Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
We’re looking forward to our luncheon tomorrow with Congresswoman Lauren Underwood. It should be a great opportunity to find out more about her positions on various issues as well as a chance to get to know her more in depth.
Below is information on issues as well both on the federal and state levels. We’re looking into an information session on the Paid Leave mandate as well as other information sessions to begin the new year.
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Inflation slowed to 6.5 percent in December
Consumer prices slowed further in December, boosting hopes that the worst of red-hot inflation is behind the U.S. The annual inflation rate fell from 7.1 percent in November to 6.5 percent in December, according to the consumer price index, released Thursday morning. Prices fell 0.1 percent last month after rising 0.1 percent in November.
Those figures — which are in line with analyst predictions — mark six straight months of receding annual price growth. Excluding volatile food and energy prices, inflation rose 5.7 percent over the last 12 months ending in December and 0.3 percent on a month-to-month basis.
“Inflation is on its back heels. Consumer price inflation for December couldn’t have been much better,” Moody’s Analytics chief economist Mark Zandi tweeted. Food prices rose 0.3 percent, down from 0.5 percent in November. Energy prices fell 4.5 percent in December after falling 1.6 percent in November. But not everything was slowed: Shelter, meanwhile, rose 0.8 percent month-to-month, up from 0.6 percent in November.
The report is good news for consumers and Wall Street, which is hoping that falling prices will prompt the Federal Reserve to slow down its interest rate hikes. Economists have warned that the Federal Reserve’s rate hikes could send the U.S. economy into a recession. But Fed officials have insisted that they will continue measures to bring down inflation to their target 2 percent rate.
“It’s important to keep in mind that there are costs and risks to tightening policy to lower inflation, but I see the costs and risks of allowing inflation to persist as far greater,” Federal Reserve board member Michelle Bowman said Tuesday.
Graduated Income Tax Proposal Back in Spotlight
Asserting that the second time could be the charm, a veteran Illinois lawmaker is preparing a new effort to get the state to enact a graduated income tax. Senator Rob Martwick, who represents portions of Chicago’s Northwest Side and adjacent suburbs, said in a recent phone interview that he still believes the state, and particularly middle-class families, need the income and lower property taxes, respectively, that a graduated income tax would bring, even though voters in 2020 rejected a proposed constitutional amendment to do that by about a 10-point margin.
“If you really believe in something, you don’t give up after one loss,” Marwick said. “It’s the right thing to do.” Senator Martwick said he has not yet drafted enabling legislation for a second referendum and that his version likely would be somewhat different that the 2022 proposal, which he sponsored when he was in the Illinois House. The matter could drag on until next year, but Martwick said his hope is to offer a bill as soon as next month and see what support it draws. “I want to keep the discussion going,” Martwick said.
News that a leading Democrat is gearing up for another try drew immediate strong pushback from Illinois Manufacturers Association CEO Mark Denzler, whose group vigorously opposed the 2020 version. Raising taxes as the country nears a possible recession “sends a dangerous message to job creators,” including those in the electric vehicle industry that Pritzker is wooing hard with new economic incentives, Denzler said.
Springfield Republicans have been suggesting for months that Democrats would move to hike taxes after Pritzker’s recent re-election as billions in federal COVID-relief funds dry up. Those predictions may prove prescient, Denzler said. “As Yogi Berra said, it’s déjà vu all over again. . . .We thought we’d see this after the election.”
Denzler did not totally shut the door to a revamped income tax. But the business community will remain opposed at least until it sees “some real spending reform” from the Democratic-majority Legislature, something that in his view has not occurred.
Martwick said he has not discussed his pending new campaign with Pritzker. He did bring it up with Senate President Don Harmon, who did not endorse the idea but said, “OK, file the bill.” Harmon’s spokesman confirmed that the senator did talk with Martwick—and that he’s not taken a firm position yet. “The idea—the policy—is one the Senate president has long supported,” the spokesman said. “At the same time, we all saw the results and the message voters sent.”
Martwick said he has not yet decided whether the new graduated tax should be revenue neutral, cutting taxes at the bottom of the scale as much as it raises them at the top, or instead boost the state’s income in dealing with continuing massive debt in the state’s pension funds, which are short more than $130 billion of what’s needed to pay promised benefits.
Either way, the proposal must guarantee property tax relief in the way the “fair tax” didn’t, Martwick said. “When you look at people leaving the state, the vast majority are middle-class people,” with high taxes on their homes a prime reason. To be successful, a new graduated income tax plan must provide property tax relief and deal with the pension problem, he said.
Paid Sick Leave for All Employees
The Illinois General Assembly passed a new paid sick leave mandate that, once signed by the Governor, will take effect on January 1, 2024. The legislation provides up to 40 hours, or five days, of paid time off for all Illinois workers for any reason, including but not limited to: employee’s illness, care for a sick family member, and medical appointments.
The policy includes the following components:
- Employees would start accruing sick time on their first day of employment at a rate of 1 hour per 40 hours worked
- Employees accrue up to a minimum of 40 hours or 5 days of sick time per calendar year
- Use of sick time by employees would start after 90 days of employment
- Employees could carry over up to 40 hours of unused time to the following year
- Employers are not required to pay out employees for unused sick days when employment is terminated
- Would not require the pay out of unused sick days by employer
- Employers may require employees to use paid sick leave in 2-hour increments
- Exempts sick leave benefits that are negotiated as part of a collective bargaining agreement
- Employers may require employees to notify the employer if it is reasonably foreseeable
Bills Passed in Lame Duck Session
HB 240 Hospitals passed the Senate by a vote of 32-15-0 and passed the House by a vote of 85-24-0. This bill contains numerous healthcare changes relating to such things as hospital construction, nursing home staffing ratios and reimbursement, inpatient care for those accused of criminal activity, ground ambulance services and the State’s medical assistance program, and ARPA funding for health services.
HB 268, Tourism Districts passed the Senate by a vote of 48-6-0 and passed the House on concurrence by a vote of 73-30-0. This bill creates the Tourism Preservation and Sustainability District Act. Provides that hotel owners can petition a governmental unit (a municipality, county, or township) to create a tourism preservation and sustainability district if the hotel owners believe their businesses would represent more than 50% of transaction charges collected inside the district. Requires the owners to create a district plan. Provides for the governmental unit to pass a resolution of intent to create the district within 60 days after the filing of the petition if the governmental unit wants to proceed with the district. Provides that, in certain circumstances, a governmental unit must enter into an intergovernmental agreement with another governmental unit if territory of the other governmental unit is included within the territory of the district. Requires a public hearing with the opportunity for hotel owners to object to the formation. Provides that, if not enough objections are received by the governmental unit’s clerk, then the governing body of the governmental unit may form the district. Provides that transaction charges (charged either on a fixed dollar or percentage rate per hotel room per night) collected by a governmental unit shall be transferred to the local tourism and convention bureau included in formation ordinance which shall use the moneys for improvements and services within the district. Includes requirements for annual reports; modification; renewal, and termination of the district; and contesting the formation of the district or transaction charges in court. Contains other provisions relating to the operation of the district.
Illinois DCEO Updates/Information
Join Team RED and our DCEO colleagues for an overview of the Angel Investment Tax Credit program. DCEO’s Angel Tax Credit Program offers critically important support for the state’s early-stage, innovative start-up companies. The program issues $10M/yr in IL Income Tax credits to encourage investment in innovative, early-stage companies. The webinar will take place on Thursday, January 19 at 10 AM.
Webinar Register link: https://illinois.webex.com/webappng/sites/illinois/meeting/register/6a6d6e66c008455e9534533fdbe64e74?ticket=4832534b000000056a300967aaf55ebb5224e102d494f54337f5b29030e0cebaf67c7e46a8f8d4af×tamp=1673993921751&RGID=rb76e7dddcc74f5581f7567463109c20b
Federal Funding to Support Small Businesses
The U.S. Department of the Treasury announced that Illinois will receive up to $354.6 million to administer four programs as part of the State Small Business Credit Initiative (SSBCI). The expanded program offering through SSBCI will enable Illinois to support small businesses across the state – helping them attract more capital investment and expand or launch business operations, while supporting key sectors. All of the new programs will launch in the coming months.
• Advantage Illinois (AI) Loan Participation Program (Existing Program)
Advantage Illinois’ existing Loan Participation Program provides low-interest loans to small businesses by partnering with local lenders located across the state. In 2022 as of December, 71 percent of AI loans have gone to businesses owned by people of color, women, people with disabilities or veterans.
• Advantage Illinois (AI) Loan Guarantee Program (New Program)
Advantage Illinois’ new Loan Guarantee Program will support business applicants who are having difficulty gaining access to capital by using funds to guarantee a percentage of loans provided by partner lenders. By guaranteeing a percentage of the loan, it makes loans more attractive to lenders and has the potential to increase the funds received by the businesses.
• INVENT Venture Capital Program (VCP) (New Program)
Innovation Venture Fund (INVENT) will operate as a direct equity program with a focus on investing in businesses in key industries such as agriculture, ag tech, information technology, life sciences, manufacturing, quantum, and more.
• Climate Bank Finance Loan Participation Program (New Program)
This new program will be overseen by DCEO and administered by the Illinois Finance Authority (IFA), which will partner with local lenders to issue the loans. Climate Bank funds will be available to small businesses in the clean energy sector.
The programs will launch in the near future; interested businesses should fill out this form to receive additional information and updates when the programs are launched.
IDOT Building Blocks of Success
The Illinois Department of Transportation is hosting free virtual workshops in January as part of its continuing Building Blocks of Success series for Disadvantaged Business Enterprise firms interested in strengthening their skills, growing their business and bidding on state projects. New and existing DBEs, as well as firms interested in becoming certified in the program are invited.
January workshop dates and topics are:
- • Jan. 19, 10 a.m. to noon: Basic Plan Review
- • Jan. 24, 10 a.m. to noon: Marketing and Networking
- • Jan. 31, 10 a.m. to noon: IDOT EPAS System – SOIs
Future topics covered will include Excel estimating and bidding spreadsheet, bidding on the IDOT website, contracts, steps needed to be certified as a DBE firm and more. Building Blocks of Success will continue through April. Workshop information, including dates and times, is available through Eventbrite at bit.ly/DBEworkshops
Advance registration is required. Questions can be directed to IDOT’s DBE Resource Center at (312) 939-1100. Administered by IDOT, the DBE program provides minorities, women and other eligible small businesses opportunities to participate in highway, transit and airport contracts that are federally and state funded. For more information on becoming a certified DBE and learning more about IDOT resources that are available, visit www.idot.illinois.gov/dbe
Executive Vice President
Joliet Region Chamber of Commerce & Industry