesses remain hopeful about the economy.
America Works Briefing Tomorrow
During the pandemic, the government infused trillions of dollars into the economy to help Americans stay afloat during the height of business closures, layoffs, and uncertainty. Millions of Americans benefited from pandemic relief payments, enhanced unemployment benefits, and bolstered social programs.
These support mechanisms provided necessary help to many families during difficult times, but these same programs can discourage Americans from joining or rejoining the workforce—especially when increased earnings do not make up for the loss in benefits.
As businesses continue to grapple with a national workforce shortage, the benefits framework is one of many factors keeping Americans on the sidelines of the labor force.
Please join the U.S. Chamber this Thursday, September 29, 2022 at 2:00 for “America Works: How Government Benefits Programs are Contributing to the Labor Shortage”.
This briefing will cover:
• Government assistance and benefit cliffs,
• Unemployment insurance, and
• State actions around these issues.
Speakers include:
• Jenna Shrove, Senior Director of Strategic Advocacy and Advisor to the Chief Policy Officer
• Mat Despard, Associate Professor, Department of Social Work, UNC Greensboro
• Amy Simon, Principal, Simon Advisory (Former Chief of Staff and Acting Deputy Assistant Secretary, USDOL Employment and Training Administration)
• Michael Quaranta, President, Delaware State Chamber of Commerce
Microsoft Teams meeting
Join on your computer, mobile app or room device
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Meeting ID: 225 018 706 490
Passcode: A4wHe2
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+1 206-413-8589,,933260920# United States, Seattle
Phone Conference ID: 933 260 920#
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct