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

Chamber members:

Lawmakers returned to Springfield this week after a two-week break. This session is scheduled for a May 19 dismissal so there are a lot of bills to get through between now and then as about 700 bills moved from one chamber to the other thus far. April 28 is the next big deadline for bills to get out of committee.

Members of our chamber Government Affairs committee were in Springfield yesterday for the Illinois Chamber/IACCE lobby day. We heard from the four leaders of the Senate and House, received updates on multiple bills and policies, and met with our local elected officials as well.

Final congratulations are in order to Cesar Cardenas (Dist. 4) and Suzanna Ibarra (Dist. 5) as they join Larry Hug (Dist. 1), Pat Mudron (Dist. 2), and Sherri Reardon (Dist. 3) as City of Joliet District Council members after final vote counts were announced yesterday.

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

Weekly Budget Update

The biggest unsettled issue in Springfield is the state budget. With revenues projected in the neighborhood of $50 billion, Gov. JB Pritzker has floated the idea of unspecified tax cuts. But a recent report from the Commission on Government Forecasting and Accountability noted revenues are expected to decline in the next three years, and unchecked spending would once again lead to budget deficits after a three-year stretch of surpluses.

The state’s final revenue estimate for the upcoming Fiscal Year 2024, however, is likely to be heavily dependent on April revenues. Since the month coincides with tax filing, it represents an outsized portion of the annual state revenue pie. A strong stock market performance generally drives up revenues, while economic woes could drive estimates downward.

While COGFA has noted in previous reports that it has been conservative in its estimates for the final quarter of the current fiscal year, the April returns could mean a difference of tens of millions of dollars in either direction as lawmakers craft their final budget. COGFA’s monthly revenue reports are generally published at the beginning of each month.

Business groups ask lawmakers to address Illinois’ biometric privacy law
Illinois is known for having the strictest biometric privacy laws in the country, but that may change.  The Illinois Supreme Court ruled against the burger chain White Castle in February and said each time a person’s biometric data is collected, it is a violation of the Biometric Information Privacy Act. The company was using finger scans for employee time clocks.

White Castle is facing potential lawsuit damages of up to $17 billion as a result of the ruling. The high court suggested the Illinois General Assembly may want to take up the issue for possible changes. Because of the implications for any company that uses biometric identification technology in Illinois, 13 business groups filed “friends of the court” briefs supporting White Castle’s contention that employees need only be asked once for permission to relay their data.

During our event in Springfield with the Illinois Chamber of Commerce Tuesday, Senate Minority Leader John Curran, R-Downers Grove, said in its current state, the law is flawed. “I am disappointed at the recklessness that the Democratic majority displayed in passing the most onerous, trial-friendly BIPA law in the nation,” Curran said. “Illinois is one of three states with a BIPA law, but the only one without security exemptions.”

A coalition of business, technology and health care groups have called on the legislature to make changes to BIPA. The group wants the law updated to require proof that actual harm occurred to individuals before imposing fines. They also want to establish a “notice and cure” period, which would allow businesses to address any potential issues in instances where there has been no actual harm. Another modification to BIPA they want is to rectify the recent court decision that found every incident is a separate violation resulting in exponentially higher awards. They also want businesses to be allowed to use biometric technology for routine human resources and record-keeping purposes including time clocks.

Illinois House Speaker Emanuel “Chris” Welch, D-Hillside, said changing the law must be a bipartisan effort. “BIPA is really a complex issue, and I don’t think any one person or party is going to have a solution to it,” Welch said at the Camber event.

Illinois is the only state that allows individuals the right to sue over the improper collection of biometric data.

Gov. Pritzker Announces $14 Million in Grant Awards for Human Service Providers
Governor JB Pritzker joined the Department of Human Services (IDHS) and the Department of Commerce and Economic Opportunity (DCEO), along with state and local officials to announce over $14 million in awards to 70 human services providers throughout the state. The grants are being provided through the first-ever competitive Human Services Capital Investment Grant program, designed to help social service providers address physical construction and accessibility needs.

“Thanks to our Rebuild Illinois Capital Plan, I am proud to announce that we are awarding more than $14 million to 70 human services organizations from 24 counties up and down the state to address much-needed infrastructure improvements,” said Governor JB Pritzker. “Supporting these providers is an integral part of my FY24 budget proposal, which calls for the highest-ever statewide commitments to early childhood, developmental disability, mental health, substance use, and homeless prevention services. Thousands of lives will benefit from this investment.”

“When people need help, human service providers are there to answer the call and provide resources and care,” said Lt. Governor Juliana Stratton. “These grants will ensure that this great work is delivered at its best by strengthening and addressing infrastructure needs. Thank you, Governor Pritzker, IDHS, and DCEO for making these grants possible and always putting the wellbeing of Illinoisans first.”

Non-profits are accustomed to vying for operational and program funding from the government but have not previously had an opportunity to receive capital construction funds. This first-of-its-kind “small capital” initiative, administered by IDHS and DCEO, awarded organizations in 24 counties $50,000-$250,000 through the Rebuild Illinois capital program.

This $14 million in funding will address much-needed capital improvements for eligible Illinois not-for-profit human services providers. Each awardee has worked with one or more of IDHS’ six divisions: Developmental Disabilities, Early Childhood, Family and Community Services, Mental Health, Rehabilitation Services, and/or Substance Use Prevention & Recovery.

Illinois received more than 450 applications from human services providers throughout the state. The program was designed to prioritize disproportionately impacted areas, the expansion of human services, and to address fire prevention and mitigation (ex. installation/replacement of fire sprinkler systems/fireproof doors, etc).

Projects receiving funding included Stepping Stones and Cornerstone Services here in Joliet.

“The commitments announced today will strengthen the IDHS partners who keep our communities vibrant,” said Grace B. Hou, Secretary, Illinois Department of Human Services. “We are grateful to Governor Pritzker, our colleagues at DCEO, and to every organization who applied for this unprecedented funding. Today’s awards demonstrate our commitment to building up the community-based organizations that are making a difference every day for communities in need.”

“The DCEO team is proud to work with IDHS on this unprecedented job-creating partnership,” said Kristin A. Richards, Director, Illinois Department of Commerce and Economic Opportunity. “We’re thrilled to help social service non-profits build and grow — whether by installing new building ramps and sprinklers, repairing elevators and bathrooms, or furnishing other long-needed improvements. These grants will expand the reach and deepen the impact of key community resources across Illinois.”

Report: Tuition costs skyrocketed at public colleges amid 20 years of state disinvestment
As University faculties around Illinois strike for better pay and working conditions, budget analysts have found that state spending on higher education has fallen dramatically over the past 20 years. When adjusted for inflation, state spending on higher education fell 46 percent between 2000 and 2023, according to a new research report from the left-leaning think tank Center for Tax and Budget Accountability.

This mirrors a less extensive data analysis from the Illinois Board of Higher Education, which found that the buying power of 2021 higher ed appropriations is 55.5 percent of what it was in 2002. “At this point, there has been such a decline and such an underfunding of the system, (the state) has essentially disinvested itself,” CTBA Associate Director for Budget and Policy Allison Flanagan told Capitol News Illinois.

In 2002, state funding accounted for approximately 72 percent of revenue for state universities, with the rest coming mostly tuition and fees. In 2021, 35.7 percent of university revenue came from the state, with 64.3 percent coming from fees, according to the report.

These effects are felt more acutely by low-income families. For families in the bottom fifth of income, tuition and fees for a 4-year public university represent at least 101 percent of that household’s income, according to the report.

It’s Time to Reauthorize the SBA and Listen to Small Business Owners
The last time the Small Business Administration (SBA) was formally reauthorized by Congress was over two decades ago and the vast majority of small businesses support reauthorization. The 118th Congress can get it done.

Why does it matter? Our country is experiencing an unprecedented growth in new business applications. To support small business founders looking at new ways to start, run, and grow their businesses, Congress and the Administration must look to modernize how the U.S. Small Business Administration (SBA) helps serve the small business community.

What small businesses say – 88% of small businesses support reauthorization of SBA, and the reauthorization process would be a chance to examine areas of improvement and double down on SBA strengths. The first step in doing that is modernizing the Regulatory Flexibility Act (RFA).   The RFA, which is overseen by SBA’s Office of Advocacy, is the federal statute intended to give small businesses a voice in regulatory decision making—and it is also sorely due for an update.

The time is now for SBA reauthorization starting with modernizing the Regulatory Flexibility Act.

Debt Limit Dance
First up, Speaker Kevin McCarthy (R-Calif.) gave a speech at the New York Stock exchange on the debt ceiling, which is expected to reach a crisis point later this year. McCarthy’s pitch for a “responsible” debt ceiling increase will preview a fresh proposal for debt limit negotiations, although his stance is expected to remain the same: that House Republicans won’t back a debt limit solution that doesn’t include steep spending cuts. But he’ll be laying out some of those cuts.

McCarthy’s proposal included major restrictions on food assistance for millions of low-income Americans, something that isn’t likely to survive in the Senate. The plan is to expand the ages of people who need to work in order to participate in the Supplemental Nutrition Food Assistance Program.

​House Republicans are fleshing out the details of a bill that would lift the debt limit through May 2024, cap discretionary spending and include other party economic priorities. But as the conference begins to coalesce around the details of the legislation, there’s a debate brewing on how quickly the House needs to act. Some Republicans want to vote on a bill this month, while others are cautioning against setting self-imposed deadlines as they work through complex intraparty dynamics.

The Treasury Department has estimated it could run out of cash to continue paying debt obligations as early as June, although other experts have said the “x date” could come as late as September. The deadline is for a final bill that can get through both chambers and be signed into law, but the GOP measure is just an opening bid in negotiations they’re trying to jumpstart.

House Republicans have been unsuccessful so far in convincing President Joe Biden and top congressional Democrats, who are insisting on a clean debt limit increase, to even discuss their conditions. But Speaker Kevin McCarthy has said there’s no scenario in which Republicans will accept a clean debt limit bill.

The bill GOP leaders are drafting is designed to show the types of spending cuts and “pro-growth” policies their party would accept in exchange for lifting the debt limit — as well as what they can get their members to support. Democrats have questioned whether Republicans, who have a narrow four-seat majority, can get 218 votes to pass anything.

McCarthy said last month as the House departed for the two-week Easter and Passover recess that Republicans were “very close” to reaching internal agreement on debt limit legislation modeled after broad policy ideas he floated in a letter to President Biden.

Details emerging
Several sources familiar with the negotiations confirmed the bill that is being drafted would lift the debt limit through May 2024 and set a cap on discretionary spending for at least fiscal 2024 and potentially limit appropriations growth over the next decade to somewhere in the ballpark of 1 percent to 1.5 percent annually.

It would also rescind unobligated pandemic funding; block Biden’s student loan forgiveness executive actions; institute work requirements for some federal benefit programs; and include at least some provisions of the House-passed energy package. GOP lawmakers also want to include a measure requiring congressional authorization for major administration regulatory initiatives.

Repeal of energy tax provisions from last year’s budget reconciliation package are also in play. House Ways and Means is holding a hearing next week on that topic, which is getting renewed attention now that several independent analyses argue initial cost estimates could balloon due to high demand.

The details, first reported by Punchbowl News, are somewhat in flux as leaders work with various factions of the conference to determine what provisions will earn broad support. For example, GOP leaders have not settled on a specific discretionary spending cap and whether to set an overall limit for both defense and nondefense accounts or just a cap on the latter.

One possibility that’s been discussed is capping nondefense discretionary spending at $584 billion, which would represent a 22 percent cut from fiscal 2023 enacted levels if veterans funding is included. That could leave some room for at least a slim boost to military and related accounts while holding overall discretionary spending to the roughly $1.5 trillion fiscal 2022 topline conservatives have pushed. Biden has asked for a 4 percent defense increase, which some GOP hawks have said is too small. If veterans’ discretionary funds are protected from cuts, reductions to all other nondefense accounts could creep closer to 30 percent.

Other cuts the GOP plans to include would come from mandatory spending, like the savings from imposing work requirements on certain benefit programs. Republicans are eying provisions to tighten work requirements for the Supplemental Nutrition Assistance Program that would make it harder for states to waive existing law.

That source also said the amount of pandemic aid Republicans expect to recapture could be in the $70 billion range, a figure which leaders of the Republican Main Street Caucus cited in a letter to McCarthy laying out their requests for a debt limit package. Main Street members had informally shared their requests with leaders weeks ago before the public letter.

While Republicans are not planning to touch Social Security or Medicare benefits as promised, Main Street members and others are pushing to include a provision setting up a bipartisan commission to come up with solutions to ensure the long-term solvency of those programs.

The Main Street letter from co-chairs Dusty Johnson of South Dakota and Stephanie Bice of Oklahoma said the commission should have six months to develop a plan that keeps Social Security and Medicare benefits off the table. However, they wrote that the proposal should “identify unnecessary spending related to” the two major benefit programs for seniors and “direct those savings toward strengthening those two programs.”

Legislation based on the commission’s findings would be privileged and receive a floor vote within 60 days.

Democratic Senators favor forcing House vote on debt limit increase
Democratic senators are getting antsy over the lack of progress on legislation to avoid a national default and want House Democrats to begin working on a plan to force Republicans to vote on a bill to raise the debt limit. Democratic senators want to avoid a summer standoff on extending the nation’s borrowing authority, which would rattle financial markets and the broader economy that may be heading toward a mild recession in the second half of the year.

House Minority Leader Hakeem Jeffries (D-N.Y.) has shelved the idea of circulating a discharge petition to force a vote on a clean debt limit increase, opting instead to put pressure on Speaker Kevin McCarthy (R-Calif.) to schedule such a vote himself. But McCarthy is showing no signs of backing down from his demand that President Biden agree to big spending cuts in exchange for raising the debt ceiling, even as Biden refuses to negotiate and House Republicans have been unable to unite on specific demands.

That’s led some Senate Democrats to say their House counterparts should start working on a procedural maneuver known as a discharge petition as an emergency backup plan in case McCarthy continues to dig in his heels.

“I think that they should definitely file a discharge petition in the House. I think they should file a couple of bills that provide a menu of options. They should file a number of options and then be prepared to move forward on discharge petition,” said Sen. Chris Van Hollen (D-Md.), who served in the House leadership before winning election to the Senate.

Sen. Richard Blumenthal (D-Conn.) said he’s “deeply concerned” about the danger of a national default later this year. “Every passing day leaves me more deeply concerned because they don’t seem to be constructively interested in a path forward,” he added of House Republicans.

Members of the House minority can use the House discharge rule to bring a bill to the floor without the support of the majority’s leadership by collecting signatures from a majority of the chamber’s members. Democrats control 213 House seats, which means they would need at least five Republicans to get the 218 signatures they need.

Democrats in both chambers think they could get a handful of moderate Republicans to sign a petition to circumvent McCarthy to avoid a default if there doesn’t appear to be another viable option, though none have publicly said they would do so. Any debt limit measure to be moved with a discharge petition would have to be referred to a House committee at least 30 days before attempting to move it to the floor.

Further complicating the picture, lawmakers may also have to file a motion to discharge a rule from the GOP-controlled Rules Committee establishing the process for how the debt-limit measure is handled on the floor. And the House’s Rule XV states that motions to discharge bills and resolutions from committees shall be in order only on the second and fourth Mondays of a month.

Stay well,

Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
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