Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Thanks to all that joined us today for Joliet Mayor Terry D’Arcy’s State of the City address. Mayor D’Arcy did a wonderful job of highlighting the many positives within our city over the past year and covered some additional projects that will change the landscape here in Joliet.
For those that were not able to join, we anticipate sharing the video recording within the next week. Information will be coming out soon extending an invitation to our annual State Legislative Session wrap up event in June on the 25th. We’re looking forward to hearing about what did and did not occur in Springfield.
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Weekly State Budget Update
Federal funding cuts and looming tariffs pushed by the Trump administration and Republicans in Congress continue to affect state budget negotiations — both in Springfield and in statehouses across the country. In addition to the usual challenge of keeping spending in line with expected revenues, states are now bracing for potential federal cuts to Medicaid and other vital programs.
“The governor and his budget team are continuing to meet this week with budgeteers and legislative leaders, even as our state grapples with the reality of the Trump economy slowing growth and a trade war raising prices,” said Matt Hill, spokesperson for Governor JB Pritzker. “Governor Pritzker will continue prioritizing fiscal responsibility. His proposed budget focuses on the long-term fiscal health of the state, while preserving core investments and avoiding tax increases on working families.”
Hill added a reminder to lawmakers: “The governor will only sign a balanced budget that reflects these shared priorities.”
Lawmakers have until Saturday night to finalize the budget. Governor Pritzker has proposed a $55.2 billion spending plan, but projected revenues for the 2026 fiscal year — which begins July 1 — are estimated at $53.4 billion, leaving a nearly $2 billion shortfall.
Illinois’ budget gap is relatively modest compared to some other states, yet right in line with others. California is facing a $12 billion deficit (3.72% of its total budget), Iowa has a $900 million gap (9.73%), and Indiana faces a $2 billion shortfall (4.55%).
Session Update
Lawmakers were busy in Springfield last week and this week so far. More than 350 bills have passed either chamber in recent days. May 23rd marked the Third Reading deadline for bills in the opposite chamber — a crucial checkpoint in the legislative process. The final scheduled day of session for this spring is May 31.
Why May 31? Under the state constitution, any bills passed after this date that are intended to take effect immediately require a three-fifths majority, rather than a simple majority. With the new budget year beginning July 1, supermajority Democrats have a little flexibility, but extending the session into June is not out of the ordinary. In fact, for the past two years, lawmakers have gone past their mid-May adjournment goals. With federal funding uncertainty lingering after recent U.S. House action, this year could follow suit.
What’s left? We continue to keep an eye on the following topics:
- Mass transit reform and funding
- Business development package
- Procurement and energy omnibus bills
- Environmental justice legislation
- Data residency requirements
- Defense against new workplace mandates
- Pharmacy Benefit Manager (PBM) reforms
Pension Reform Proposal
On Tuesday, labor organizations formally submitted a proposal for pension reform to Governor JB Pritzker. In a letter, AFL-CIO Secretary-Treasurer Pat Devaney outlined a plan that includes:
- Lowering the retirement age
- Increasing annual cost-of-living adjustments (COLAs)
- Putting the state on track to fully fund its pension liabilities by 2049
- Making changes to ensure compliance with federal Social Security regulations
Notably, Devaney emphasized the plan would not require significant additional state funding.
Letter to Governor from Education, Labor, Business & Economic Development Organizations Regarding Energy Proposal
Dear Governor Pritzker and Legislative Leaders,
Over the last six years, Illinois has made remarkable progress to make sure that “Illinois is open for business” by balancing state budgets, investing in our workforce and educational institutions, and building a strong toolbox of economic incentives.
As a result, Illinois is now one of only five states with a trillion-dollar economy and ranked #2 in the nation for corporate expansion and relocation projects. As leaders in labor, business, local government, economic development and higher education, we are writing to express our deep concerns about a recently unveiled omnibus energy proposal that could seriously imperil Illinois’ ability to attract new investment and economic growth from manufacturers, quantum, data centers, and other projects that create good labor jobs and generate tax dollars for our communities. The current proposal will raise prices for electricity on Illinois families and businesses while creating long delays for economic development projects.
Most concerning is the “tariff” idea that introduces discriminatory mandates and new rate structures on large electricity customers using 25MW or more. Illinois would be the first state in the nation with this new mandate that would increase the cost of electricity and impose long delays as companies are forced to build or subsidize new generation at a rate 6x the current cost of renewable energy credits (RECs). Similar proposals have already been rejected in other states, and Illinois should do the same.
Your Administration has committed significant time and tens of millions of dollars for the regional site readiness program that prepared sites for industrial development. This program was designed to make sure that sites are equipped with necessary infrastructure including access to energy. However, the new tariff and “bring your own power” means that any large new business will not be able to tap into readily available power, therefore defeating the purpose of having vetted sites available for immediate development.
These proposals risk fundamentally undermining Illinois’ position as a national leader in innovation, clean energy, and economic development. The new tariffs and fees effectively penalize companies that have driven private investment, created thousands of union jobs, and contributed billions in tax revenue to support local services, including education, public safety, and infrastructure. No other state imposes energy costs of this magnitude on new large load customers. If enacted, these policies would push economic development to neighboring states such as Indiana, Iowa, Michigan, and Ohio – places already competing aggressively for these investments.
Illinois should be building on its strengths: a diverse energy mix including a robust nuclear fleet and abundant natural gas, excellent infrastructure, growing renewable infrastructure, central location, access to water, and a skilled workforce. Instead, the current proposal would discourage investment by adding complexity, cost, and uncertainty for companies seeking to locate or expand operations in the state.
We strongly urge your Administration and the General Assembly to commit to a comprehensive, data-driven evaluation of how energy costs are allocated in Illinois and how Illinois can invest in generation, transmission lines, and new technologies like battery storage. Energy policy decisions of this magnitude should not be rushed through in the final days of a legislative session. A more thoughtful approach – one that invites input from all interested stakeholders – will help ensure Illinois continues to grow jobs, attract investment, and lead in the transition to a reliable and sustainable energy future.
We stand ready to work with you to ensure that Illinois remains a place where industry and workers can thrive, innovation can flourish, and clean energy goals can be met without sacrificing economic opportunity.
Thank you for your consideration of this critical issue.
U.S. Grid Operator Warns of Potential Summer Power Shortages Amid Rising Demand and Extreme Heat
As the summer of 2025 approaches, the PJM Interconnection—America’s largest power grid operator—is warning of possible electricity shortages that could lead to emergency measures or even outages if extreme heat coincides with rising demand. In a report released on May 9, PJM expressed cautious optimism that under typical weather conditions, the grid should have sufficient power to meet consumer needs. However, should record-breaking heat waves occur, as current forecasts suggest, the situation could quickly become strained.
PJM anticipates peak electricity demand to exceed 154,000 megawatts (MW) this summer, potentially reaching over 166,000 MW in extreme conditions. This would edge close to the historical peak of 165,563 MW set in 2006. Although the grid is projected to have around 179,200 MW of generation capacity available—including approximately 7,900 MW from demand response programs—there is concern that reserve margins could fall short during sustained heat waves or other high-stress periods. PJM Executive Vice President Aftab Khan noted that these warnings reflect “years-long and mounting concerns” about the grid’s ability to maintain reliability amid ongoing transformations in how energy is produced and consumed.
The primary challenge PJM and other grid operators face is a growing imbalance between electricity supply and demand. On the demand side, usage is surging due to several converging trends: the rapid expansion of AI and cloud-based data centers, increased electric vehicle adoption, and a wave of industrial onshoring efforts that are boosting domestic manufacturing. On the supply side, the retirement of fossil fuel plants—many of which provide crucial baseload power—is happening faster than they can be replaced by renewable sources. Although renewables like wind and solar are expanding, they remain intermittent and often lack the storage or backup systems necessary to ensure reliability during periods of peak use or low generation.
This mismatch is particularly concerning given that the U.S. is expected to experience a hotter-than-average summer, especially along the East Coast and Midwest, where PJM operates. Higher temperatures drive up the need for air conditioning, adding pressure to an already stretched grid. Past experiences have shown how vulnerable the grid can be in such scenarios. In Texas, the 2021 Winter Storm Uri caused massive power failures due to cold weather overwhelming the system. Similarly, California has periodically faced rolling blackouts during heatwaves in recent years, underscoring the fragility of energy infrastructure in extreme conditions.
The threat extends beyond PJM’s territory. A recent long-term reliability assessment by the North American Electric Reliability Corporation (NERC) found that more than half of North America is at risk of power shortages during peak periods this summer. The organization cites many of the same concerns PJM raised: soaring demand, aging or retiring infrastructure, and delays in bringing new renewable capacity online.
The federal government has responded with policy actions aimed at shoring up the grid. In April, the Trump administration issued an executive order titled “Strengthening the Reliability and Security of the United States Electric Grid.” The directive declared a national energy emergency and called for the Department of Energy to prioritize all available generation sources, particularly those with secure, redundant fuel supplies like natural gas and nuclear. While the order seeks to boost grid reliability in the short term, its immediate impact is limited, given the time needed to implement such measures.
Meanwhile, PJM has already begun taking steps to address some of the system’s vulnerabilities. These include reforms to its interconnection process to speed up the approval of new energy projects, the advancement of 51 generation initiatives through its Reliability Resource Initiative, and an expansion of its demand response program recently approved by federal regulators. This latter measure will allow greater flexibility in curbing demand during high-stress periods by enabling more participants to scale back electricity use beyond the traditional few hours of peak alert.
Despite these efforts, experts warn that the grid’s reliability remains highly sensitive to unpredictable factors like weather and equipment failure. Historically, most U.S. power outages stem not from generation shortfalls but from distribution system failures, which are also vulnerable to extreme weather. Still, in a worst-case scenario—where demand spikes, renewable output dips, and dispatchable resources fall short—the risk of broader outages cannot be dismissed.
The situation has also caught the attention of energy policy observers and commentators. Social media activity reflects growing public concern over the reliability of the grid and the consequences of an energy transition that may be moving faster than infrastructure and policy can accommodate.
In summary, while PJM expects the grid to function adequately under standard summer conditions, the outlook becomes considerably more uncertain if the season brings extreme heat or unexpected surges in demand. With demand from electric vehicles, data centers, and industrial users on the rise—and fossil fuel retirements outpacing the deployment of dependable new generation—the U.S. grid is facing its most complex summer in recent memory. Whether proactive planning and emergency measures will be enough remains to be seen.
SBA Relief Still Available to Illinois Small Businesses and Private Nonprofits Affected by July Storms
The U.S. Small Business Administration (SBA) is reminding small businesses and private nonprofit (PNP) organizations in Illinois of the June 20 deadline to apply for low interest federal disaster loans to offset economic losses due to severe storms, tornadoes, straight-line winds and flooding occurring July 13-16, 2024.
The disaster declaration covers the Illinois counties of Boone, Bureau, Clinton, Cook, Dekalb, DuPage, Fulton, Grundy, Henry, Jefferson, Kane, Kankakee, Kendell, Knox, Lake, Madison, Marion, Mason, McDonough, McHenry, Mercer, Monroe, Ogle, Peoria, Perry, Randolph, Rock Island, Schuyler, Stark, St. Clair, Stephenson, Tazewell, Warren, Washinton, Whiteside, Will and Winnebago in Illinois, Lake in Indiana, St. Louis in Missouri as well as Green and Rock in Wisconsin.
Under this declaration SBA’s Economic Injury Disaster Loan (EIDL) program is available to small businesses, small agricultural cooperatives, nurseries and PNPs with financial losses directly related to the disaster. The SBA is unable to provide disaster loans to agricultural producers, farmers, or ranchers, except for small aquaculture enterprises.
EIDLs are available for working capital needs caused by the disaster and are available even if the small business or PNP did not suffer any physical damage. The loans may be used to pay fixed debts, payroll, accounts payable, and other bills not paid due to the disaster.
“SBA loans help eligible small businesses and private nonprofits cover operating expenses after a disaster, which is crucial for their recovery,” said Chris Stallings, associate administrator of the Office of Disaster Recovery and Resilience at the SBA. “These loans not only help business owners get back on their feet but also play a key role in sustaining local economies in the aftermath of a disaster.”
The loan amount can be up to $2 million with interest rates as low as 4% for small businesses and 3.25% for PNPs, with terms up to 30 years. Interest does not accrue, and payments are not due until 12 months from the date of the first loan disbursement. The SBA sets loan amounts and terms based on each applicant’s financial condition.
Bills of Note:
SB 1441, Secure Choice Program passed the House 74-37-0. This bill provides that the accounts established under the Secure Choice Savings Program shall be IRAs, into which enrollees contribute funds that are invested in investment options established by the Illinois Secure Choice Savings Board. Provides that a separate account shall be established for each enrollee and the accounts shall be owned by the enrollee. Provides that the savings accounts established under the Program shall be portable and allow for an enrollee to make contributions from multiple employers into a single account. Provides that an enrollee in the Program may have both a Roth IRA and a Traditional IRA through the Program. Provides that an employer who fails without reasonable cause to enroll an employee in the Program within the time provided and fails to remit their contributions shall be subject to a penalty. Provides that, following initial enrollment, employers shall enroll new employees as soon as practicable, but no later than 120 days after the employee is first employed by the employer.
SB 2111, Mass Transit Reform Omnibus (vehicle bill) passed House Executive Committee. Leader Buckner briefly spoke during the hearing and said SB 2111 will be used as the vehicle for the mass transit reform omnibus. Leader Buckner provided no further details but said they are continuing conversations and will return to the committee with the specifics of the bill.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct