This Week in Springfield – 100-25


This Week in Springfield lawmakers moved one step closer to providing confidential taxpayer information to for-profit third party audit firms and moved one step closer to restricting employee scheduling flexibility.


Lawmakers are set to consider legislation that would remove employer and employee scheduling flexibility. As introduced, HB 5046 (Rep. Chris Welch, D-Westchester) would require a 72-hour notice of an employee’s weekly schedule and would impose statutory penalties if any part of the employee’s schedule is reduced or canceled after the notice. It applies to part time, full time, non-salaried, and salaried employees who make $50,000 or less. The legislation also prohibits an employer from dismissing an undocumented foreign national. Not since the Gross Receipts Tax debate have we seen such a collaboration of different industries collectively opposing a legislative initiative.

HB 5046 assumes that every restaurant, bar, grocery store, movie theatre, fitness center, pharmacy, hardware store, bank branch, school system, farm, manufacturer, construction project, municipality, daycare, park etc. operate in the exact same manner.  Different industries have unique business, employee, and regulatory variables to consider when providing schedules that promote and support their employees and HB 5046 undermines the ability of each industry to properly manage their business and support the various flexibility requests of their employees.

HB 5046 eliminates scheduling flexibility, forces employers to deny last minute requests, and creates confusion. A “one-size-fits-all” mandate fails to recognize the negative impact that the regulations will impose on employees. Once a regulation is in place, businesses are less able to respond to employee preferences and emergencies.  Restrictive scheduling constraints on flexible scheduling reduce the ability of employers to respond to changes in employee circumstances—this reduces the opportunities for employees. For instance the Full Service Workers Alliance of Seattle, which represents restaurant, retail, and hospitality workers, argues the regulations instituted by the Seattle City Council: (1) prohibit the flexible schedules they value (picking up shifts and dropping them as needed); (2) result in fewer work opportunities; (3) result in fewer benefits that are offered as perks by many establishments; and (4) create an unnecessary environment of stress between employers and employees.

A flexible scheduling model is used in various industries in order to attract and retain employees. High school, college, and post-secondary students are drawn to retail because of the opportunity to work and design a flexible schedule around their classes.  Many workers are attracted to retail positions on a seasonal basis because they can pick up a few hours in order to supplement income or pay for holiday shopping. Additionally, retailers provide flexible employment for defined populations such as youth at risk, people with disabilities, or senior citizens.  For instance, Beatrice Garza President and CEO of the Association for the Advancement of Mexican Americans (AAMA) represents at risk youth and opposes restrictive scheduling for the following reasons:

“Through our charter school, work readiness, training, and job placement programs, we help meet the stark challenges confronting at-risk youth.  Many live in single-parent homes where they are forced to shoulder financial burdens and family obligations at an early age.   Others must work part-time to finance their higher education.

These talented and deserving young Americans need flexible part-time work.  Earning income from an employer that understands their circumstances builds self-esteem and responsibility and gives them a paycheck that keeps their dreams alive.  Without part-time employment, many young people would be forced to give up their education or make other unfortunate sacrifices.

Critical to breaking the cycle of poverty is to open the door of opportunity to people from difficult circumstances.  While onerous scheduling practices benefit no one, neither do policies that punish employers willing to work with young Americans who want a brighter future.

We fear proliferation of laws recently enacted in San Francisco, and currently before city and state governments in Seattle, Washington, DC, and New York, that slash part-time work and straight-jacket the relationship between managers and their employees.  Employers across the country will eventually have fewer such positions available, and restrictive scheduling requirements will discourage the hiring of applicants with unusual life challenges.”

While considering the requests and preferences of employees, businesses must consider those through the framework of needs of the business.  A variety of data points that may be used include: employee requests, sales forecasts, productivity of the store, historic payroll and hour reports, workload, marketing or other in-store events, transportation (truck, train, barge, delivery, etc.), civic events, and guest traffic patterns. Despite a business’ best efforts to predict scheduling needs accurately in each location, the need for employees in any given location is subject to these external factors, and others, that may change frequently, unpredictably, and with little or no notice.

Finally, HB 5046 prohibits an employer from firing an undocumented foreign national that is in the U.S. illegally. Federal law prohibits employers from employing foreign nationals who are illegally present in the U.S. This would require businesses to choose between violating federal law or state law.

Different industries have unique business, employee, and regulatory variables to consider when providing schedules that promote and support their employees and HB 5046 undermines the ability of each industry to properly manage their business in support of their employees.

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The confidential and sensitive tax information of businesses is one step closer to being handed over by local governments to unaccountable third-parties.

HB 2717 (Rep. Chris Welch, D- Westchester) seeks to allow local governments to share the specific financial information of businesses within their borders with third-parties. The justification is local governments are struggling to make ends meet and last year the state reduced some of the revenue they had shared with locals. These decisions should not result in exposing Illinois businesses to fishing expeditions using partial information, and risk spilling confidential information into the public domains.

Currently, local governments receive three reports from the Illinois Department of Revenue (IDOR). First, on an annual basis and free-of-charge, they receive a geo-location report of all the businesses in their jurisdiction. This report is available more frequently upon request. Second, on a monthly basis, they receive a report of any new Certificates of Registration (i.e. new businesses) that were issued to addresses within the local government. Third, they receive three times a year a report that contacts the business name, address, amount of sales tax distributed to the local government from sales at that business as part of the municipality’s 1% share of the 6.25% state sales tax, and the amount of sales tax distributed to the local government from any sales tax imposed by that local government on sales occurring at that business. This report is provided to the chief executive of the local government under a strict confidentiality agreement that carries misdemeanor penalties for violations. This third report is what HB 2717 seeks to allow third-parties to obtain.

During testimony, the proponents claimed HB 2717 would make the current process more confidential and that there are no protections currently in place. Both claims are demonstrably false. Under current law, the chief executive of a local government cannot share the financial information with anyone. The financial information is provided to the chief executive of the local government pursuant to a strict confidentiality agreement. We already know from the testimony of the proponents at a subject matter hearing on May 1st that some chief executives are, today, violating these confidentiality agreements and sharing the information with third parties. HB 2717 would legalize and reward their disregard for the law by removing the penalties. In other words, if HB 2717 were to pass, local governments and third parties could share this information without repercussion regardless of the existence of a confidentiality agreement. It takes a tremendous leap of faith to believe that allowing this information to be shared with other parties somehow makes it more confidential. If some local governments are willing to break the law, one can only imagine what a for-profit company would be willing to do with the information.

Given the admitted abuses and violations local governments have admitted are occurring today, the Assembly should be discussing revoking local government’s access to this information particularly given the fact they cannot justify a true need for it. Despite this, the opponents, led by IRMA, have offered two separate compromises. The only item we cannot agree to is allowing these sharing arrangements by contingency-fee. Contingency-fees incentivize casting the widest net possible. That is why entities such as the National Conference of State Legislators (NCSL), the Council on State Taxation (COST), and the American Institute of CPA’s have condemned the practice. Only one state, California, currently allows them and they are ranked dead last for ease of tax administration by COST.

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Lawmakers passed HB 4595 (Rep. Laura Fine, D-Glenview) out of the House Labor and Commerce Committee that would take $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. Illinois changed its workers’ compensation system in 2011 by limiting payments for carpal tunnel syndrome and for employees who can still work but whose injuries force them into lower-paying jobs. There was also a 30 percent cut to payments for doctors, hospitals and pharmacies treating those injured on the job. As a result, Illinois experienced a 13 percent decline in workers’ compensation medical costs between 2010 and 2014.

Despite these changes, Illinois insurers’ and self-insured companies paid an estimated $2.75 billion in workers’ compensation benefits in 2014, according to the National Academy of Social Insurance. By contrast, employers in Indiana paid an estimated $589.2 million. Additionally, Illinois’ employers pay $2.23 for every $100 in payroll, while those in Indiana pay $1.05-the national median is $1.84. Today, Illinois is tied for having the eighth-most expensive premiums in the nation. Supporters of HB 4595 argue that workers’ compensation costs are still high for companies because insurance companies have not passed on the savings realized from the 2011 changes. They argue that in 2015, 332 insurance companies underwrote workers’ compensation policies in Illinois, more than in any other state, collecting $2.83 billion in premiums. In 2010, insurers reported losses of nearly 11 percent; four years later, they reported the same in profits. The insurance companies contend that while the 2011 changes likely decreased the insurers’ losses, insurers in Illinois only averaged 6.1 percent profit annually between 2011 and 2014.

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Amicus Brief Filed with US Supreme Court in Wayfair v. South Dakota

 FOR IMMEDIATE RELEASE                                                                                                          CONTACT:

March 6, 2018                                                                                                                                  Julie Larsen, 847-946-9332


Amicus Brief Filed with US Supreme Court in Wayfair v. South Dakota

Filing Seeks Fairness in the Collection of Sales Tax by All Retailers


The Illinois Retail Merchants Association (IRMA) issued the following statement from Rob Karr, president & CEO, regarding the filing of an amicus curiae brief with the United States Supreme Court in the case of Wayfair v. South Dakota by the Council of State Retail Associations, of which IRMA is a member and Mr. Karr is Vice-Chairman. Specifically, the brief requests the U.S. Supreme Court to revisit their decision in Quill Corp. v. North Dakota absolving retailers with no physical presence from collecting state sales tax.

“It has been over 25 years since the Quill decision and much has changed in our economy since 1992. The internet was in its infancy and consumers were still making more of their purchases in stores, not by clicking a link on their smartphone. Regardless of where a sale occurs, a sale is a sale, and sales tax should be applied to every sale made to an Illinois consumer. Main Street retailers – that employ your neighbors, pay property tax, and support the little league team and high school band – should be on a level playing field with out-of-state retailers that use our roads and landfills but do not have to collect the sales tax that is used to pay for this infrastructure. It is estimated that Illinois loses over $200 million in sales tax each year to remote sales where sales tax is owed but not collected. These are revenues that could be used to stabilize Illinois’ fiscal situation.

“IRMA is pleased the United States Supreme Court is revisiting the Quill decision by agreeing to hear the Wayfair case. We urge the United States Supreme Court to overturn Quill and recognize the global economy in which we live. Overturning Quill will reinstate some equity into our economy rather than continuing to reward companies with an unfair advantage as they compete with Illinois businesses while contributing nothing to Illinois’ economy.”

Tim Lehan, Chairman of the IRMA Board of Directors and a pharmacist and owner of Lehan Drugs said, “As a Main Street retailer with locations in DeKalb, Sycamore and Rockford, I can tell you that my commitment is to the communities we serve. I believe that the Supreme Court has an opportunity to level the playing field for me, and other retailers like me, who have been at a disadvantage compared to internet retailers who aren’t required to collect sales tax.” Lehan expressed his hope for the Supreme Court to reconsider its outdated decision.

About the Illinois Retail Merchants Association (IRMA)

One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 20,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.



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121 CRMA Report – January 2018

In this issue

·     Resolutions and Ordinances




Sponsors: Ald. John Arena (45th Ward), Ald. Nicholas Sposato (38th Ward), Ald. David Moore (17th Ward) and 30 Co-Sponsors

Committee: Finance

Citing the negative impacts of global warming and pollution resulting from the burning of fossil fuels, this resolution seeks to engage in a public discussion regarding whether the city should continue to invest in companies that engage in such activity. In addition, it seeks to study the benefits of revising the city’s investment policy so that it only invests in companies that engage in what the sponsors consider to be practices that are environmentally-friendly, are socially responsible and promote good governance. To the extent that investment dollars are dis-invested in companies that do not meet these standards, the city’s Treasurer and the city’s pension funds would re-invest those dollars in such endeavors as green bonds and renewable bonds without abdicating any fiduciary responsibility.




This ordinance will reduce the amount of time for posting rules and regulations issued by departments from the current 30 days to 10 days prior to taking effect, but will now require such rules and regulations to be posted on the appropriate department’s website. Unless the Rules Committee of the County Board suggests changes, the rules will be received and filed by the Committee.

The upside is that we are guaranteed that rules will appear in a public, searchable space, the downside is that those affected by the rules aren’t allowed any formal input into the process. This is transparency in name only.

The Chicago City Council is scheduled to meet again on Wednesday,
February 28, 2018 and the Cook County Board is scheduled to meet on Wednesday, February 7, 2018.


Tanya TricheTanya Triche Dawood
Vice President, General Counsel
Illinois Retail Merchants Association

This Week in Springfield – 100-24

March 2, 2018



This Week in Springfield both Chambers were in session and discussions took place regarding guns, taxes, and employment issues.


States have long been unable to collect sales tax owed on tangible personal property sold by remote (e.g. Internet) sellers. State, including Illinois, have tried to do so. Standing in the way are two pre-Internet decisions by the Supreme Court of the United States (SCOTUS). The first, ironically enough, was National Bellas Hess vs IDOR (1967). A second case, Quill vs North Dakota (1992) affirmed the Bella Hess case. TWIS readers will note that both were prior to the use of the Internet as a significant commerce channel.

Briefly, both cases ruled that unless an entity had a physical presence within a state, that state could not require the remote seller to collect the state’s sales tax. It is important to note, however, that it is not as if the tax was not due. The liability shifted to the consumer. However, there was, and is, no efficient method of ensuring consumers remit the sales tax. With the advent of the Internet, the effect was a major selling channel competing with brick-and-mortar stores but with a significant advantage because they didn’t have to collect and remit sales tax. While many remote sellers continue to exploit the opportunity, others, like Amazon and Google, are already collecting and remitting sales tax to the states.

A few weeks ago, the US Supreme Court agreed to hear a case from South Dakota (South Dakota vs. Wayfair) which could overturn the National Bellas Hess and Quill decisions and require remote sellers to collect and remit state sales tax. A few Justices had publicly indicated their belief that the previous decisions should be reviewed. Depending on who you believe, the State of Illinois could realize revenues between $200 million and $800 million.

In order to position Illinois to be able to immediately benefit if the SCOTUS rules in favor of South Dakota, SB 2577 (Sen. Cristina Castro, D- Chicago) was introduced and is supported by IRMA. In short, SB 2577, as amended by Senate Amendment #1,  mirrors the language of South Dakota with slight modifications to reflect the fact that Illinois is an occupation and use tax state as opposed to a straight sales tax state. This week, the Senate Revenue Committee reported SB 2577 as amended by Senate Amendment #1 to the floor on an agreed bill list. It now awaits consideration by the full Senate.

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As reported previously in TWIS, a broad coalition of entities organized by IRMA is fighting an attempt by a private business to seek access to the proprietary tax information of businesses. This discussion started nearly two years ago when a company, Azavar, initiated legislation designed to benefit their contingency-fee business model. Within the last year, a group of local governments formed and these local governments, number unknown, have now become the proponent. Azavar has allegedly disappeared from the conversation. Nevertheless, the legislation would benefit them. Companies like Azavar have played upon the frustrations of local governments and sold them on a get-rich-quick scheme. The proponents originally tried to pass their proposal through the Senate where it was twice defeated. They have now turned their attention to trying to force legislation out of the Illinois House. This week, their proposal, HB 2717 (Rep. Chris Welch, D- Westchester), was assigned to the House Revenue & Finance Committee and could be heard next week.

HB 2717 would allow municipalities to share private and protected business tax information with third party for-profit auditors. IRMA opposes any attempt at requiring the Illinois Department of Revenue (IDOR) to disclose tax information of businesses located with independent third-parties hired by such municipalities.

Currently, local governments receive from IDOR the following information: (1) business name; (2) business address; (3) the amount of sales tax distributed to the local government from sales at that business as part of the municipality’s 1% share of the 6.25% sales tax; and, (4) the amount of sales tax distributed to the local government from sales at that business as the result of any locally imposed sales tax administered by IDOR. This information is provided to the chief executive of the municipality pursuant to strict confidentiality requirements. Additionally, local governments receive on an annual basis a list of all businesses within their jurisdiction. This listing is available more frequently at the request of the local government. Finally, local governments also receive on monthly basis a listing of new businesses that have received a Certificate of Registration.

This proposal is an invitation to abuse and corruption because third parties are incented to make unsubstantiated accusations and trigger audits for which the businesses must pay. This is true because the third-parties are paid on a contingency-fee basis meaning there is no incentive for fairness.

Retailers are encouraged to contact their State Representatives and urge them to vote “NO” on HB 2717 or any bill that allows access to their tax information.

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 HB 4324 (Rep. Chris Welch, D-Chicago) allows any employee to file a lien against an employer’s current and future acquired real and personal property based on a wage dispute—not an administrative or judicial finding of guilt.  The bill originates from a group known as Raise the Floor Alliance. It is meant to address the situation where unscrupulous companies, usually temporary businesses, dissolve and reorganize before a wage claim is brought or adjudicated.

While the business community is aware of these unscrupulous companies and committed, and provided language to address the issue, the pre-judgement lien would erroneously ensnare and impair legitimate operations without due process. The pre-judgement lien does not receive or require a hearing and is not adjudicated on the merits.  It takes effect five days after an employee files and posts notice of the lien.  As such, as drafted, once a lien is placed on business’ assets such as merchandise, rolling stock, grain, fertilizer, equipment, building materials etc., the assets become encumbered and may not be sold to consumers, used on a project, transported, processed, or otherwise converted until the lien is removed.  The lien also takes precedent over any other liens, debts or mortgages. For instance, retailers receive a line of credit to supplement payroll and to acquire goods for the current season and the upcoming season. The pre-judgement lien would take precedence over the line of credit for both the payroll and future goods and would impair the retailer’s ability to meet payroll and prepare for the upcoming season.

Additionally, the pre-judgement lien would simultaneously be put on the business “owners” personal real property in the county of the alleged wage theft. In a meeting with the advocates, it was explained the lien would be placed on the individual’s personal property that is responsible for managing the employee.  It is unclear if this would mean the shift manager, store manager, district manager, or regional manager of a national company—or all of the aforementioned.

The Department of Labor is currently taking more than a year to adjudicate wage claims and if this bill were to pass the lien would remain until the claim is adjudicated. Filing a lien of such significance without first proving the merit of wage dispute allegations will basically subject employers to constant extortion in order to avoid dealing with a lien on their business and personal property.

A business coalition met with the advocates and committed to providing language that would address the issue. The coalition’s draft required the Illinois Department of Labor (DOL) to adjudicate wage claims within 30 days of receiving the complaint.  If an employee filed a wage claim in a reasonable time, this would make it impossible for a company to dissolve, reorganize or transfer assets to avoid a violations. Furthermore, the coalition’s draft provided that if the company is found guilty, a lien would be placed on the company’s current and future assets pursuant to the current procedures under the Illinois Civil Procedure Code. The draft also allowed the DOL or the Illinois Attorney General to freeze the assets and enter into supplementary proceedings to discover the companies previously acquired, current, and future assets.  Within hours of providing the draft to the advocates an amendment was filed that was not shared with the coalition and did not include any language from the coalition’s suggestions.

The legislation passed committee on a partisan roll call and will be held on second reading while the amendment is brought to committee for consideration. The amendment does not address the aforementioned issues and all opponents remain opposed. Return to Top


SB 193 (Sen. Kwame Raoul, D-Chicago)/Rep. Jay Hoffman, D-Belleville) allows the Attorney General (AG) to simultaneously litigate or re-litigate an issue that is being investigated or has already been adjudicated by the Illinois Department of Labor (DOL).  This would include claims under the Prevailing Wage Act, the Employee Classification Act, the Minimum Wage Law, the Day and Temporary and the Labor Services Act, and the Wage Payment and Collection Act.  Under current law the (DOL) investigates and adjudicates claims under these Acts.  Once the claim is adjudicated the DOL may forward the judgement to the AG for enforcement.  SB 193 would allow the AG the power to simultaneously investigate and bring suit against an employer. As such, an employer could be responsible for both a DOL and AG investigation and lawsuit. Additionally, the AG may re-litigate a case the DOL has already ruled upon.  For instance, if the DOL rules in favor of a business and closes the case and the AG is not satisfied with the outcome, the AG may independently open the case and re-litigate the complaint.

SB 193 passed the House with a 65-048-0 and the Senate with a 35-016-0 vote.

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Similar legislation that was vetoed by the Governor and failed to be overridden by the Senate has passed the House again.  Despite an avenue for compromise offered by the business community the advocates chose to pursue the same path traveled before. In the meantime additional jurisdictions have passed the compromise offered by the business community.

HB 4163 (Rep. Anna Moeller, D-Elgin/Sen. Christine Castro, D-Elgin) prohibits an employer from asking an employee about previous wage, salary and other compensation.  It also limits the current statutory defenses for Illinois employers while expanding the statutory penalties.  While IRMA has, from the beginning, agreed to prohibit the question as long as there are common sense exemptions, IRMA remains opposed to arbitrarily restricting Illinois’ employer’s current limited defenses and increasing current statutory penalties.

Illinois currently only has three defenses to an unequal wage claim (1) seniority system; (2) merit system; and (3) a system that measures earnings by quantity or quality of production. The advocates argue that limiting the current defenses and increasing the penalties will deter employers from violating the Equal Pay Act. In the past 11 years (excluding 2010 and 2011 where there is no available data), under the current limited defenses, there have been only 51 recorded violations of the Equal Pay Act. In that same time period approximately 707 investigations were conducted by the Illinois Department of Labor. Less than 7.5% of all claims in the last 11 years have resulted in a violation.  According to the U.S. Small Business Administration there are over 1.2 million businesses in Illinois. Assuming that a different company was responsible for each violation only .0000425% of Illinois businesses have been responsible for an Equal Pay Act violation in 11 years.  This is a 99.9999575% compliance rate.

Despite this compliance rate some business associations are willing to take a proactive step to support expanding the current Equal Pay Act to prohibit an employer from asking about a prospective employee’s wage and salary. A year ago, these associations suggested using a compromise that was accepted by all parties in Massachusetts. Since that time, Oregon, Delaware, California, and Puerto Rico have passed legislation prohibiting asking about an employee’s previous wage and salary. Oregon and Puerto Rico have adopted the Massachusetts model. So three of the five major jurisdictions support a compromise model.  Additionally, this model has been introduced in Rhode Island, Connecticut, Montana, Georgia, and Texas. Despite over 700 investigations over the past 11 years of available data 99.99% of all Illinois employers have already proven to be compliant with the current law.

It stands to reason that a reasonable compromise would be to take a proactive step forward by prohibiting the salary inquiry while recognizing the overwhelming majority of Illinois businesses have proven to promote and support both men and women in the workforce.

HB 4163 passed the House by a vote of 87-24-0 and moves to the Senate for consideration.

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SB 2275 (Sen. Bill Cunningham, D-Chicago) creates the Marijuana Legalization Referendum Act. It requires the State Board of Elections to cause a statewide advisory public question to be submitted to the voters at the November 6, 2018 general election asking whether individuals support the legalization of possession and use of marijuana by persons who are at least 21 years of age, subject to regulation and taxation that is similar to the regulation and taxation of tobacco and alcohol.

The legislation passed the Senate with a vote of 37-13-1 and has been sent to the House for consideration.

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Introduced by unions that represent call center workers, HB 4081 (Rep. Michael Halpin, D-Rock Island) creates the Call Center Worker and Consumer Protection Act and requires an employer that intends to relocate a call center or portions of a call center from Illinois to another state or a foreign country to provide notice to the State Treasurer at least 120 days before the relocation or face a $10,000 per day penalty.  The company would also be required to repay current state tax incentives and forego any future state grants, loans, or tax incentives.  The legislation fails to take into consideration real world business decisions in determining how, when, and where a business should be located or operated. It also discourages businesses from moving to Illinois.

The legislation passed the House Economic Opportunity Committee by an 8-5 vote.

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Register now to attend Business Day 2018! Jim Vandehei, co-founder and CEO of Axios and co-founder and former CEO of POLITICO, will be keynote the opening luncheon of Business Day 2018 on Wednesday, May 9th in Springfield. In 2017, Vanity Fair listed Vandehei among the 100 most powerful ‘Information Age’ thinkers while Entrepreneur magazine named him one of 2017’s “50 Most Daring Entrepreneurs”. Exercising his entrepreneurial background and long history covering politics in Washington, D.C., Mr. Vandehei will pull back the curtain and address what audiences really need to know about the White House, Congress, politics, and the media. Mark your calendars now to attend Business Day 2018 on Wednesday, May 9th in Springfield!

Business Day Registration, Click Here

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This Week in Springfield – 100-23


 At Noon on Wednesday, Governor Bruce Rauner delivered his annual Budget Address to a joint session of the Illinois General Assembly. His proposal contains a $75 billion spending plan from all sources. The general funds portion accounts for $37.6 billion. General funds are monies derived from state imposed revenue sources (e.g. income tax, sales tax, excise taxes, etc.).

The Governor struck an overall theme of emphasizing essential public services over benefits. As such, his proposal included shifting nearly $700 million in pension costs the state currently covers for local schools and institutions of higher learning back to those institutions. This shift would be done over four years – 25% per year. Accountability was the key to the Governor’s argument here noting that it is easy for these entities to enact salary increases when they bear no responsibility for the pension costs. Such a move would significantly increase pressure on property taxes. However, the Governor argued the burden to schools would be softened because of (1) increased funding through the education formula, (2) the power to dissolve or consolidate units of local government which would provide more tax revenue for schools, and (3) greater flexibility in contracting, bidding, and sharing services. Additionally, he renewed his ‘best and final offer’ in negotiations with public section unions to remove group health insurance from collective bargaining thereby allowing the state to unilaterally impose cost controls. His office estimates savings from this change to be approximately $560 million. Additionally, the Governor proposed a pay-as-you-go capital program of $2.2 billion for infrastructure.

Cuts are also a part of the Governor’s proposal including another 4% cut to Medicaid providers although it is unclear at this time if this applies to all Medicaid providers or certain Medicaid providers. The Governor noted the need to end the historic process of spending more than state government takes in which has contributed to the State’s current fiscal crisis. In his words, “to reduce government expense but not customer service.”

Finally, the Governor claimed that if the Assembly adopted a consideration reform model for state pensions and the Thompson Center were finally sold, the state could afford to begin to roll-back the income tax increases enacted over his veto last year. According to the Governor’s proposal, the income tax could be reduced by ¼ of 1%.

Democratic response immediately focused on their belief that his proposal is out of balance by as much as $1.5 billion because he is relying upon passage of items they claim legislative Republicans will not support such as shifting the pension payments back to local schools and universities/colleges. Additionally, while the Governor’s proposal does set aside several hundred million to help pay off back-bills owed to those who have supplied goods and services to the State, those back bills currently total nearly $9 billion.

In response to the speech, IRMA issued the following statement: “Retail serves as an important economic engine for the state, and yet we continue to see razor thin margins as regulations, mandates and taxes continue to squeeze Main Street retailers. IRMA is concerned about the continued cuts and devaluing of Medicaid providers as well as its impact on the populations they serve. Pharmacies serve on the front lines when it comes to treating Medicaid patients, especially in areas with few medical options. IRMA stands ready, as it always has, to work with both Governor Rauner and legislative leaders on both sides of the aisle in passing a budget that will best serve Illinois’ constituents and restore its stability and competiveness,” said Rob Karr, president & CEO, IRMA.

This address begins the long budget process that may, or may not, conclude with a budget near the scheduled adjournment at the end of May.


Register now to attend Business Day 2018! Jim Vandehei, co-founder and CEO of Axios and co-founder and former CEO of POLITICO, will be keynote the opening luncheon of Business Day 2018 on Wednesday, May 9th in Springfield. In 2017, Vanity Fair listed Vandehei among the 100 most powerful ‘Information Age’ thinkers while Entrepreneur magazine named him one of 2017’s “50 Most Daring Entrepreneurs”. Exercising his entrepreneurial background and long history covering politics in Washington, D.C., Mr. Vandehei will pull back the curtain and address what audiences really need to know about the White House, Congress, politics, and the media. Mark your calendars now to attend Business Day 2018 on Wednesday, May 9th in Springfield!

Business Day Registration, Click Here