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

Chamber members:

Take a look at today’s roundup for some information regarding grants awarded to local hotels, restaurants, and art programs. There is a new report on an old topic of state finances, tipped wage changes did move forward in Chicago, and the latest on Speaker of the House positioning.

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

Pritzker Administration Announces Small Business Grant Awards for B2B Restaurants, Hotels and Arts
The Illinois Department of Commerce and Economic Opportunity (DCEO) announced the conclusion of the Back to Business (B2B) Restaurants, Hotels and Arts program with $156 million provided in relief funds. Through these three programs, nearly 4,000 grants went to businesses in over 500 cities, towns and localities in 95 counties across the state. A list of Illinois B2B grantees can be found here.

“Illinois’ small business are the backbone of our economy and a cornerstone of our pandemic recovery,” said Governor JB Pritzker. “Since day one, my administration has been committed to supporting every business in our state—ensuring that every business owner and entrepreneur has the opportunity to succeed. Across the state, the Back to Business program kept thousands of restaurants, hotels, and arts organizations open, protected thousands of jobs, and kept our communities thriving.”

“The Back to Business grants are a bridge for continued economic success as the hospitality and arts sectors recover from the COVID-19 pandemic,” said Lt. Gov. Juliana Stratton. “Restaurants, hotels, and the arts enliven our state’s economy. I’m thrilled this much-needed relief supports our hospitality businesses and the arts in our communities.”

B2B Arts and B2B Restaurants grant award amounts were determined based on a percentage of revenue declines, and funding for the B2B Hotels awards was allocated based on the number of rooms. Grants had an average award amount of $39,484, with different ranges of funding available depending on the business type. The grant program utilized American Rescue Plan Act (ARPA) funding and was designed to offset losses and support job retention in the industries hardest-hit by the COVID-19 pandemic.

“The Back to Business program has been a lifeline for thousands of Illinois businesses in recent years, and the latest round of grants will help keep the doors open for restaurants, hotels, and arts organizations in every corner of the state,” said DCEO Director Kristin Richards. “Supporting employers and the state’s world-class workforce is a top priority for DCEO, and the B2B program is providing much-needed assistance to businesses while bolstering the economy.”

In order to reach hardest-hit populations, DCEO enlisted a robust network of approximately 100 community navigators to conduct outreach and provide technical assistance in communities across the state, as well as industry-specific navigators for Restaurants, Hotels and Arts, as well as additional support from other industry partners.

“It was so inspiring to see our statewide arts community work together to ensure this $50 million landed in the hands of organizations, businesses, and creative workers who suffered such loss through the pandemic,” says Claire Rice, Executive Director of Arts Alliance Illinois. “Despite ongoing challenges, our creative community continues to make vital contributions to our economy and our wellbeing, and this program offered invaluable assistance at a time when it is greatly needed. We thank the State of Illinois for dedicating this funding to arts and culture and our creative community for coming together around this opportunity. We hope the State builds on the momentum of this historic moment and continues to show its commitment to supporting the arts in Illinois.”

“We are grateful to Governor Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) for their continued support of the restaurant industry. These grants are crucial to the state’s small business community and offer a lifeline to those still recovering from the past few years.” – Sam Toia, President and CEO of Illinois Restaurant Association.

“The funding from these grants have gone a long way in supporting Illinois hotels’ ongoing recovery from the pandemic and have allowed them to rehire workers quicker, as our occupancy numbers rise closer to pre-pandemic levels. With the help of the B2B Hotel grants, we look forward to regaining our position as a key economic engine and top employer in the state. I want to thank Governor Pritzker and DCEO for their efforts to support the state’s tourism industry as we continue to welcome more visitors back to Illinois.” – Michael Jacobson, President & CEO of the Illinois Hotel & Lodging Association

“This substantial amount of funds infused into the Arts and Culture sector recognizes the immense value the arts bring to our communities. It is a resounding affirmation that the state of Illinois supports the creative economy as we have had significant losses these past couple of years. This support will unleash stability and a wave of innovation and artistic expression that will enrich our lives and propel our society forward. Let us embrace this moment with enthusiasm and gratitude to Governor Pritzker, the Legislature, and our wonderful partners at the Department of Commerce and Economic Opportunity.” – Nora Daley, Board Chair of the Illinois Arts Council

Data on Grant Distribution

A total of 3,951 businesses were provided grant awards, including:
Hotels: 720
Restaurants: 996
Arts: 2,235

Businesses received an average grant amount of $39,484 with the following median awards amounts broken out by sector:
Hotels: $62,458
Restaurants: $50,000
Arts: $5,000
85 percent of recipients did not receive any prior B2B or Business Interruption Grant (BIG) relief

Average Revenue declines between 2019-2020:
Hotels: As outlined in the statute, revenue decline was not a factor for evaluating hotel awards.
Restaurants: 28 percent
Arts: 44 percent

Funding Distributed Per Industry:
Hotels: $70.4 million
Restaurants: $37.9 million
Arts: $47.7 million

Illinois Receives Failing Financial Grade from Truth in Accounting
Illinois is facing a dire fiscal situation, as a prominent think tank dedicated to advocating for fiscal transparency, Truth in Accounting, has bestowed upon the state a failing grade. This unfavorable assessment stems from the release of the 14th annual “Financial State of the States” report by Truth in Accounting, which meticulously evaluates the financial health of all 50 states based on their annual financial reports for the fiscal year 2022.

Like numerous other states, Illinois has seen a modest improvement in its economic condition, primarily driven by federal funds allocated for COVID-19 relief and the surge in tax collections attributable to pent-up demand from tourism and consumer spending. Despite these positive trends, Illinois remains mired in a persistent crisis due to the burden of unfunded pensions and other obligations related to employee retirement.

In this report, Illinois finds itself occupying the 48th position in terms of fiscal health, accompanied by a disheartening “F” grade. Only Connecticut and New Jersey fared worse in the assessment. CEO Sheila Weinberg has raised concerns about Governor J.B. Pritzker’s assertions of a balanced budget, emphasizing that he includes borrowed federal funds as revenue. Weinberg expressed disappointment, pointing out that the governor touts a balanced budget and surplus while consistently underfunding the state’s pensions by a staggering $5 billion annually.

According to Truth in Accounting’s analysis of Illinois’ latest audited financial report for fiscal year 2022, the state carries a taxpayer burden of $41,600, signifying the amount each taxpayer would need to contribute to alleviate the state’s debt crisis.

Governor Pritzker defended the budget, underscoring its importance in making vital investments in the well-being of the state’s residents: “Responsible governance allows us to make investments in what matters most, and that’s our people,” he stated when signing the budget into law in June, asserting that the Fiscal Year 2024 budget continues the trajectory of progress.

A noteworthy observation from the report is that, on average across the United States, states have set aside only 71 cents for every dollar promised for pension benefits and a mere 11 cents for every dollar designated for retiree health care obligations. Sheila Weinberg warned that while it is encouraging to see state debt decreasing, states should not rely on temporary federal funding and heightened tax collections to remedy their enduring fiscal challenges.

On the other hand, Illinois has received positive economic news recently. The Illinois Commission on Government Forecasting and Accountability’s latest economic report for the first quarter of fiscal year 2024 indicates that the state’s overall General Funds revenues have exceeded last year’s figures by $39 million.

Chicago Votes to Eliminate Subminimum Wage for Tipped Workers
Chicago became the largest U.S. city to independently phase out the subminimum wage for tipped workers on Friday. Under the new law, the gap between the tipped and full minimum wages will shrink 8% each year until the tipped and full minimum wages reach parity in 2028.

Under existing law, Chicago bars and restaurants can pay tipped workers, such as servers and bartenders, $9.48 an hour, 60% of the full minimum wage of $15.80. If workers’ gratuities do not float their hourly wages above the full minimum wage, restaurants are required to make up the difference, although advocates argue that doesn’t always happen.

Supporters of the legislation say that working for tips keeps restaurant workers’ wages unpredictable and leaves them vulnerable to customer harassment and racial biases. Opponents, including the Illinois Restaurant Association, say the measure will cause restaurants skating by on already notoriously thin margins to cut staff, raise menu prices and close down.

An earlier version of the proposal would have phased out the subminimum wage over two years instead of five; in a statement, the restaurant association referred to the final deal as a “compromise we can accept.”

One Fair Wage, a nonprofit organization advocating to eliminate the subminimum wage around the country, estimates about 100,000 tipped workers in Chicago will be impacted. The restaurant association estimates there are more than 7,000 food service providers, including bars and restaurants, across the city. The question moving forward will be what impact the new measure has on their bottom lines.

Speaker race has no clear favorite as GOP tensions rise
The race for the Speakership is wide open as House Republicans head into high stakes stretch this week. The House GOP conference Tuesday is set to hear from its two declared candidates for Speaker: Majority Leader Steve Scalise (R-La.) and Judiciary Committee Chairman Jim Jordan (R-Ohio) — neither of whom have emerged as a front-runner in the race.

Adding to the dynamics, deposed Speaker Kevin McCarthy (R-Calif.) opened the door to a second stint as Speaker on Monday, as lawmakers deal with the reality of a House unable to act in response to the unprecedented Hamas attack on Israel that took place over the weekend. But McCarthy’s detractors appeared in no mood to allow for his return, and neither Jordan nor Scalise seemed to have a lock on the closed-door conference vote planned for Wednesday — leaving the House GOP without a clear path through the Speaker conundrum.

Any candidate can afford to lose only a handful of Republican votes on the House floor — a difficult math problem that played out over the course of the four days and 15 ballots it took for McCarthy to win the gavel in January.

With an eye toward avoiding a repeat, the House GOP conference this week may vote on a change to the rules that would require the nominee for Speaker to receive support from a majority of the House rather than a majority of the conference.

More than 90 Republicans signed a letter last week endorsing the temporary rules change, and lawmakers emerging from Monday night’s meeting voiced support for the effort. At least one House Republican, however, is opposed to the adjustment.

“I don’t agree with the rules change. … Frankly, in my view, it continues a pattern of empowering a minority,” House Rules Committee Chairman Tom Cole (R-Okla.) said Monday night. “You could have literally three or four people, and they can do it by secret ballot, basically, you know, keep you from getting to a Speaker.”

Some lawmakers said that they believe more time is needed for the conference to coalesce around someone who can get 217 votes.

Illinois Secure Choice Reminder – Zoom Recording and Slides
Don’t forget about the Illinois Secure Choice law deadline coming up at the beginning of November. 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 a recent webinar session, the Illinois State Treasurer’s Office covered the specifics of the state law and provided an overview of how Illinois Secure Choice works and how easy it is for businesses to facilitate retirement savings for their employees.

Here is the Zoom link to the recording. Attached are slides covering the program as well.

Stay well,

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