Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
A short report for this week, but still important information to share. See below for information on where the state of Illinois finished financially for fiscal year 2024, a new law that has been implemented, and a vote a long-awaited city project.
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State ends fiscal year with nearly $5B cash on hand
Illinois entered a new fiscal year Monday with a bit of a financial cushion as the prior year’s revenues exceeded final projections by about $123 million. The state ended fiscal year 2024 with about $4.7 billion cash on hand, or about 9 percent of the allocated spending for fiscal year 2025, which began July 1. That included a record high $2.1 billion in the state’s budget stabilization, or “rainy day” fund, which has seen its balance grow steadily over the past five years.
Comptroller Susana Mendoza noted the high cash balance helped Illinois generate over $558 million in interest income in FY24, a 53 percent increase from the previous year. She said in a news release she plans to exercise new authority granted to her office in the budgeting process this year to pre-pay required monthly pension payments while funds are available. “This will enable the (pension) systems to plan accordingly and keep more of the pension funds in their investment portfolios,” Mendoza said in a statement.
Governor Pritzker’s office said the year-end balance represents “part of a pattern of fiscally responsible policies.” He mentioned the nine credit upgrades Illinois has received from the nation’s three major credit rating agencies since he took office.
“Nine credit rating upgrades, bill backlogs eliminated, six balanced budgets, and now the state’s highest ever General Funds balance — this is the result of disciplined, responsible fiscal management that prioritizes serving taxpayers and helping working families,” Pritzker said in a statement.
The $52.6 billion in revenue collected in FY24 was about 4 percent more than the $50.6 billion anticipated when lawmakers approved the budget last May. But lawmakers largely allocated those unforeseen revenues in a supplemental spending plan approved this May, so the cash on hand represents more of a cushion for the upcoming fiscal year than a license to approve more spending. The cash on hand is also not the same as a surplus, as it includes dollars that may have been appropriated but not yet spent.
The year-end revenues were published Tuesday by the legislature’s fiscal forecasting agency, the Commission on Government Forecasting and Accountability. Eric Noggle, COGFA’s revenue manager, noted revenues matched the agency’s March forecast almost exactly – a rarity in a fiscal landscape that has been difficult to project since COVID-19 first upended state finances.
Both Pritzker and Mendoza celebrated the fact that Illinois no longer has a backlog of unpaid bills. In the wake of a two-year state budget impasse between Republican Gov. Bruce Rauner and Democrats in the General Assembly in 2016 and 2017, the backlog had risen to about $16 billion. Now, all bills are paid within 30 days of reaching the comptroller’s desk, Mendoza said.
“I’m committed to giving our state providers and vendors the stability and predictability that they should expect from state government,” Mendoza said in a statement. “Having received countless hardship calls from these providers and vendors during the state’s budget impasse, I believe it is the responsible approach we must continue to take.”
Still, COGFA’s June report noted that while state finances have improved in recent years, Illinois’ economy continues to lag the U.S. as a whole. Read the report here.
“Illinois’ poor economic performance has many contributing factors. The State has earned a reputation for poor fiscal health over decades,” COGFA chief economist Benjamin Varner wrote in the monthly briefing. He mentioned the budget impasse, Illinois’ “relatively high business taxes,” and stagnant or declining population growth as contributing factors.
“Despite these challenges, the situation has been improving in recent years,” Varner added. “The State’s budget has been more balanced over the past five years, thanks to federal government aid, a strengthening economy, and improved budgetary discipline. This has led to a much more stable financial situation.”
That’s partially due to the state eliminating the bill backlog, building its fund reserves and allocating money to tax incentive programs that have lured businesses to move or expand here, he wrote. “Although the Census Bureau still estimates that Illinois is losing population, the rate of annual declines has slowed,” Varner wrote.
Governor Pritzker has also frequently noted that the state has lowered the corporate franchise tax paid by businesses in Illinois, exempting the first $10,000 in liability under the tax beginning in 2025. In 2019, the governor signed a plan to fully phase out that tax, but he ultimately reversed that decision amid the COVID-19 pandemic. He and lawmakers have since increased the exemption from $30 in 2020 to $10,000 in 2025 – a doubling from the previous year.
As for the fiscal year 2024 revenues, Illinois’ main funding source remains the personal income tax. Noggle noted the state collected $30.1 billion in personal income tax revenue in FY24 along with $6.5 billion in corporate income tax revenue, which collectively performed better than the previous year.
For the new fiscal year that began Monday, lawmakers approved $53.1 billion in spending, or roughly 1 percent more than FY24’s final revenues. But Noggle also noted the last fiscal year included about $881 million in one-time revenues from sources that won’t repeat in FY25 – so base revenues will have to grow by over 2 percent to meet spending demand.
Freelance Worker Protection Act Takes Effect
The Freelance Worker Protection Act, which provides protections for independent contractors who create products or services in Illinois or who work for a hiring entity located in Illinois, took effect on July 1st.
Under the law, freelance workers are entitled to the following when the value of their work is equal to or greater than $500 in a 120-day period:
- A written contract outlining the products and services to be provided, the dates by which services are to be performed, and the rate and method of compensation (sample available online)
- Full payment for the services by the due date in the contract, or if the due date is not specified, within 30 days of completing the services outlined in the contract
- Protection from retaliation and/or other negative action for exercising rights under the FWPA
“The Freelance Worker Protection Act establishes a framework of understandable and transparent expectations for independent workers in Illinois, to better protect their work, and compensation,” said Illinois Department of Labor Director Jane Flanagan.
The law only applies to freelance contracts taking effect after July 1, 2024. It does not apply to individuals performing construction services, nor does it apply to employees of an employer. Employees owed back wages from their employer may file a wage claim with the Department of Labor here.
“Freelance workers, like all workers, deserve to have basic protections like timely pay and the right to a written contract,” said State Rep. Will Guzzardi (D-Chicago). “Many freelancers say they live check to check; these protections ensure there are clear expectations for the workers and hiring entities.”
Frequently asked questions and a sample freelance worker contract (which is available in multiple commonly-spoken languages) can be found at the Department’s website: labor.illinois.gov/freelance.
Long-Awaited City Square Approved by Joliet City Council
An area adjacent to the historic Joliet Rialto Square Theater will be getting a total makeover thanks to the approval of the City Council at last Tuesday’s council meeting. The project known as City Square, has been in the works since the city completed the Downtown Joliet Plan in 2015 that identified the need to create a larger urban gathering space at this location.
City Square will be located across from the Rialto Square Theater, at the corner of Clinton and Chicago Streets, and will be uniquely positioned to take advantage of regional destinations and to build upon the historical significance of the area including the 100-year anniversary of the Rialto Theater and the commissioning of Route 66 in 2026.
Revitalizing downtown Joliet is one of Mayor Terry D’Arcy’s top priorities. “The area surrounding the historic Rialto Square Theater is in the heart of Joliet and deserves to be a place for families to gather and enjoy the beautiful amenities and dining options downtown has to offer,” stated D’Arcy. “The City Square plan will support and promote our downtown businesses and institutions while establishing a safe location for year-round events for residents, visitors, employees and students in the region to enjoy.”
According to Lisa Dorothy, Project Manager and Civil Engineer leading the construction and engineering for the project, the development of City Square is complementary to the Chicago Street Reconstruction project, and the streetscape plan for this project is being developed simultaneously. “The Chicago Street Reconstruction project implements a redesign of Chicago Street from Jefferson Street to Cass Street to reestablish the identity of this corridor as a street that is safe for all types of transportation. Both projects advance the high-level conceptual designs from the Chicago Street Corridor Plan adopted in 2018,” explained Dorothy.
Assisting Dorothy in the project is City Planner and Project Manager Jayne Bernhard who oversaw the public input process on the design and amenities for City Square as well as helped secure grant funding for the project.
Bernhard and colleagues secured $3 million from the Rebuild Downtowns & Main Streets Capital Grant through the Department of Commerce and Economic Opportunity (DCEO) to fund a portion of the total cost of the renovations estimated at about $21 million.
In addition, $2,501,760 of the City’s REBUILD Illinois allocation from the Illinois Department of Transportation (IDOT) will also be utilized for the Chicago Street reconstruction project, which will be constructed adjacent to and concurrently with the City Square project.
Input and participation from the community in the design process has been extensive and dates back to September of 2022 including a series of open houses, a community survey, public comment periods, city council presentations and meetings with various stakeholder groups.
Dave DiLorenzo, Director of Community & Employee Relations at University of St. Francis provided feedback on the proposed project thanking the city for its efforts to provide a transparent process. “We are excited for the opportunities that this space will create for our students and faculty, as well as the impact it will have on enhancing the image of downtown Joliet.”
“The City Center Partnership is eager to see this project coming to fruition,” commented Priscilla Cordero, Executive Director for the Joliet City Center Partnership. “The City Square and Chicago Street reconstruction will be a catalyst for economic development allowing Joliet to attract new development, businesses, and residents for the improvement of downtown as a whole.”
Monica Cicimov, Owner of C&C Vision Gallery believes the City Square and Chicago Street reconstruction is vital to the continued growth and improvement of downtown. “This project will benefit current and future generations of residents and businesses. We are excited to see that the City of Joliet and its council members are fully committed to the revitalization of downtown.”
Construction will begin later this year and is expected to run through the end of 2025. For more information about the project, please visit the city’s website at https://www.joliet.gov/government/departments/public-works/joliet-city-square-design.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct