“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
In Congress’ last action before Election Day, the Senate cleared a stopgap funding bill that heads off a government shutdown. President Biden signed the three-month government funding bill averting an imminent shutdown and delaying a fuller conversation about government spending until after the November elections.
The stopgap spending bill, known as a continuing resolution or CR, will extend government funding until December 20th. It also punts a potentially bitter funding fight to just before Christmas, with the results hinging on the November elections and which party wins control of the House, Senate and White House.
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Update on Credit Card Transaction Fees
Retailers and financial institutions in Illinois are locked in a dispute over a new law targeting credit card transaction fees. The Interchange Fee Prohibition Act, set to take effect in July 2025, aims to prohibit banks and credit card companies from charging fees on the state and local sales tax and tip portion of transactions when consumers use credit or debit cards. While businesses support the measure, banks argue that it will create confusion and legal issues.
Rob Karr, President and CEO of the Illinois Retail Merchants Association, highlighted that the new law has strong public backing. He noted that the legislation would relieve businesses of having to pay transaction fees on taxes and tips, which are ultimately passed on to consumers. Karr criticized the current system as unfair, pointing out that these fees disproportionately affect younger and lower-income consumers.
Speaking at a press conference in Springfield, Karr dismissed claims from financial institutions that the law could lead to operational chaos, such as the need for consumers to swipe their cards twice. He cited existing practices where tips are handled smoothly without complications.
Despite support from the business community, banks have expressed strong opposition. In a joint statement, Ben Jackson of the Illinois Bankers Association and Ashley Sharp of the Illinois Credit Union League called the law a “smokescreen.” They argued that the law does not benefit consumers or workers and could discourage tipping. Additionally, they noted that the law does not generate revenue for the state and would complicate payment processing for everyone involved, especially smaller businesses.
The financial institutions are taking legal action to block the law’s implementation, claiming it violates federal statutes. A coalition of banking and credit union organizations, including the American Bankers Association and America’s Credit Unions, filed a lawsuit in U.S. District Court, seeking an injunction against the law.
While banks continue their legal challenge, Karr remains optimistic about the outcome. He believes the law is on solid legal ground and anticipates that it will withstand scrutiny.
As the legal battle unfolds, the Interchange Fee Prohibition Act is poised to reshape how credit card fees are applied in Illinois, with both sides continuing to debate its impact on businesses and consumers.
Illinois Ballot Features Question on Whether Millionaires Should Fund Property Tax Relief with Higher Tax
A proposed 3% tax on individual income exceeding $1 million could generate at least $4.5 billion in new revenue annually for Illinois, according to a new estimate from the state’s Revenue Department. This comes ahead of a November advisory referendum asking voters if the funds from this tax should be earmarked for property tax relief.
The estimate, obtained through a state open-records request by WBEZ, marks the first official projection of the impact of the proposed tax aimed at addressing one of the state’s pressing financial issues: high property taxes. Voters will be asked to weigh in on whether the Illinois Constitution should be amended to implement this tax, which would specifically target the wealthiest citizens. While the referendum is non-binding, a favorable result could lead lawmakers to pursue a formal constitutional amendment as early as 2026.
The ballot question asks: “Should the Illinois Constitution be amended to create an additional 3% tax on income greater than $1,000,000 for the purpose of dedicating funds raised to property tax relief?”
State Representative Jay Hoffman, a Democrat from Collinsville and the chief sponsor of the legislation behind the referendum, emphasized the need for property tax relief in Illinois. “There’s a huge hue and cry for the reduction of property taxes in Illinois. It’s the most regressive type of tax,” Hoffman said. He hopes the public will support the proposal to ease the burden on middle-class families.
The issue is particularly relevant given a recent surge in property taxes in Cook County, where some homeowners in the southern and southwestern suburbs of Chicago saw increases of up to 30%. A report from Cook County Treasurer Maria Pappas revealed a 19.9% median increase in property tax bills for the area.
The new tax would impact Illinois’ wealthiest residents. For the 2021 tax year, state records show 77,323 Illinoisans reported incomes exceeding $1 million. The referendum seeks input on whether this group should shoulder an additional financial burden to fund property tax relief.
This is not the first time Illinois voters have been asked to weigh in on taxing the wealthy. In 2020, Governor JB Pritzker’s attempt to pass a graduated income tax — where higher earners pay more — failed with less than 47% support. Six years earlier, in 2014, voters supported a similar advisory referendum to tax millionaires and allocate the revenue for schools, with 64% in favor.
If the 2024 referendum passes, it could set the stage for further discussions about amending the state constitution, which currently mandates a flat income tax. Hoffman acknowledged that a constitutional amendment might be necessary but is prepared to pursue it. “If it were to pass overwhelmingly, then we need to sit down with Illinois constitutional experts to figure out what the next step would be,” he said.
However, the proposal is facing opposition from Republicans. House Minority Leader Tony McCombie has expressed her intent to vote against the measure, arguing that Illinois residents are already heavily taxed. “Increasing taxes will not lead the state to more economic opportunity,” said McCombie’s spokesperson, Colleen King.
While Governor Pritzker signed the legislation authorizing the referendum, his personal stance on the issue remains unclear. His campaign has reiterated his belief in a fairer tax code for middle-class families, but a direct answer on how he plans to vote was not provided.
Former Governor Pat Quinn, a strong advocate for property tax relief, has voiced his support for the measure. “Illinois has the second highest property taxes in the country. It’s hammering a lot of folks who live from paycheck to paycheck,” Quinn said, adding that the referendum represents an important step toward reform.
If passed, the new tax could provide significant relief to over 3 million households across Illinois, reshaping the state’s approach to property tax funding and addressing long-standing financial challenges.
IDOL Reminds Employers of Forthcoming Salary Transparency Law
The Illinois Department of Labor (IDOL) is reminding employers and those looking for a job that, starting January 1, 2025, employers with 15 or more employees must include pay scale and benefit information in job postings.
This requirement is the result of an amendment to the Equal Pay Act of 2003 that was contained in HB 3129, passed by the General Assembly and signed into law by Governor JB Pritzker in 2023.
“Governor Pritzker and the General Assembly continue to take bold action toward eliminating gender and racial wage gaps,” said IDOL Director Jane Flanagan. “This legislation will increase wage transparency in the job search process and workplace.”
Any aggrieved person may file a complaint with IDOL, when they become aware of a job posting that lacks the required salary and benefit information. Complaints must be filed with IDOL within one year of the relevant violation and complainants are encouraged to submit a link, picture, or screenshot of the posting in question.
“Pay transparency is the key to ending wage discrimination and ensuring every employee gets fair pay for a fair day’s work,” said State Rep. Mary Beth Canty (D-Arlington Heights). “A more transparent workplace that empowers employees is better for everyone.”
If IDOL finds the posting does not include the required salary and benefits, IDOL will notify the employer of the complaint and provide a date by which the violation must be addressed.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
[email protected]
815.727.5371 main
815.727.5373 direct