Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Today’s roundup has information that didn’t make the cut last week recapping the end of the state legislative session.
A reminder as well about an invite to two upcoming programs that you should find interesting:
First, A Lunch & Learn Opportunity: Joliet Economic Analysis Report on Wednesday, June 17 at Harrah’s. How do planning, development, and infrastructure decisions impact a city’s financial future? Join nationally recognized urban planner Joe Minicozzi of Urban3 as he presents a compelling analysis of Joliet’s fiscal health and explores the connection between land use, economic development, placemaking, and long-term community sustainability.
Second, A Member Breakfast: Illinois Legislative Update – Budget and Beyond with local State Senators Ventura and Loughran Cappel as well as State Representatives Walsh Jr., Manley, and Leader Avelar. This will take place on Wednesday, June 24 at the Holiday Inn & Suites Joliet Southwest.
*Government Affairs Roundup brought to you by CITGO*
Schools to Receive Funding Boost, but Less Than Pushed For
Illinois lawmakers approved a new state budget that increases funding for public schools, though advocates say it still falls short of what is needed to adequately support districts across the state.
The budget includes a $350 million increase in Evidence-Based Funding (EBF), the state’s primary formula for distributing aid, which is designed to direct more resources to the neediest school districts. Lawmakers also restored $47 million for property tax relief grants, a program created under the formula but paused in the current fiscal year.
In total, the budget allocates just over $10.8 billion to the Illinois State Board of Education, about $120 million more than Gov. JB Pritzker proposed but slightly less than the agency requested. The total appears lower than last year by roughly $332 million, though that reflects a shift in early childhood funding to the newly created Department of Early Childhood.
Beyond EBF, the budget increases spending on transportation and other mandated programs and nearly triples funding for free breakfast and lunch programs to $26 million.
Still, education advocates argue that the increase is not enough. As Illinois approaches its 10th year under the EBF model, many districts remain far below adequate funding levels.
“Today’s budget proposal reflects not enough compliance with the state’s own evidence-based formula, not enough revenue for schools and services, and not enough courage from the governor and lawmakers,” said Stacy Davis Gates, president of the Illinois Federation of Teachers and Chicago Teachers Union.
The EBF system, signed into law in 2017 by then-Gov. Bruce Rauner, was intended to reduce wide disparities in school funding across more than 860 districts. Each district is assigned an “adequacy target” based on factors such as enrollment, student needs and local revenue capacity, with state funding intended to close the gap.
While the state is required to add at least $300 million annually under the formula, progress toward adequacy has been gradual. In the first year of implementation, 657 of 851 districts were funded below 90% of adequacy, including 167 below 60%.
Now in its ninth year, all districts have risen above 60% of adequacy. However, 48 districts remain below 70%, and 532 districts, about 63% statewide, are still below 90%. The Illinois State Board of Education estimates it would take an additional $3 billion to bring all districts up to that threshold.
Some lawmakers have pushed for a faster path. State Sen. Graciela Guzmán introduced legislation this year that would require full funding of the formula to bring all districts to at least 90% adequacy. She warned that at the current pace, it could take another decade to reach that goal.
“We’re already seeing the impact of inadequacy in school districts all across our state,” Guzmán said, citing larger class sizes, fewer counselors and reduced support services as ongoing consequences.
The budget also revives the property tax relief grant program, originally designed to ease disparities in local tax burdens. Under the EBF law, about $50 million annually is intended for districts with high property tax rates, provided they use the funds to reduce their levies.
Governor Pritzker paused the program last year, citing uncertainty about its effectiveness, and directed the state to study its impact. The review found tax rates declined in districts that received grants, but also in those that did not, largely due to rising property values. While revenue still increased in grant-receiving districts, it grew more slowly than in others.
Despite mixed results, lawmakers opted to restore the program for the coming fiscal year. Districts receiving grants will now be required to lower their property tax levies for three years, instead of two.
Sen. Michael Halpin, who chairs the Senate’s education budget committee, said the program remains worth continuing, particularly as affordability concerns persist, though he emphasized the need for additional investment in the broader funding formula.
Childcare and Early Childhood Funding Sees Boost in New Illinois Budget
Illinois lawmakers approved a new state budget that increases investment in childcare and early childhood services. The move supporters say will benefit both families and the broader economy.
Key highlights from the FY27 budget include:
• An additional $55 million for the Child Care Assistance Program, expanding access to care for low-income, working families across the state.
• A $15 million increase for Early Intervention services, which provide critical support to infants and toddlers with developmental delays — a system that has faced long-standing service backlogs.
The budget also preserves funding for after-school programs by rejecting $17.4 million in proposed cuts. Advocates say those programs play an important role in supporting working families and maintaining a stable workforce.
Lawmakers also approved several related measures aimed at strengthening early childhood systems statewide:
• House Bill 4606 authorizes development of a coordinated, statewide Universal Newborn Support System. This voluntary program would connect families with newborns to services such as health screenings and referrals. Similar programs are already operating in communities including Chicago, Decatur, Peoria, Stephenson County and Winnebago County.
• House Bill 5099 and House Bill 3595 begin shifting childcare licensing responsibilities from the Department of Children and Family Services to the new Illinois Department of Early Childhood (IDEC). The transition is intended to streamline oversight of birth-to-five services. The legislation also modernizes background check requirements, allowing them to follow workers across employers rather than being tied to a single facility.
• House Bill 5204 restructures the Illinois Early Learning Council to better support the new agency. The updated council will include parents and Head Start representatives as it helps guide improvements to early childhood services.
All of the measures are awaiting final approval from the governor.
Governor Pauses New Data Center Incentives Amid Regulatory Concerns
Governor Pritzker is halting new state incentive agreements for data centers, citing a lack of legislative action to address the industry’s rapid growth and its potential impact on consumers and the environment.
Beginning July 1, Pritzker has directed the Illinois Department of Commerce and Economic Opportunity to pause processing applications for the state’s Data Center Investment Program.
“Illinois has an opportunity to continue leading in technological innovation and economic growth, but we also have a responsibility to protect working families and local communities as the data center industry rapidly expands,” Pritzker said in a June 5 news release.
The move follows the General Assembly’s failure to pass legislation this spring that would have established new environmental, water and energy regulations for large-scale, or “hyperscale,” data centers. Lawmakers adjourned their session May 31 without advancing the proposal, which remains under discussion.
State Rep. Carol Ammons, D-Urbana, who chairs the House Energy and Environment Committee and sponsored the bill, said during a May 26 hearing that additional input from stakeholders is still needed before moving forward.
Pritzker said the pause is intended to give the state time to evaluate whether existing incentives are encouraging development that could drive up utility costs or strain natural resources.
His administration has pushed for broader reforms tied to artificial intelligence and data center expansion, arguing that stronger safeguards are needed to ensure growth does not come at the expense of residents.
“Illinois must ensure that working families are not left paying the price through higher utility bills, strained reliability and increased pressure on local water resources,” the administration said.
While emphasizing continued support for economic development and technological innovation, Pritzker said the state needs clearer guardrails to ensure data center growth benefits communities.
The governor is calling on lawmakers, utilities, labor groups, environmental advocates, local governments and industry leaders to work together during the fall veto session to craft a regulatory framework.
Among the principles outlined by the administration:
• Data centers should pay their fair share
• State tax incentives should be paused
• Energy reliability must prioritize Illinois residents and businesses
• Developers should support new clean energy generation
• Water resources must be protected
• Strong air quality standards must be maintained
• Communities should have transparency and a meaningful voice in development decisions
Illinois Lawmakers Split the Difference in Drug Pricing Fight
Illinois lawmakers approved two bills this session aimed at the controversial federal 340B drug pricing program, giving both hospitals and drug companies partial wins.
One bill protects hospitals and community health centers by preventing drug manufacturers from restricting their access to deeply discounted medications. The other requires the state to study how much money those providers are making from the program and how they are using it.
The 340B program, created in 1992, requires drug companies that participate in Medicaid to sell outpatient drugs at steep discounts to providers serving large numbers of low-income and uninsured patients. Hospitals and clinics typically charge higher prices to insurers and use the difference to fund operations, including charity care.
Over time, the program has grown dramatically from $2.4 billion in drug purchases nationwide in 2005 to $66.3 billion in 2023, according to KFF. That growth has fueled a growing dispute between healthcare providers and the pharmaceutical industry.
Hospitals and clinics argue drug companies have unfairly limited their ability to use outside pharmacies to distribute discounted drugs, reducing access to savings. Drug manufacturers counter that providers are keeping too much of the profit instead of passing savings on to patients.
The new Illinois laws reflect both sides of that debate.
The first measure, House Bill 2371, prohibits drug companies from interfering with providers’ access to discounted drugs or their ability to distribute them through contract pharmacies. It also limits additional reporting requirements on hospitals and clinics.
The bill passed with overwhelming support, though it faced strong opposition from the pharmaceutical industry. Critics argued it reduced transparency, with one industry representative calling it “illegal to ask for receipts.”
To address those concerns, lawmakers paired it with a second measure focused on transparency.
House Bill 4327 directs the Illinois Department of Insurance to conduct a statewide audit of the 340B program. The study will examine how much hospitals and clinics pay for discounted drugs, how much they are reimbursed, and how they use the revenue generated from the price difference.
The audit will also look at how much of that money supports charity care and other services for vulnerable populations, as well as the broader impact of the program on healthcare costs, including Medicaid and state employee health plans.
In addition, providers will be required to report demographic data about the patients they serve, while drug manufacturers must disclose the total discounts they have provided under the program since 2020.
Both bills passed in the final days of the legislative session, with supporters on each side claiming progress.
Hospital and clinic leaders said the protections will help preserve access to affordable medications and critical services for roughly 1.5 million Illinois residents.
Pharmaceutical industry representatives, meanwhile, said the transparency measure is a step toward broader reforms, arguing the program is contributing to rising healthcare costs for patients and taxpayers.
The debate over the 340B program is likely to continue, both in Illinois and nationwide, as policymakers weigh how to balance cost savings, access to care and accountability.
Rideshare Union Bill Clears Legislature, Heads to Governor
Illinois lawmakers have approved a bill allowing rideshare drivers to unionize, sending the measure to the governor’s desk. House Bill 5090, sponsored by Rep. Yolonda Morris, D-Chicago, and Sen. Ram Villivalam, D-Chicago, passed the Senate 42-12-1 on Sunday and cleared the House early Monday morning on an 83-28 vote.
The legislation creates a framework for rideshare drivers to form unions, elect representatives and engage in collective bargaining.
Supporters say the bill addresses a gap in federal labor law, which classifies rideshare drivers as independent contractors. Drivers argue that despite that designation, they have little control over wages, work conditions or company policies at platforms like Uber and Lyft, leaving unionization as their only path to collective bargaining.
“This goes back to a fundamental belief that when workers are able to organize and have a collective voice, that leads to better wages, benefits and working conditions,” Villivalam said.
Morris added that drivers are facing declining pay, rising vehicle costs and safety concerns without basic workplace protection.
Under the bill, drivers must meet several thresholds to form a union. First, at least 10% of active drivers must sign cards expressing interest. That number must then reach 30% for the union to be certified. Once certified, the union can petition the Illinois Labor Relations Board to hold elections for representatives. Union membership would be voluntary.
To support the process, rideshare companies would be required to regularly provide driver contact information to the state for those who meet minimum activity thresholds. The state would then determine which drivers qualify as “active” and are eligible to participate.
The bill also requires companies to follow standard labor practices, including bargaining in good faith. Violations could result in penalties from the Illinois Labor Relations Board.
A new 4-cent-per-ride fee will be assessed on rideshare companies to fund implementation and a grant program known as the Rideshare Workers Support Fund. The law prohibits companies from passing that cost on to customers.
Rideshare drivers in Illinois have been pushing for unionization rights since at least 2019, citing concerns over pay, deactivations and lack of transparency in company policies. Supporters say the bill does not directly resolve those issues but gives drivers a mechanism to negotiate over them.
The effort was led by the Illinois Drivers Alliance, with support from labor groups including the International Association of Machinists and Aerospace Workers and Service Employees International Union Local 1.
Similar laws have been adopted in other states, including California and Massachusetts, where a statewide rideshare union was recently certified. If signed into law, Illinois would join a growing number of states establishing formal pathways for rideshare driver unionization.
Treasurer Frerichs Wins Approval of Bill to Help Nonprofits Increase Investment Opportunities
Illinois State Treasurer Michael Frerichs thanked members of the General Assembly for passing Senate Bill 2968 and expressed gratitude to Governor JB Pritzker’s office for its collaboration in advancing legislation that expands investment opportunities for non-profit organizations across Illinois.
The legislation creates the Non-Profit Investment Pool, a safe and efficient investment option allowing eligible nonprofits to make the most of available funds while reducing administrative burdens. This measure is intended to help nonprofits strengthen their financial stability and maximize resources that support communities throughout the state.
“Nonprofits are on the front lines every day, helping families, strengthening neighborhoods, and meeting critical needs in communities across Illinois,” Treasurer Frerichs said. “At a time when federal funding cuts are creating uncertainty for many organizations, Illinois is stepping up. Bipartisan support in both chambers, along with thoughtful input from the Governor’s Office, helped make this legislation possible.”
The new pool is modeled after the Treasurer’s successful Illinois Funds program, a AAA-rated local government investment pool that manages more than $20 billion for approximately 1,500 public entities. In FY25, Illinois Funds generated more than $1 billion in earnings for participating governments.
Eligible nonprofits generally must:
• Be based in Illinois
• Be a 501(c)(3), 501(c)(4), 501(c)(5), or 501(c)(6) and have a purpose or mission that meets the listed nonprofit categories
• Provide recent audited financials or charitable filings
“This investment pool will help nonprofits put their money to work in a safe, efficient way,” Frerichs said. “Every dollar earned through smart investing is another dollar that can support food, shelter, health care, education, legal aid, and other services that strengthen Illinois communities.”
“Illinois-based nonprofits should have the same high-quality investment opportunities as government entities,” said State Senator Adriane Johnson (D-Buffalo Grove). “Greater investment opportunities mean food pantries will have the resources to provide more food, homeless shelters can provide more beds, health care providers can offer more services to those in need and legal aid centers can assist more Illinoisans who have limited resources to address their legal needs. These critical organizations serve communities all across the state, and this initiative will give them the chance to maximize their resources and strengthen their financial stability.”
“Not-for-profits often act as the unseen backbones for our local communities,” said State Rep. Rita Mayfield (D-Waukegan). “They put on after-school programs for our children, support our seniors, help people access shelter, and so much more. It’s far past time that we allowed for serious investment into the organizations that are invested in the welfare of our communities.”
The legislation now heads to the Governor’s desk for his approval. Once SB 2968 is signed into law, the Treasurer’s Office will work to establish and administer the Non-Profit Investment Pool, which will allow qualifying nonprofits to deposit and invest funds, access electronic payment processing services, and have those funds invested in a manner similar to Illinois Funds, the state’s local government investment pool.
ComEd to Offer Up to $500 for Small Businesses Struggling with Electric Bills
ComEd is launching a new assistance program offering grants of up to $500 for small business customers struggling to pay their electric bills after two years of price increases tied in part to rising energy demand from data centers.
Applications open June 15 and will be available on a first-come, first-served basis at www.comed.com/SMBrelief.
The program requires a matching payment from participants. For example, a business with a $1,000 balance could receive a $500 grant but would need to pay the remaining $500.
The initiative is part of a $2.5 million relief effort aimed at helping businesses cope with higher electricity costs. ComEd says those increases are largely driven by surging demand, including the rapid expansion of artificial intelligence data centers.
The effort follows a similar assistance program for residential customers introduced last year.
“Our focus last year was residential, and we think the appropriate segment to focus on now is small- and medium-sized businesses,” said ComEd CEO Gil Quiniones.
Quiniones added that the utility will continue working with businesses on energy-efficiency strategies that can help reduce long-term costs.
While a comparable grant program for residents is not being offered this year, ComEd officials say households still have options. These include a low-income discount program launched in 2025. More information is available at www.comed.com/LID.
Customers are already seeing higher bills. The Chicago Sun-Times reported that ComEd rates increased by at least 12% starting in June, due in part to growing energy demand from new data centers.
That demand shows no signs of slowing. Quiniones said roughly 100 data center projects have been proposed across Northern Illinois, though not all are expected to move forward.
ComEd officials emphasize that while they understand the financial strain on customers, the company does not generate electricity or directly control supply prices. Instead, rates are influenced by projected demand and set through the regional grid operator, PJM.
“ComEd does not set, control or profit from” those particular price increases, the company said.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct