“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
First of all, Happy Thanksgiving to everyone. We’re extremely thankful for the support of our membership.
A Federal government shutdown was once again averted with a continuing resolution bill running through mid-January and the beginning of February. The CR, which cleared the House and Senate last week, funds four appropriations bills through January 19th and eight appropriations bills through February 2nd.
Over the past six months or so, I’ve been sharing information on the number of new employment laws that were signed and will begin in 2024. Quite possibly the most important one is the Paid Leave for All Workers Act (PLAW) that begins January 1. This is something that ALL organizations need to be aware of as it impacts ALL employees.
We will be hosting a webinar on Thursday, December 7th from 8:30 to 10:00 AM on this subject along with a Proposed Exempt Salary Overtime Threshold and the NLRB’s Joint Employer Rule.
For more information and to make a reservation, use this link: https://members.jolietchamber.com/events/details/2023-december-legislative-coffee-with-scott-cruz-6890
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Will County Approves FY24 Budget
County Executive Jennifer Bertino-Tarrant has released a statement following yesterday’s vote by the County Board to approve a balanced Fiscal Year 2024 Budget. The budget contains several special allocations for public safety, social services, and essential government services.
“I appreciate that the Board has approved a balanced budget that prioritizes public safety and ensures that county government can meet the needs of residents,” said County Executive Bertino-Tarrant. “This budget addresses key public safety challenges, including funding six new public safety positions, raising salaries for prosecutors to help address vacancies, and providing $1.3 million in new investments aimed at reducing recidivism.
We’re also investing in impactful social services, such as the Children’s Advocacy Center, our eviction diversion program that deters homelessness, and the Rapid Response Program that is fighting the worsening opioid crisis. I look forward to working with countywide elected officials to get to work in implementing this budget.”
The County Board approved an $815 million budget. The budget includes $272 million for the Corporate Fund, which is used for county operations, and $543.2 million for various Special Funds that are restricted for a specific purpose, such as motor fuel taxes, departmental fees, and Health Department services.
The budget allocates nearly $3 million in public safety and social services, using revenue from the Cannabis Sales Tax and funds from the multi-county opioid settlement. These allocations include the following:
- $450,000 – Housing Stabilization Program – Will County’s eviction diversion program to deter homelessness by working with residents who are summoned to eviction court.
- $180,000 – Workforce Services – Supporting a new re-entry program to connect those who have been through the criminal justice system with stable, long-term employment.
- $345,000 – Funding to support the Children’s Advocacy Center operations.
- $200,000 – Sheriff’s Adult Detention Facility – Expanding mental health services to inmates.
- $750,000 – Problem Solving Courts – Supporting building improvement needs at recovery homes.
- $250,000 – Rapid Response Program – Increased support for the Health Department’s substance abuse program to address the ongoing opioid crisis.
Also included in the budget was over $10 million in capital projects. For the second year, the Will County Executive Office proposed capital projects to be funded using a long-term planning process that ensures the responsible allocation of funds. These projects include $4.5 million to replace the roof of the Adult Detention Facility, $1.3 million to purchase modern tasers for the Sheriff’s Department, $385,000 to modernize the Health Department Community Health Center’s call center, and $150,000 to support local stormwater initiatives to improve water quality and flood mitigation.
Additional funding was also allocated for the County’s Will-Ride Program, which provides paratransit services in Eastern Will County. The $200,000 increased allocation will allow for implementation of short-term goals identified in the Access Will County paratransit study, which aims to improve mobility for seniors and people with disabilities.
The budget also prioritizes the environment, with allocated revenue from the County-owned Prairie View Landfill to fund Will County’s various high-demand recycling and reuse programs. Also included is the first year of revenue from the County’s Renewable Natural Gas (RNG) Plant, which repurposes landfill gas to be sold as clean transportation fuel. In its first year, the RNG Plant produced the equivalent of 133,341,000 miles (6,000,345 gallons of gasoline) in clean fuel for large transportation vehicles.
Fiscal Year 2024 begins on December 1, 2023.
Milestone Achieved for Rainy Day Fund
Illinois’ “Rainy Day Fund” has achieved a significant milestone, surpassing the $2 billion mark following a recent deposit of $11.5 million, as announced by Illinois Comptroller Susana Mendoza.
Comptroller Mendoza emphasized the critical importance of a robust reserve, highlighting the potential jeopardy faced by essential programs such as education, transportation, and elder care during crises if Illinois lacks a strong financial cushion. She pointed out that the state’s commitment to building up the Rainy Day Fund played a role in securing its ninth credit upgrade.
The latest deposit includes $7.743 million in interest earned from the fund’s balance and a mandatory $3.75 million transfer required by law. Comptroller Mendoza underscored the necessity of self-discipline and legislative determination to prioritize building a Rainy Day Fund over addressing short-term needs. Despite lacking the glamour of ribbon-cutting ceremonies, she emphasized that a healthy Rainy Day Fund and a reduced pension shortfall lay the groundwork for a financially sound Illinois poised for future growth.
$25 Million Available in B2B Grants for New Businesses
The Illinois Department of Commerce and Economic Opportunity (DCEO) announced $25 million in available grant funding through the Back to Business (B2B) NewBiz program. Following state recovery programming for businesses totaling $1.5 billion, the latest American Rescue Plan Act (ARPA)-funded opportunity is designed to provide additional support for businesses in hard-hit sectors who launched during the pandemic. Businesses that launched in 2020 or 2021 and remain in operation have faced significant impacts during the pandemic, but they have not been eligible for other federal or state relief programming since they were not operational prior to the pandemic.
To provide hands-on support and raise awareness about the program, the State has mobilized a network of nearly 100 community navigators across Illinois. Applicants are encouraged to visit b2bnewbiz.com to learn more and apply.
Applications are open from November 30 through January 11, 2024, and awards are expected to be made several weeks after the deadline date. All eligible applicants will receive a grant as long as the business meets eligibility requirements and submits proper documentation and attestations.
To qualify for the B2B NewBiz program, businesses must have launched between January 2020 and December 2021 and be in an industry that was particularly impacted by the pandemic (As outlined here), or a business that was started by an individual or individuals that became unemployed during the pandemic. Eligible funding amounts are based on when the business was established and whether the business is home-based or operating out of a “brick-and-mortar” establishment.
Learn more here.
Annual Report on State Tax Climate Unfavorable to Illinois
A conservative-leaning think tank, the Tax Foundation, which evaluates the tax climate of each state, has downgraded its assessment of Illinois in its annual State Business Tax Climate Index report. This Washington, D.C.-based nonprofit policy group focuses not only on the amount of taxes imposed but also on the structure of tax systems.
The report utilizes an index score, considering over 120 variables that shape corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and property taxes. The emphasis is on business-friendly models that reduce tax burdens for individuals and corporations, prioritizing simplicity, transparency, neutrality, and stability.
Tax Foundation Senior Policy Analyst Katherine Loughead explained that states ranking higher on the index tend to attract more business investments. Unfortunately, this year marked a downturn for Illinois, with its lowest index score in the past decade, sliding to No. 37 in national rankings. This is a drop from the No. 25 position held in 2017 during the tenure of Republican Gov. Bruce Rauner.
Changes to the corporate tax structure in Illinois played a role in this decline. The state, previously categorized as having an unfavorable corporate tax climate, is now considered among the worst in the country. Loughead attributed this primarily to the expiration of full expensing for investments in machinery and equipment purchases, putting Illinois at a disadvantage compared to states offering bonus depreciation.
The Tax Foundation also criticized Illinois for its property taxes, unemployment insurance taxes, and sales taxes. However, one positive aspect in the index is Illinois’ flat individual income tax rate of 4.95%, preferred over tier-based systems. Loughead highlighted that if Illinois were to adopt a graduated income tax, especially at a high rate, it could significantly lower its score.
Illinois’ overall decline is also influenced by changes in tax codes in other states, such as Iowa and Ohio, which made substantial improvements, making Illinois stand out as more of an outlier over time.
NLRB Creates NEW Joint Employer Test
The National Labor Relations Board (NLRB) has officially released its new Joint Employer Rule, which establishes a significantly lower threshold for determining joint liability and responsibility under the National Labor Relations Act (NLRA) for unfair labor practices or collective bargaining obligations committed by another entity. In essence, this new NLRB rule broadens the scope of joint employment, no longer necessitating the exercise of actual or direct control. Instead, it recognizes contractual authority as “probative” and sufficient to establish joint employer status.
This revised rule has far-reaching implications for private sector employers in various industries. It is expected to impact staffing agencies and their clients, franchisors and franchisees, as well as construction contractors the most. Crucially, control need not be actively exercised, and it need not be direct. The NLRB’s expansion of joint employer status hinges on two key aspects: reserved control and indirect control.
Reserved Control: Under this category, the fine print in contracts that enables one employer to ensure another’s compliance with legal obligations and contractual responsibilities may suffice, even when these terms are essential due to workplace laws and regulations. Any contractual reservation that outlines how work is to be performed or affects the terms and conditions of employment can hold legal weight under this new rule.
Indirect Control: In this context, indirect control refers to scenarios where one employer communicates work assignments and directives to another entity’s managers or exercises ongoing oversight over the specific methods of employee performance. This level of indirect control can trigger joint employer status.
Crucially, this control, whether actual or reserved, and direct or indirect, must pertain to “essential terms and conditions” of employment. The new rule identifies seven such terms and conditions:
- Wages, benefits, and other compensation.
- Hours of work and scheduling.
- Assignment of duties.
- Supervision of duty performance.
- Work rules, directions, and grounds for discipline.
- Tenure of employment, encompassing hiring and discharge.
- Working conditions related to employee safety and health.
What Comes Next? Legal challenges to this rule are already in progress. However, until and unless the rule is invalidated, the NLRB and affiliated labor unions are likely to seize every opportunity to hold multiple employers liable under the NLRA. This particularly affects staffing companies and their clients, as well as franchisors and their franchisees. Employers who depend on another employer’s workforce should seek legal counsel to address these matters and carefully review relevant contracts.
Job Openings and Legal Immigration
Between August and September, job openings saw a notable increase of 56,000, resulting in a current surplus of 3.2 million job openings compared to the number of unemployed workers. This imbalance is anticipated to persist due to a structural shortage of workers that is expected to endure in the foreseeable future.
Despite ongoing hiring by businesses and a workforce with confidence in seeking better opportunities, the scarcity of workers, particularly felt by small businesses, remains a daily challenge. Addressing this challenge requires a focus on modernizing the legal immigration system to better align with the evolving needs of businesses. By securing borders and updating immigration laws to facilitate the entry of more workers into the U.S., we can foster business growth and prosperity.
The workforce shortage, relative to our population, is a chronic issue that will continue impacting businesses in the long term. The demographic reality of an aging and shrinking workforce is becoming increasingly evident. As the subsequent generations after the Baby Boomers are notably smaller, the retirement of Baby Boomers contributes to a contraction in the labor force. Additionally, as individuals age, their consumption of resources increases while their contributions diminish, posing a significant challenge for businesses. The problem of worker scarcity is anticipated to persist for many years.
To tackle these challenges, policymakers can implement the following steps:
- Reform the legal immigration system to accommodate workers with diverse skill levels.
- Enhance opportunities for second chance hiring.
It’s crucial to acknowledge that employers can responsibly bridge the labor gap by leveraging the capabilities of artificial intelligence and other emerging technologies. While concerns about the impact of AI are prevalent, taking proactive measures, including the aforementioned steps, can ensure that the adoption of AI doesn’t need to occur at an accelerated pace.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct