Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Illinois legislators returned to the state capitol Tuesday for the spring session. Governor Pritzker will deliver his budget and State of the State address on Wednesday, February 21. Details of that budget will be top of mind for many as indications point to the need for a balancing act on many priorities. This Friday is a filing deadline for all new legislation in both the Senate and House.
*Government Affairs Roundup brought to you by CITGO*
Bipartisan Support for $78 Billion Tax Bill
Last week, the House greenlit a $78 billion tax bill aimed at enhancing the child tax credit and reintroducing business deductions revoked during the prior administration. This bipartisan, bicameral legislation, known as the Tax Relief for American Families and Workers Act, now heads to the Senate for deliberation.
In a resounding display of bipartisanship, the bill passed the chamber with a vote of 357-70, a rare occurrence in a Congress marked by intense partisan divisions and labeled as notably unproductive. This session, it stands out as one of the few nonessential bills with potential for enactment.
The tax bill seeks to bolster the child tax credit by raising the maximum credit per child from $1,600 to $2,000 until 2025, with adjustments for inflation in 2024 and 2025. Additionally, it proposes a 12.5 percent increase in the ceiling for the low-income housing tax credit until 2025, along with a reduction in the threshold for bond-financed buildings to qualify for the credit.
Furthermore, the bill reinstates three business deductions eliminated by the 2017 Tax Cuts and Jobs Act, notably permitting businesses to deduct research and development costs annually rather than over a five-year period.
Notably, the tax legislation does not include an increase in the SALT deduction, which had been a point of negotiation throughout the process.
Illinois Chamber Employment Law Council: Paid Leave Rule Goes to JCAR
Scheduled for second notice on the agenda of the Joint Committee on Administrative Rules (JCAR) is the proposed rule by the Illinois Department of Labor (IDOL) to implement the Paid Leave for All Workers Act. The Illinois Chamber Employment Law Council submitted comments to the Department on December 18, 2023.
The Employment Law Council has examined the proposed changes to the rule put forth by IDOL. The chamber intends to persist in advocating for the changes we requested but were not addressed by IDOL during discussions with JCAR. Additionally, the JCAR agenda includes deliberations on the rule concerning amendments to the Day & Temporary Labor Act enacted last year. The emergency rule lapsed last month, and the proposed rule is pending consideration by JCAR.
Court Rulings Open a Revisit of Biometric Information Privacy Act
Nearly a year ago, the Illinois Supreme Court urged the General Assembly to clarify a 15-year-old law that has resulted in numerous lawsuits and substantial settlements with companies accused of unlawfully collecting Illinoisans’ biometric data. Now, Democratic leaders in the legislature are poised to reopen discussions on reforming the state’s Biometric Information Privacy Act (BIPA), following opposition from business groups last spring.
State Senator Bill Cunningham, D-Chicago, a prominent figure in the Senate, stated that the proposal he introduced this week strikes a balance between addressing business groups’ concerns and upholding the original intent of the law. “We recognize the importance of the security measures embedded in the law and aim to maintain them. However, we seek to address how liability accrues so that businesses are not unduly penalized for technical violations,” he explained.
BIPA uniquely empowers Illinois residents to sue businesses for improper collection and mishandling of biometric data, whether they are employees or customers. Violations include failure to obtain written consent for data collection, lack of a storage policy, or inadequate data protection.
Enacted in 2008, BIPA was groundbreaking at the time, aiming to safeguard against technologies then considered futuristic. However, as biometric technology became more widespread, BIPA triggered numerous lawsuits statewide. Since around 2018, over 2,000 suits have been filed under BIPA, resulting in notable settlements, such as Facebook’s $650 million class-action payout in 2020, benefiting over one million Illinois residents.
Business groups have long sought amendments to the law, arguing that they convert biometric data into numerical strings, making it virtually impossible to link back to specific individuals. Their concerns heightened last winter after the state’s high court issued rulings strengthening the law. These included establishing a five-year statute of limitations and ruling that each improper collection of biometric data constitutes a separate violation, potentially leading to astronomical penalties.
Senator Cunningham’s Senate Bill 2979 aims to revise how violations accrue under BIPA, treating each initial collection of biometric data as a single violation, rather than each individual scan. This change could significantly reduce potential penalties for companies.
However, uncertainties remain regarding how damages accrue under BIPA, as most cases are settled before trial, often at significant costs. The court suggested that the General Assembly clarify the law’s intent regarding damages. Cunningham’s proposal seeks to address this suggestion. Although a previous version included an increase in damages for negligent violations, feedback from business groups led him to remove that provision.
“We appreciate Sen. Cunningham’s leadership and anticipate collaborating with him on this crucial issue,” stated a coalition of business groups.
State Representative Ann Williams, D-Chicago, a supporter of BIPA, also backs Cunningham’s proposal. While she previously hesitated to amend the law, she now plans to sponsor the measure in the House, emphasizing the importance of maintaining the law’s core principles while making compliance easier for employers. “My priority is to uphold the fundamental principles of the law while revisiting the damage structure to facilitate business compliance,” Williams concluded.
Tipped / Sub-Minimum Wage … Chicago to Springfield
Fresh from a successful outcome at Chicago’s City Hall, advocates aiming to abolish the sub-minimum wage for tipped workers are now focusing their efforts on Springfield. Last October, Chicago’s City Council endorsed an ordinance to gradually eliminate the lower wage for tipped workers, primarily impacting those in the restaurant industry, over a span of five years. This legislation was championed by Mayor Brandon Johnson and supported by the national One Fair Wage advocacy group, collaborating with progressive members of the City Council to ensure its passage.
A forthcoming bill, to be introduced in the General Assembly by state Representative Elisabeth Hernandez, D-Cicero, and backed by the One Fair Wage group, aims to go a step further by eliminating the tipped wage statewide by January 1, 2025. This move would effectively compel restaurants across Illinois to pay their workers a higher minimum hourly rate compared to those in Chicago by next year.
The bill’s prospects in Springfield as currently drafted remain uncertain. However, even if amendments are made to extend the phaseout period, the legislation would promote greater uniformity between Chicago restaurants and those elsewhere in the state, potentially easing concerns among moderates in the City Council about restaurants relocating to the suburbs.
The bill’s sponsorship by Hernandez, who also chairs the Democratic Party of Illinois, adds weight to its priority status among state legislators. Hernandez secured this position with the support of Governor J.B. Pritzker following a prolonged intraparty dispute.
“Tipped workers in suburban areas and throughout Illinois should not receive a sub-minimum wage for performing the same tasks as their counterparts in Chicago,” Hernandez stated in a written communication to Crain’s. “This legislation aims to level the playing field for workers statewide while ensuring that businesses can continue to attract employees in today’s tight labor market.”
Hernandez is receiving unexpected support from Cicero Mayor Larry Dominick, whose town borders Chicago on three sides. Cicero stands to benefit if restaurants in Chicago relocate across the street to Cicero, where labor costs would be lower. In her statement, Hernandez expressed gratitude to “the town of Cicero for spearheading this effort.”
Dominick is primarily concerned that restaurants in Cicero might struggle to find local workers, who might opt for better-paying jobs in the city. “Tipped employees deserve equitable compensation regardless of their workplace,” Dominick remarked in a written statement.
“With Chicago moving to phase out its sub-minimum wage, it is crucial for suburbs like Cicero to act swiftly to ensure that our workers remain competitive and our businesses can thrive. By increasing the earnings of restaurant workers in Cicero, we can stimulate our local economy, attract new residents, and support our diverse restaurant scene,” Dominick’s statement continued.
Previous state bills, HB 5139 and SB 2093, proposed longer phaseout periods but failed to advance. The House bill sought to eliminate the tipped wage by 2025, introduced in January 2023, allowing for a two-year phaseout. The Senate bill, introduced in 2023 by then-state Senator Cristina Pacione-Zayas, now serving as deputy chief of staff in the Johnson administration, aimed to abolish the tipped wage by 2026.
The new bill is likely to encounter similar challenges, even with potential amendments. Presently, the state maintains an $8.40 tipped wage, set to rise to $9 next year when the overall minimum wage reaches $15.
Similar to Chicago, if a worker’s combined hourly rate from the tipped wage and tips fails to meet the state’s minimum wage, employers are required to bridge the gap. Additionally, like in Chicago, eliminating the tipped wage would not prohibit tipping; tips would be received in addition to the worker’s fixed wage.
The initial Chicago proposal did not propose to close this gap within a year. Originally, a two-year phaseout was suggested, later extended to five years following negotiations with Sam Toia, head of the Illinois Restaurant Association, and to garner support from moderate City Council members.
Despite this compromise, restaurant owners have voiced concerns about the city’s measure, arguing that they already operate on slim profit margins, and shifting the responsibility of paying workers a minimum wage from patrons’ tips to employers could jeopardize their businesses.
Fighting Poverty Remains on Mind of Lawmakers in Illinois
Illinois ranks among the top 10 states in the nation with the highest number of residents living below the poverty line, prompting bipartisan calls for action. According to data from the World Population Review, Illinois surpasses most other states in terms of residents facing poverty. While the national poverty rate stands at 11.5%, indicating those earning less than $14,580 annually, Illinois harbors nearly 1.5 million individuals, constituting 12.1% of the state’s population, living below this threshold. Notably, Illinois joins two other Midwestern states in this top ten ranking.
State Representative La Shawn Ford, D-Chicago, attributed the rise in poverty to various factors, citing a lack of support as a significant contributor. “It starts with ensuring that individuals have access to employment,” Ford stated in an interview with The Center Square. “Initially, we must foster a robust business environment capable of hiring individuals. We need to cultivate a business-friendly atmosphere and provide ample opportunities for employment.”
State Representative Marty McLaughlin, R-Barrington Hills, pointed to poor government policies as a root cause. “Inadequate policies are leading to ‘opportunity deserts’ in Illinois, particularly for those experiencing poverty,” McLaughlin remarked. “Government incentives that discourage younger workers from entering the workforce hinder their development and progression up the economic ladder. Receiving a paycheck and acquiring skills that can be further honed as individuals advance in their careers or trades are essential steps towards upward economic mobility.”
Illinois occupies the seventh spot nationwide in terms of the highest number of residents living below the poverty line, with California ranking first. Among Midwestern states, only Ohio and Michigan join Illinois in this top ten ranking.
Expansion of the Smart Start Preschool Program is Ahead of Schedule
An early childhood education initiative spearheaded by Governor JB Pritzker is exceeding expectations in its efforts to enhance preschool accessibility across Illinois. The Smart Start program, approved last May as part of the state’s operating budget, allocated $250 million to expand early childhood education initiatives. This included funding for wage support for childcare workers, early intervention programs, and home visiting programs. Additionally, the program aimed to create 5,000 new pre-kindergarten slots in underserved areas, a goal that has already been surpassed by over 800 seats.
Speaking at a news conference held at Rochester Elementary School near Springfield, Governor JB Pritzker expressed his satisfaction with the program’s progress. This visit marked his second stop in as many days to celebrate the program’s success. The initiative spans four years and aims to establish a total of 20,000 new preschool spots.
Rochester School District is one beneficiary of the Smart Start grant. In 2017, the district had only one preschool classroom, offering morning and afternoon sessions. Today, they boast six preschool classrooms, providing half-day and full-day programs, catering to 180 students aged three to five.
Jennifer Shaw, the district’s director of special education, emphasized the positive impact of the Smart Start grant on Rochester’s educational offerings. The grant enables the district to extend preschool services to at-risk students, those with special education needs, and tuition-based students alike.
Smart Start’s expansion efforts also include introducing 17 new prevention and evidence-based home services, with an additional $130 million earmarked for staff retention and growth in childcare facilities. Furthermore, an extra $40 million has been allocated to enhance early intervention services, facilitating thousands of children in overcoming developmental challenges while providing families continued access to critical services and giving providers a much-needed 10 percent rate increase.
State Superintendent of Education Tony Sanders underscored the significance of early childhood education, highlighting preschool as the foundation upon which children and families establish their initial connections with schools. Sanders emphasized that the skills and knowledge acquired during these formative years are crucial for laying a robust educational groundwork that sets children up for success throughout their academic journey. He emphasized that every child deserves access to this essential foundation.
Recurring Business:
Will County Alternative Fuels Readiness Plan – New Interactive Map Survey
The Will County Executive Office would like to invite you to take part in the next phase of their initiative – the Interactive Map Survey. This feedback will play a crucial role in identifying suitable locations for new fueling stations for Alternative Fuel Vehicles, including Electric Vehicles.
Please help their team by promoting this mapping survey within our community. This additional input will help them plan for the future of alternative fuel infrastructure in Will County, pinpoint desired fueling locations, and contribute to a more sustainable environment for residents, visitors, and businesses.
For additional information on the project, please feel free to visit willcountyaltfuels.com.
Building Blocks of Success: IDOT announces February dates for Disadvantaged Business Enterprise program workshops
The Illinois Department of Transportation is hosting free virtual workshops in February 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.
February workshop dates and topics:
- Feb. 1, 10 a.m. to noon: Website Best Practices: Whether DIY or Hiring Firm
- Feb. 6, 10 a.m. to noon: Marketing & Networking Q&A
- Feb. 8, 10 a.m. to noon: Building a Capability Statement
- Feb. 13, 10 a.m. to noon: How to Connect & Stand Out
- Feb. 15, 10 a.m. to noon: Benefits of Becoming IDOT DBE Certified, How to Apply & Expand Work Categories
- Feb. 27, 10 a.m. to noon: Accounting Practices / Financial Reporting Financial Series
- Feb. 29, 10 a.m. to noon: Budgeting & Cashflow Management
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 Bureau of Small Business Enterprises at (217) 785-4611.
Through Gov. JB Pritzker’s historic, bipartisan Rebuild Illinois, IDOT is helping to deliver the largest capital program in state history while promoting diversity, equity and inclusion.
Administered by IDOT, the DBE program provides minorities, women and eligible small businesses with opportunities to participate in federally and state funded highway, transit and airport contracts. For more information on becoming a certified DBE and learning more about available IDOT resources, visit www.idot.illinois.gov/dbe.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct