Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Today we look at information about pensions and rent control here in Illinois. On the federal level, the latest on a potential government shutdown and a survey on issues for the next election.
Don’t forget about the Illinois Secure Choice law deadline coming up at the beginning of November. Information is at the end regarding a seminar on the topic.
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Illinois lawmakers discuss pension debt measure at hearing
Illinois legislators met for the third time Wednesday to discuss a measure that aims to provide an additional $500 million yearly for the state’s pension systems to address massive unfunded liabilities.
House Bill 4098, which has been the center of conversation during these hearings, would allow the Illinois treasurer and comptroller to transfer $500 million from the General Revenue Fund to the Pension Unfunded Liability Reduction Fund each fiscal year. Those funds would then be used to make payments into the state’s systems. The House Personnel & Pensions Committee discussed HB4908 in downtown Chicago along with officials from the Teachers’ Retirement System and State Employees’ Retirement System.
State Rep. Steven Reick, R-Woodstock, told The Center Square that the measure would do several things to the state’s pension system. “House Bill 4098 is an omnibus bill; it covers a whole lot of stuff,” Reick said. “It doesn’t just cover the safe harbor provisions of tier 2 [pensions]; it also handles the issues of buyouts, and it handles the drop. It is certainly not in final form.”
Reick said the hearings have been helpful in working out some of the kinks of the bill. “We still have some other issues to talk about on 4098,” Reick said. “It is a laundry list of changes all of which need to be made to the pension plan but not all of which I think belong in the same bill.”
Legislators plan to work on the measure throughout the summer and fall and attempt to get the bill passed during the next legislative session. “Basically, again, we have three more hearings on various aspects of the bill that we are going to have before we put it together in final form and then see what it looks like,” Reick said.
The committee’s chair, state Rep. Stephanie Kifotwit, D-Oswego, said lawmakers will be discussing another measure when the time is right. “This is a working group, and there will be another bill that we will work on because we are looking and researching and taking in a lot of information with regard to this subject and many other subjects,” Kifowit said during the hearing.
The state manages five pension funds. The Teachers’ Retirement System covers retired teachers from across the state, except for Chicago. Combined with TRS, the State Universities Retirement System, the State Employees’ Retirement System, the Judges’ Retirement System, and the General Assembly Retirement System have an unfunded liability of at least $140 billion. Combined, they are funded at only about 42% of what is needed. The pension system for lawmakers is the worst-funded at approximately 19%.
Towns could opt out of Illinois rent control ban under proposed law
Individual towns and cities could decide the statewide ban on rent control no longer applies to them — that is, if legislation proposed in Springfield passes. Rent control has been prohibited everywhere in Illinois since 1997, but in the past several years, affordable housing advocates hoping to put caps on fast-rising rents have been pushing to lift the ban statewide.
Now state Rep. Hoan Huynh, whose 13th District includes north lakefront neighborhoods heavily populated by renters, is pushing to let municipalities to lift the ban within their own boundaries. HB 4104, also known as the Let the People Lift the Ban Act, is Huynh’s proposal, introduced June 6 in the Illinois House. It would allow local governments to adopt rent-control provisions if a majority of voters in the locality support a pro-rent control referendum.
Wherever it’s been put on the ballot, rent control has received support. In 2018 and 2019, more than 60% of voters approved in all three advisory referenda put before several Chicago precincts in wards with a high proportion of renters.
The push to reintroduce rent control simmered during the COVID pandemic, when Illinois provided millions of dollars in assistance to renters using federal money from the CARES Act. With those forms of aid now largely gone, the drive for rent control is reviving.
While statewide efforts to lift the ban move slowly, “it makes a lot of sense to empower local communities to make the decision themselves if they should opt out of the current ban on rent control,” said state Sen. Mike Simmons, whose 7th District covers the lakefront from Rogers Park to Wrigley Field. “There is definitely growing unrest with folks who are renters all across the state who feel like they’re being gouged by double-digit rent increases,” Simmons said. “They’re seniors on fixed incomes, middle-aged adults who are empty-nesters or younger employees who can’t afford the rent increases.”
Opponents of rent control, including property owner groups, contend that imposing a cap on rent increases will stifle landlords’ investments in improving their properties and ultimately lead to lower-quality rental housing.
If Huynh’s legislation passes, the route to rent control would likely still entail at least two more steps: first, a municipal referendum to gauge local support for rent control. Then, if a majority supports rent control, the creation of a specific program to implement it. The legislation does not provide for a swift single step where a local government opts out of the ban and directly into rent control.
Simmons said the aim of the proposed legislation is local control over the question. “It’s a common-sense proposition to let local communities opt out of a ban that’s been in place for almost 30 years,” he said. “It’s a good democratic step forward.”
Government Shutdown – One Month Away
With the impending September 30 deadline for government funding fast approaching, Congress is in a race against time to secure the necessary funds. However, a contingent of House conservatives remains unperturbed by the prospect of a government shutdown, and some are even embracing it. These staunch Republicans argue that halting the government’s operations is a more palatable option than allowing the current trajectory of spending to persist.
Representative Ralph Norman (R-S.C.) expressed his perspective on the matter, stating, “If a shutdown occurs, then so be it if they’re not gonna stick to what Speaker Kevin McCarthy (R-Calif.) agreed to, which is starting on a path of financial security, which we don’t have.”
Another member of this camp, Representative Bob Good (R-Va.), took an even bolder stance. He highlighted that a substantial portion of the government—around 85%—would continue functioning during a shutdown, suggesting that most Americans wouldn’t even notice its effects. Good emphasized that utilizing the prospect of a shutdown as leverage could be instrumental in compelling Democrats to concede to spending cuts and the cessation of policies that he believes are detrimental to the American populace.
While these Republicans advocating for a shutdown represent a small fraction within the GOP conference, their stance adds complexity for Speaker McCarthy. He’s faced with the challenge of keeping the government operational while also addressing the demands of his right-leaning colleagues, who are pushing for more pronounced spending reductions and policy changes within the appropriations process.
McCarthy’s strategy involves rallying House Republicans to support a “short-term” continuing resolution (CR) aimed at extending government funding beyond September 30. As both chambers grapple with the intricacies of the funding process, progress has been limited. The House has managed to pass just one of the twelve regular appropriations bills, while the Senate has yet to achieve any. With only 11 legislative days remaining until the close of fiscal year 2023, the task at hand is growing more urgent.
Addressing the situation, McCarthy conveyed, “I don’t think anybody wants a government shutdown,” during a recent interaction with reporters in Syracuse, New York.
What Businesses Want to Hear During this Election Season
Business is the backbone of America, generating employment opportunities and fostering vibrant communities. As we navigate this election season, it’s imperative that we gain insights from candidates regarding their strategies for enhancing government efficacy in bolstering the economy.
U.S. Chamber of Commerce Executive Vice President, Neil Bradley, emphasizes that there’s significant room for improvement, stating that “our elected officials could achieve much more by prioritizing support for small, medium, and large American businesses.”
A recent survey returned several key issues that are pertinent to American businesses:
- Workforce Shortage: The pre-existing labor shortage, exacerbated by the pandemic, has escalated further. With Baby Boomers retiring and insufficient replacements from younger generations, this scarcity appears to be the new norm.
- Trade: Trade holds significance for businesses of all sizes. Yet, the United States hasn’t forged a new trade agreement with a partner in over a decade. While we’ve remained stagnant, other nations have surged ahead, entering into 100 new trade deals.
- Government Policy Complexity: An escalating risk confronting businesses of all scales is the uncertainty posed by government policies. It’s not merely excessive regulations but the fact that the government’s approach undergoes fundamental shifts every few years. This upheaval hampers businesses’ ability to strategize and invest for the long haul.
The American populace embraces the principles of free enterprise, and as evidenced by Chamber polling, voters are uninterested in witnessing the government embroiling businesses in culture wars or excessively managing their decisions.
Empowering consumers to make choices and allowing the market to function isn’t solely prudent in terms of business sensibilities; it also offers valuable political counsel. Voters rally behind policies that foster growth and candidates who champion businesses in generating employment opportunities and fortifying the economy. During this election cycle, it is imperative that candidates clearly outline their strategies for achieving these goals.
Illinois Secure Choice Webinar: What Small Business Owners Need to Know about the IL State Law
Date & Time: Sept. 13, 2023, 02:00 PM
Description: Illinois state law now requires that every private-sector employer that has been in business for at least 2 years and that had 5 or more Illinois employees last year must offer their own qualified retirement plan or facilitate the Illinois Secure Choice retirement savings program.
In this session, the Illinois State Treasurer’s Office will cover the specifics of the state law and provide an overview of how Illinois Secure Choice works and how easy it is for businesses to facilitate retirement savings for their employees.
This session, led by Christine Cheng and Jaimee Niles, is open to chamber professionals and chamber members.
Bios:
Christine Cheng serves as Director of Secure Choice for the Illinois State Treasurer’s Office. In her role, she oversees implementation and expansion of Illinois Secure Choice to improve retirement savings access for private-sector workers, helping to ensure that more Illinoisans can retire with dignity.
Jaimee Niles is the Illinois relationship manager for Ascensus, the third-party administrator for the Illinois Secure Choice program. In her role, she is the key point of contact for employers as they learn about and facilitate the Illinois Secure Choice program. Her focus is to both educate and support employers throughout the onboarding and administration process of the program and be a resource to employees who want to better understand their savings opportunities so they can make an informed decision about their participation in the program.
Link to register: https://us02web.zoom.us/meeting/register/tZMpc-mqpzIrE9O4-a7rwnODg6jnkZZJSTWB#/registration
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct