121 CRMA Report – November 2017

In this issue:

CHICAGO BUDGET
COOK COUNTY BOARD BUDGET
CITY COUNCIL UPDATES

More about CRMA

Chicago Budget Wrap-Up

Both the Chicago City Council and the Cook County Board passed their 2018 budgets last week with Chicago issuing a new round of taxes, fees and along with highlighting some savings and with the County swapping its controversial sweetened beverage tax for cuts in employee headcount.

After the last few years of implementing significant tax increases, the Chicago City Council balanced its budget with the last round of the property tax increase, another round of the water/sewer tax increase, an increased rideshare tax, increased taxes on cell phones and land lines, increased taxes for large entertainment venues, increased change of officer fees for liquor licensees and increased restaurant licensing fees. The restaurant licensing fees are being increased to help accommodate the hiring of more inspectors. As noted before in this publication, the city was under tremendous pressure to ensure that high-risk establishments were being inspected at least once per year. Increasing headcount will allow them more opportunity to focus on annual inspections. The increased phone taxes will be used to upgrade the city’s 911 system and allow money to be diverted to help make additional payments to the Laborers Pension Fund. The increased property taxes and water/sewer taxes will go do make additional payments to the police and fire pensions and the municipal employees’ pension respectively.

The $8.6 billion budget passed without much fanfare in comparison to the previous two budgets that carried a much heavier tax burden. That said, the budget is being criticized for not addressing Chicago’s long-term structural deficit which some in the economics community have warned will necessitate higher taxes in the very near future. Compounding that concern is the fact that the next municipal election will take place in 2019, so it is unlikely that we will see significant tax increases prior to that time.

The budget passed with a vote of 47-3 with the dissenting votes cast by Aldermen Arena, Ramirez-Rosa and Waguespack who all had concerns about how the tax and fee increases would affect families that have working heads of household. Moreover, they were concerned about part of the money raised from the rideshare tax going to the Chicago Transit Authority for system improvements and sending surplus Tax Increment Financing money to the Chicago Public School system. The Chicago City Council has no oversight of either agency and therefore, the dissent argues that there is no way for them to ensure that the money shifted to those agencies will be used for their intended purpose and will not be mismanaged. Mayor Emanuel sees this budget as taking another step towards putting public pensions on the road to solvency considering the financial condition the city was in when he first took office in 2011. The new budget takes effect on January 1st.

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Cook County Produces a Balanced Budget With No New Taxes

After balancing a portion of its 2017 budget with a controversial tax on sweetened beverages (SBT) and promising that the revenue from that tax would account for a significant portion of the 2018 and 2019 budgets, President Preckwinkle and the Cook County Board knew they had a serious problem on their hands when, in a 15-2 vote, the SBT was repealed. The County’s Finance Department estimated that the expected revenue for 2018 from the SBT would bring in $200 million. After Cook County residents told Commissioners unequivocally that they were in no mood for more taxes, and with the entire Board up for election in 2018, President Preckwinkle and the Board rolled up their collective sleeves and proceeded with the very difficult business of making tough but necessary cuts.

When the dust settled, just over 300 Cook County employees, mostly within the control of the Office of the Chief Judge and the Office of the Sheriff, will lose their positions by the end of the year. In addition, hundreds of unfilled but budgeted positions were taken off the rolls. Originally, President Preckwinkle asked each department to make an 11% across the board cut, but a number of departments claimed that they were either unable or unwilling to make such cuts. Therefore, much of the cutting was left up to President Preckwinkle herself after considering some persistent internal lobbying and last-minute adjustments. There will be increased furlough days for employees who will continue working into the new budget. The cuts will affect both union and non-union positions, both frontline employees and support staff. Many cuts involved middle managers that oversee a small amount of employees.

After all of the talk of how the SBT was necessary to keep the County afloat, the County proved that instead, cuts could be made. It is our hope that for future budgets the County will take a closer look at ways to operate more efficiently instead of supporting knee-jerk, regressive taxes that anger voters and put jobs in the retail, manufacturing and distribution industries at risk. We are pleased with the County’s choice to listen to the residents and cut instead of tax. The SBT will officially be repealed on Friday, December 1, 2017.

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CITY COUNCIL ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

ORDINANCE – AMENDMENTS TO THE FOOD CODE, Part 1; Part 2

Sponsor: Mayor Rahm Emanuel

Committee: Health and Environmental Protection

The Department of Public Health has issued this proposal in order to bring its Code in line with the state’s Code. For some time now, the state has been involved in a process of making changes that would have much of its health Code mirror the federal Model Food Code. Since the city of Chicago separately inspects food establishments, it was imperative to bring all of the Codes in line so that proprietors could have a better understanding of what is expected of them to successfully run a food establishment in the state. As a part of this process, the department is developing a rulemaking process where, before a rule is promulgated, there will be an opportunity for members of the public to comment. The Commissioner will publish the notice of rulemaking in a local newspaper or, in the case where written comments will be allowed, will send an email notification to all who sign up with her office. Once a notice is issued, comments will be allowed for 30 days. We should note that the language for many sections has been deleted so that much of the food Code can be accomplished by rule.

There would need to be a person who holds a Food Service Sanitation Manager’s Certification (FSSMC) on duty at all times that food is being prepared and that person must be designated as the person in char. A number of the definitions in the Code have now been changed to fully align with the Model Food Code, and other definitions have been added. Dog-friendly areas have now become “animal” friendly areas to accommodate for the expanded definition of service animals, although it is still lawful to have a dog-friendly area that is limited to dogs only. It will be unlawful to deny a person a right of entry into a retail food establishment if they are accompanied by their service animal in accordance with the federal Americans with Disabilities Act. The sections on vegetables, fruits and berries as well as candy, the manufacture of bottled water and non-alcoholic drinks, frozen desserts and mixes, milk and milk products are deleted in their entirety.

There are several sections regulating “unwholesome” food, but there is no accompanying definition. Lastly, the FSSMC certification fee is increased from $35 to $45.

We encourage you to please read this proposal in its entirety as it has been many years since the department has attempted a revision of this magnitude. Please also review this breakdown of many of the changes issued by the department. We need to hear from you regarding any questions or concerns you may have about this proposal.

 

PASSED LEGISLATION

2018 MANAGEMENT ORDINANCE, Part 1; Part 2

Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: January 1, 2018

The annual Management Ordinance is issued in conjunction with the city’s budget process. It makes changes to several areas of the Municipal Code, some of which can include fee increases.

 

Building Code Re-inspection Fees

If the department has to come out and re-inspect in order to approve a permit or for license compliance purposes, businesses will be charged for the re-inspection. Previously, businesses were not charged for the initial or for a re-inspection. They were only charged if, after either failing the re-inspection or not being ready for the re-inspection at all, the department had to come out a third time. The amount of the fee will be determined by the costs to the department to do the subsequent inspection. Businesses will also be charged if the scheduled inspection is cancelled less than 24 hours in advance or if the work performed was contrary to the work identified on the application. There are limited exceptions.

Sign Permits

It shall be the duty of any entity that offers advertisement space or who advertises on any sign to ensure that the sign has a valid permit issued by the department. Any changes to signs that are different from the information provided on the application for the permit must be submitted to the department within 10 days of the change, including for signs whose permits were issued on or before May 19, 2012. This section also lays out the conditions under which a sign permit can be revoked. All off-premise signs must display their permit numbers issued by the department. Abandoned signs and sign structures have been given more robust definitions. Abandonment of signs must be reported to the department and removed within 30 days of the report. Owners, lessees and other persons in control of signs that are removed by the department will be held jointly and severally liable for all expenses related to removal. Tents and canopies must be erected by a general contractor.

 2018 REVENUE ORDINANCE

Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: January 1, 2018

Amusement Tax

The city currently imposes a tax on patrons of amusements at the rates of 5% for live theatrical, musical or cultural performances in spaces with a capacity of more than 750 persons. That tax will now increase to 9% for such performances that occur in a space with a maximum capacity of more than 1500 persons. The tax will affect theatre goers at Chicago’s largest theatres which would include performances of Hamilton and sporting events at Wrigley Field, Soldier Field, the United Center and Guaranteed Rate Field. The proposal would remove the tax for smaller venues and not-for-profit venues would remain untaxed. IRMA joined with other business groups, the large theatres and sports/concert venues in opposition to the tax which would have a residual effect on retail and restaurants as large events bypass Chicago for locations in St. Louis, Milwaukee or even the suburbs, but the tax will go into effect as proposed.

911 Surcharge

The 911 surcharge on cell phones and land lines will increase from the current $3.90 to a monthly rate of $5.00. The tax, which is expected to net approximately $27 million, will largely be used for upgrades to Chicago’s 911 center. The ability to increase the tax was granted to the city in a telecommunications bill that passed through the state legislature this year and was signed by the Governor. If an increase in this tax sounds familiar, that’s because the City Council voted to increase the fee to its current amount two years ago.

Change of Officer Fee

Any change of officer for a license granted under the city’s general licensing provisions will illicit an increased fee to the city. The filing fee for notice of the change will increase from $40 to $250 with a slightly decreased fee for any additional persons requiring a background check. For those persons wishing to file a change of officer notice and not requiring a background check, the fee will increase from $20 to $100. If the change of officer is for a liquor licensee, then the fee goes from $100 to $500 if the officer has no ownership interest or owns less than 5% of the business. If the officer owns 5% or more, then the fee increases from $250 to $2000.

Tobacco Licensing Fee

Tobacco licenses are scheduled to go from a two-year license to a one-year license. Therefore, the current fees are cut in half as they will now be paid on an annual basis. There is no overall increase or decrease in the fees.

Food Inspection Fees and Fines

The city is tasked with annual inspections for high-risk establishments (restaurants), but has not had a great track record of getting all of the inspections completed in a timely manner. In fact, many restaurants were not being inspected annually. In order to correct the problem, the city will hire additional inspectors to handle the load, and therefore will need to pay for them. Therefore, it will increase restaurant licensing fees according to the following schedule:

Less than 1000 sq. ft. = remains at $660

1001-2500 sq. ft. = increase from $880 to $940

2501-4500 sq. ft. = increase from $1100 to $1110

4501-10,000 sq. ft. = increase from $1100 to $1320

Over 10,000 sq. ft. = increase from $1100 to $1650

Food Establishment Re-inspection Fees

Any re-inspection that addresses a violation previously identified by the department will be charged at a fee of $100 instead of the current $50.

 PROPERTY TAX LEVY 2018

Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: January 1, 2018

This is the next previously scheduled increase in property taxes. As a part of the 2016 budget, the City Council voted to implement the largest increase in property taxes in Chicago’s history over a period of 4 years beginning in 2015. 2018 is the final year of increases. The increase should net $63 million.

 

ORDINANCE – ENERGY PERFORMANCE RATING SYSTEM

Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: June 3, 2018

Chicago will establish its own energy performance rating system for covered buildings which assigns stars based on performance. Water usage information would be made readily available to the public. A four star rating would be the highest and zero being the lowest. Buildings would be provided their rating on an annual basis and must disclose their score in any advertisement to sell the building as well as display the score on the outside of or directly inside the building so that it is visible to visitors. This ordinance will not require businesses to collect any information not already being collected, the city just wants to maintain its own rating system. We should note that the star rating system does not necessarily follow a federal model, so in order to appropriately determine the meaning of the number of star awarded, a person must become familiar with Chicago’s exclusive system. There are a few exceptions.

 

RESOLUTION – BALLOT QUESTION RELATED TO OPIOID EPIDEMIC

Sponsor: Alderman Patrick O’Connor (40th Ward) 

In advance of the General Primary election scheduled to take place on March 20, 2018, the Mayor’s office put forth three ballot questions for consideration by city residents. The questions are usually, but not always, non-controversial and the vote is informative, but not binding. This year the topics for the questions cover the banning of bump stocks in response to the mass shooting in Las Vegas, the protection of residents currently relying on the ACA to provide them with medical coverage to ensure that the ACA is not rolled back, and developing a comprehensive statewide strategy to address the opioid crisis. As pharmacies play an important role along the healthcare continuum, we find the ballot question on the opioid issue of particular interest to our pharmacy members. All three questions passed and will appear on the March ballot.

Both the Cook County Board and the Chicago City Council meetings are scheduled for 

Wednesday, December 13, 2017.

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CONTACT

Tanya TricheTanya Triche Dawood
Vice President, General Counsel
Illinois Retail Merchants Association
312-726-4600
ttrichedawood@irma.org

This Week in Springfield – 100-20

WAGE HISTORY
UNEMPLOYMENT INSURANCE AGREEMENT
GIFT CARDS/UNCLAIMED PROPERTY
TELECOMMUNICATIONS MODERNIZATION
GEO-LOCATION AND $15 MINIMUM WAGE
2018 SESSION SCHEDULE

 

This Week In Springfield, lawmakers returned to Springfield for the second and final scheduled week of the 2017 Veto Session. Lawmakers returned amongst a maelstrom over allegations of sexual harassment.

In between House and Senate sexual harassment training seminars, lawmakers continued to override some of Governor Bruce Rauner’s total vetoes and amendatory vetoes.  Of the 39 total vetoes issued by the Governor, 15 were overridden while 22 were sustained. The rest were not called for an override so the veto stands. Of the 10 amendatory vetoes issued by the Governor, three were overridden, three were sustained, and four were not called for an override or acceptance of the amendatory veto. The vetoes overridden included, but were not limited to, Comptroller Susana Mendoza’s ‘Debt Transparency’ bill (HB 3649), Treasurer Michael Frerich’s ‘ Life Insurance’ bill (HB 302),  and the Illinois Student Loan Bill of Rights (SB 1351 Sen. Daniel Biss, D-Evanston/Rep. Will Guzzardi, D-Chicago). At one point, the Senate overrode eight vetoes in 21 minutes. By the end of the week 18 total and amendatory vetoes were overridden and 23 were sustained. By comparison, prior to this year only one gubernatorial veto was overridden.

Although a surprising number of the Governor’s vetoes were rejected by lawmakers, they were unable to override the Right to Work veto that provides the foundation, symbolically or otherwise, to his Turnaround Agenda.

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WAGE HISTORY

Last week, several House Republican lawmakers joined Democrats in overriding the Governor’s veto of the Pay History Prohibition legislation, HB 2462 (Rep. Anna Moeller, D-Elgin/Sen. Daniel Biss, D-Skokie). The bill sought to prohibit an employer from asking job applicants their wage or salary history. The idea is that women are getting paid less than men and this follows them from job to job. The theory is that if an employer is not able to ask about a person’s previous wage they will be paid more.

In reality, the bill does a great deal more than just prohibit employers from asking about prior wages and salaries. It does not allow a company to base an employee’s salary or raise on seniority, merit, quality or quantity of production. These are the current defenses to an unequal pay claim in Illinois and almost every other state. Courts have repeatedly upheld this process as legitimate business measures that protect and promote employees. HB 2462 would have prohibited a company from using these common sense and practical measures as defenses if an employee can find any “alternative practice” used by any company in the United States for a similar job.  In Illinois, a state of just under13 million people, only 266 claims have been filed in the last four years. Only 13 claims were found to have any merit. Only ½ of 1% of all businesses in Illinois are responsible for any paid out unequal pay claims. Companies spent more money defending frivolous claims than unequal pay claims were awarded by the courts. Frivolous claims will only be exacerbated by the fact the legislation also provides for additional penalties that includes but is not limited to compensatory damages, punitive damages, and special damages. Additionally, a claimant would be allowed to pursue federal damages in addition to the state damages. Unfortunately for all, this all could have been avoided if compromise was alive and well in Springfield.

Early in the process, IRMA drafted legislation that was based off the Massachusetts law that was supported by Massachusetts businesses and advocacy groups alike. IRMA and a coalition of business associations including the Illinois Manufacturers Association and the Illinois Chamber supported this legislation. Rather than negotiate a compromise, the proponents ‘accepted’ two minor changes, concluded they compromised, and dared legislators to vote against women. Fast forward to the Senate override, when it became clear that lawmakers understood the overreach of the legislation in lieu of the offered compromise by the business coalition and there was not enough votes for the override, the proponents drafted another ‘compromise’ that removed one minor penalty but left the remaining six penalties in the legislation and made no other substantive changes or considered the aforementioned Massachusetts model. Lawmakers in the Senate responded to this faux compromise by sustaining the veto by a vote of 29-17-1. IRMA would like to thank those legislators who voted to sustain the Governor’s veto. The advocacy groups continue to reject compromise and have vowed to re-introduce the legislation next year.

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UNEMPLOYMENT INSURANCE AGREEMENT

Every two-to-three years the business community and labor come together and enter into an agreed bill process for unemployment insurance. IRMA leads the business coalition while AFL-CIO leads the labor coalition. Two years ago, the process led to labor getting the repeal of the Social Security offset and employers getting a re-definition of ‘misconduct’. This year SB 1381 (Rep. Jay Hoffman, D-Bellevue/Sen. Terry Link, D-Gurnee) is the result of the agreed bill process and extends the ‘speed bumps’ for another two years. Speed bumps are increases in UI taxes on employers and UI benefit cuts on labor. ‘Speed bumps’ are intentionally inserted to incentivize both sides to return to the table to review the current UI agreement and negotiate any changes that may be necessary for either side, or the Governor’s Office, desires.  In this case, no changes are necessary and it is speed bumps that brings everyone together.  As it is an agreed bill, it passed the House and Senate unanimously.

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GIFT CARDS/UNCLAIMED PROPERTY

Last year lawmakers passed a revenue bill to pay for the state budget that included a sweeping re-write of Illinois’ unclaimed property law. At that time, working with the office of State Treasurer Frerich’s, IRMA managed to preserve the exemptions for gift cards and remove a provision that would have made in-store credit escheatable. The Governor vetoed the revenue bill because it also increased income taxes but it was subsequently overridden. Over the summer, IRMA and other parties worked with the Treasurer’s Office on a trailer bill to clear up some ambiguity in the legislation.  SB 868 HA#2  (Sen. Mattie Hunter, D-Chicago/Rep. Deb Conroy, D-Villa Park) resolves the ambiguity regarding a gift card versus a store value card. SB 868 passed both the Senate and the House unanimously.

IRMA would like to thank the Treasurer’s Office for their willingness to consider clarifying language.

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TELECOMMUNICATIONS MODERNIZATION

IRMA testified in House and Senate committees in favor of a proposal enabling the implementation of small cell “networks” in Illinois by telecommunication companies. IRMA testified that with mobile data traffic expected to double annually, small cell base stations are set to play an important role in expanding the capacity of retailers to meet the technological demands of the consumer for highly customized, on-demand services. At a time when consumers are relying on smartphones and tablets more than ever for their shopping needs small cells address coverage, capacity, and reliability concerns to ultimately enable a superior experience both consumers and retailers and the use of cutting edge, data intensive technologies not only in retail but all business sectors such as manufacturing, healthcare, and finance.  To meet these demands, SB 1451 (Sen. Terry Link, D-Gurnee/Rep. Kelly Burke, D-Oak Lawn) updates the regulatory framework to enable the latest technology networks, like 5G, that depend on deploying a large volume of small cells.

SB 1451 passed both the House and the Senate and now will be sent to the Governor for his signature.

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GEO-LOCATION AND $15 MINIMUM WAGE

As reported last week there a few vetoes that were not called for an override due to the fact the sponsors did not have the requisite votes for an override. These included Geo-location (HB 3449), Workers Compensation ‘Reform’ (HB 2525), and $15 Minimum Wage (SB 81). The sponsor of the minimum wage bill specifically stated that she did not have enough support in the Senate for an override. IRMA appreciates our members’ support and due diligence in educating lawmakers on the negative impact this type of mandate would create and is creating in jurisdictions who have implemented such increases.

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2018 SESSION SCHEDULE

The 2018 legislative calendars for each chamber were released this week. You can view the House schedule here and the Senate schedule here.

 

This Week in Springfield – 100-19

IN THIS ISSUE:

This Week in Springfield the Capitol caught fire while lawmakers looked to override or sustain Governor Bruce Rauner’s veto.

As lawmakers returned to Springfield to consider vetoes and other business a rogue space heater started a fire that caused the temporary evacuation of the Capitol. The temporary respite did nothing to stall the inevitable bipartisan overrides that were partially ignited by Governor Rauner’s signature on a ‘state funded abortion’ bill (HB 40) and ‘sanctuary state’ bill (SB 31) that caused much consternation among some lawmakers in the Republican Party.  This consternation was evident as Republican lawmakers in the House joined Democrat lawmakers in overriding the Governor’s veto of several bills which included but are not limited to Comptroller Susana Mendoza’s ‘Debt Transparency’ bill (HB 3649) and Treasurer Michael Frerich’s ‘ Life Insurance’ bill (HB 302)–both of these bill head to the Senate where the same outcome is expected.  Governor Rauner was not without some ‘wins’ of his own. While some Senate Republicans joined Democrats in overriding the Governor’s veto of a bill that would have prohibited right-to-work zones in Illinois (SB 1905), the veto was subsequently sustained by one vote in the House.

None of the aforementioned bills necessarily have a direct impact on retail but are worthy to note in that there are more than the usual political undercurrents in play during this Veto Session.

Republican lawmakers also helped Democrats in overriding the Governor’s veto on the Gender Pay History legislation, HB 2462 (Rep. Anna Moeller, D-Elgin/Sen. Daniel Biss, D-Skokie). The bill prohibits an employer from screening job applicants based on their wage or salary history. The idea is that women are getting paid less than men and this follows them from job to job. In order to stop this perpetual cycle, an employer will not be able to ask about a person’s previous wage therefore, the theory goes, previous inequities cannot be taken into consideration when offered a new salary.

This override was expected as it initially passed the House with 91 votes–20 votes more than the 71 needed for an override. This legislation is prime example of a “wedge” issue propagated by the anti-Trump/anti-Rauner reactionaries. Despite evidence that this initiative would actually hurt employees, including women, Democratic lawmakers wanted to force Republican lawmakers into a vote that would have been marketed as ‘anti-woman’ in a time when the Republican Party is being portrayed as not inclusive. What is surprising is that although the veto was overridden, it only garnered 81 votes, more than needed but less than it initially passed the House.

HB 2462 now moves to the Senate for an override vote. It should be pointed out that although HB 2462 initially passed the House with a veto proof majority. It did not pass the Senate with a veto proof majority.  IRMA expects the Senate to override the veto but it will be closer than first expected.

Additionally, lawmakers sustained the Governor’s veto of a bill that would have created a state run workers’ compensation program. HB 2622 (Rep. Laura Fine, D-Glenview/Sen. Daniel Biss, D-Skokie) would have required $10 million in employer money from the Workers’ Compensation Commission Operations Fund to create a state-run Illinois Employers Mutual Insurance Company to compete with the over 300 private insurance companies already competing in Illinois. HB 2622 passed the House with a partisan vote of 67-51 and the Senate with a vote of 32-20-1. On the override motion, the House Democrats stood alone and could only muster 65 votes–6 votes shy of the requisite 71.

The following vetoes were not considered this week, but still may considered during the second week: Geo-location (HB 3449), Workers Compensation ‘Reform’ (HB 2525), and $15 Minimum Wage (SB 81). IRMA does not believe any of these initiatives have enough support for a veto override.

Finally, lawmakers considered legislation beyond veto motions. This included an unemployment insurance (UI) bill agreed upon by employers and labor. SB 1381 (Rep. Jay Hoffman, D-Bellevue/Sen. Terry Link, D-Gurnee) extends the ‘speed bumps’ for another two years. Speed bumps are increases in UI taxes on employers and UI benefit cuts on labor. ‘Speed bumps’ are intentionally inserted to incentivize both sides to return to the table to review the current UI agreement and negotiate any changes that may be necessary or either side, or the Governor’s Office, desires.  In this case, no changes are necessary and it is speed bumps that brings everyone together.  As it is an agreed bill, it passed the House unanimously and IRMA expects the Senate to pass it during the second week of the veto session.

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121 CRMA Report – October 2017

In this issue

CHICAGO BUDGET ADDRESS
COOK COUNTY BUDGET PREVIEW
CITY COUNCIL UPDATES

CHICAGO BUDGET ADDRESS

Earlier this morning, Mayor Rahm Emanuel delivered his budget address for the upcoming 2018 budget year. Much of the speech focused in on the importance of investing in communities, from using the Neighborhood Opportunity Fund to develop and expand neighborhood retail and restaurant businesses to hiring more police officers and getting them better training, to investing in education and increased local job opportunities for teens and young adults. As for the city’s finances, the Mayor noted that all of the pensions are on a direct path to solvency, that he is balancing the budget without raiding the rainy day fund, selling assets or borrowing money to pay off existing loans. Through tough negotiations, the city has been able to keep its healthcare costs relatively flat and decreased its structural deficit since the Mayor’s been in office by 82%. He highlighted how important it was to eliminate the head tax during his first term, and announced that unemployment over the last six years has been cut in half.

The city’s $9 billion budget for 2018 will build on these successes but will not be without some additional revenue. The next installment from the previously approved increases in the property tax will hit next year as well as an increased amusement tax for large venues. Ride share fees will also increase in order to tackle public transportation modernization and address lost revenue from the parking garage tax and the flailing taxi industry. Outside of the previously scheduled property tax increase, the retail and restaurant industry should be able to survive next year’s budget largely unscathed. This will give us some time to figure out how to adjust to the next increase in the minimum wage, find ways to address the complexities of the paid sick leave and FMLA ordinance and prepare for any additional proposed regulations on the workforce.

The departmental budget overview will kick off on Monday, October 23rd with a public hearing on the budget scheduled for Wednesday, November 8th directly after the City Council meeting. CRMA will attend all departmental hearings that affect the retail industry and continue to update you on the budget process. All relevant budget documents can be found here.

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COOK COUNTY BUDGET PREVIEW

Cook County Board President, Toni Preckwinkle, issued her annual budget recommendation prior to the vote on the sweetened beverage tax (SBT) repeal. The $5 billion budget for 2018 originally included $200 million in revenue from the SBT. Before the vote to repeal the tax, President Preckwinkle warned each department that they would have to find 11% in cuts in their departments to make up the “lost” revenue. It is hard to imagine how in a $5 billion budget, a lost $200 million would necessitate cuts that deep, but it made headlines. Now that the SBT repeal vote is over, and the tax will actually be repealed on December 1, 2017, the Finance Chairman is asking each department to find 10% in cuts to kick off actual budget discussions.  

It is clear from the speeches made during the SBT repeal vote that Commissioners will be looking for ways to make the county leaner and more efficient before pursuing another tax. With 85% of the voters in Cook County expressing their opposition to the SBT, and frankly, to more taxes, Commissioners have their marching orders. They must find ways to maintain essential services, collaborate with the city of Chicago to save money and consolidate. The days of telling taxpayers that the County needs more revenue from them in order to survive, and then turning around and approving generous pay raises, increased benefits and future step pay increases are over. The taxpayers want a proper accounting for how the money is spent and for how the County plans to hold the line on spending. Employers want the same thing.

The County will be engaging in meetings through mid-November to hear from each department on how it plans to make cuts and increase savings. The budget will be adjusted throughout this process until a compromise is reached. Generally the County issues its budget before the Thanksgiving holiday, but this year, it may extend that process. Depending on how negotiations proceed, the County could issue its budget in February which is allowed by state law. We will keep members informed on the progress.

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CITY COUNCIL ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

ORDINANCE – BAN ON REFUSING CASH AS PAYMENT FOR GOODS/SERVICES

Sponsors: Alderman Edward M. Burke (14th Ward) and Alderman Walter Burnett (27th Ward)

Committee: License and Consumer Protection

A recent Chicago Tribune article highlighted the “trend” of some retailers and restaurants moving away from allowing customers to pay with cash and instead only accepting card and mobile payments. The proposal cites concerns with escalating credit card balances and unnamed studies that suggest that when consumers pay with credit cards they are more likely to spend more. It also refers to a promotion offered by VISA that offered financial rewards to restaurants that met its “Cashless Challenge” by converting exclusively to cashless transactions. The proposal suggests that going cashless is a ploy to help enrich credit card companies while giving merchants access to consumer data with every swipe of the card. This data, according to the proposal, can then be susceptible to a breach, or it can be shared/sold for marketing purposes.

The proposal continues on to suggest that cashless transactions have a disproportionate effect on children under the age of 18 who are unable to apply for credit cards, as well as undocumented immigrants, the homeless and low-income consumers who are un-banked or under-banked. As evidence of this trend, the proposal names several restaurant chains where the price of a cup of tea can run $4.00 and a salad or sandwich averages $10.00. Hardly a place where the homeless or customers on a fixed income are frequenting.

Suggesting that this is a solution in search of a problem, the only other jurisdiction that has passed a law requiring merchants to pay with any acceptable form of legal tender is Massachusetts. That law was passed in 1978, prior to the internet being invented.

CRMA is currently developing its position on this matter.

 

ORDINANCE – EMPLOYEE DISCRIMINATION

Sponsors: Alderman Gilbert Villegas (36th Ward) and Alderman Carlos Ramirez-Rosa (35th Ward)

Committee: Human Relations

This proposal would prohibit employers from discharging, or otherwise discriminating against, an employee for changing or attempting to change their name, SSN or federal employment authorization document. It is unknown at this time if this is related to the city developing its own ID card for use with city services, but this section is being added to that section of the Municipal Code.

CRMA is currently developing its position on this matter.

 

ORDINANCE – ELECTRICAL CODE AMENDMENTS

Sponsor: Mayor Rahm Emanuel

Committee: Zoning, Landmarks and Building Standards

Most of the changes made here are not substantive and look like an attempt to clean up some of the Code and ensure that the correct citations to other parts of the Code are noted by reference. There is new language governing branch circuits, feeders, PVC, RTRC, luminaires, lampholders and lamps. Please ensure that persons in control of your building operations review the changes.

CRMA takes no position.

 

ORDINANCE – ENERGY PERFORMANCE RATING SYSTEM

Sponsor: Mayor Rahm Emanuel

Committee: Zoning, Landmarks and Building Standards

This proposal would set in place an energy performance rating system for covered buildings which assigns stars based on performance. A four star rating would be the highest and zero being the lowest. Buildings would be provided their rating on an annual basis and must disclose their score in any advertisement to sell the building. Water usage information could be made readily available to the public.

CRMA takes no position at this time. Please let us know if you have concerns.

The next City Council meeting is scheduled for Wednesday, November 8, 2017.

The next Cook County Board meeting is scheduled for November 15, 2017.

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Tanya TricheTanya Triche Dawood
Vice President, General Counsel
IL Retail Merchants Association
312-726-4600
ttrichedawood@irma.org

121 Report – CRMA – August 2017

CITY COUNCIL ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

 

RESOLUTION – CALL FOR CITY TO FILE REQUEST FOR REVISED PROPERTY TAX ASSESSMENTS

Sponsor:  Alderman Anthony Beale (9th Ward)

Committee:  Finance

 A recent Chicago Tribune investigative report raised concerns that property in Cook County was being over-assessed in poor neighborhoods and under-assessed in more wealthy neighborhoods.  Suggesting that the system used to evaluate a property’s value was fundamentally flawed, the report indicated that a more fair and accurate system, developed by professors at the University of Chicago, was never implemented.  The report set off a media blitz questioning the direction of the Assessor’s office, led by Joe Berrios.  Subsequently, the Cook County Board held a meeting to question the Assessor regarding the allegations made in the Tribune report and have vowed to make changes.

This resolution asks for the city to file a request for the Assessor’s office to revise assessments made on Chicago’s homes and businesses if the assessment resulted in a more than 7% negative variance from the market value of the property.  In addition, the resolution requests that the assessor’s office write rules for how it will address the inequities highlighted in the report.  Lastly, it directs the city’s Corporation Counsel to review whether there were any civil rights violations as a result of the current assessment system.

 

ORDINANCE – REGULATION OF AUTOMATIC SHUT-OFF VALVES AT GAS STATIONS

Sponsor:  Alderman Raymond Lopez (15th Ward)

Committee:  Finance

Concerned that gas station owners are not being diligent in ensuring that the automatic shut-off valves in their pumps are in good working order, Ald. Lopez introduced this proposal to require more frequent inspections of gas stations and greatly increasing fines specifically for not having an appropriately operational automatic shut-off valve.  Today the fine is not less than $500 and no more than $1000 for each offense.  The new fine for automatic shut-off valves would increase to $2500 per offense per day until the problem is fixed.

 

ORDINANCE – REVISION TO THE ELECTRICAL CODE

Sponsor:  Mayor Rahm Emanuel

Committee:  Zoning, Landmarks and Building Standards

This over 200-page document seeks to update and revise the city’s electrical code.  It is an attempt to bring the code in line with the National Electrical Code.  The city’s code has not been updated in about 14 years, and as you can imagine, much has changed.  We encourage your real estate professionals and building teams to review the changes and contact us with questions or concerns.

The City Council and Cook County Board do not meet in the month of August.  The next City Council meeting is scheduled for Wednesday, September 6, 2017 and the Cook County Board is scheduled to meet on Wednesday, September 13, 2017.

 

Tanya TricheTanya Triche Dawood
Vice President, General Counsel
Illinois Retail Merchants Association
312-726-4600
ttrichedawood@irma.org