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Illinois Gov. Pat Quinn announces a new Organized Retail Crime law designed to separate it from other felony retail theft and to serve as a deterrent to sophisticated crime rings.
Gov. signs major ORC law
The importance of Illinois’ new Organized Retail Theft law was pretty much summed up by those in attendance when Governor Pat Quinn signed the bill on Feb. 23 at a Target store in Chicago’s south loop.
As the Gov. Quinn stepped up to the podium to face TV cameras, he was surrounded by dozens of retailers from some of Illinois’ finest stores. Standing closest to the Governor were Cook County State’s Attorney Anita Alvarez, and IRMA President & CEO David F. Vite.
When policy makers, law enforcement officials and retailers get together like this, it never turns out well for retail thieves.
Before officially signing legislation giving Illinois one of the toughest Organized Retail Crime laws in the nation, Quinn praised the law for its power to protect retail assets, save consumers money and improve the state’s economy.
“This important new law will help protect retailers and communities throughout Illinois from the economically damaging practices of organized retail crime,” Gov. Quinn said. “Organized crime, where large amounts of goods are stolen through fraud or thievery, can cost all of us a great deal of money. It costs our merchants, obviously, but it also costs our taxpayers in money that isn’t probably paid in sales tax.”
ORC costs Illinois retailers an estimated $1.5 billion in losses each year, meaning about $90 million in lost sales tax revenue for the state. And because the criminals re-sell stolen items such as over-the-counter medicine and baby formula, sometimes after expiration dates, consumer health and safety is compromised.
One example was fresh in the minds of Cook County officials. This past summer, a warehouse on the northwest side of Chicago used by an ORC ring was seized full of stolen goods and $4.5 million in cash. Alvarez said she was optimistic the new law would help fight such cases.
“We’re on the verge of a new, more coordinated crackdown. It’s being assisted by this new law,” she said.
The law was the culmination of work by the Cook County ORC Task Force which included IRMA, the Cook County State’s Attorney’s office, the Chicago Police Department, the Cook County Sheriff’s office, Cook County, local police departments in Cook County, many Cook County-based retailers, and Illinois Senator Iris Martinez (D-Chicago).
Tough new law will deter ORC in Illinois
Life just got a little tougher for those trying to make a living stealing from Illinois retailers.
The new Organized Retail Crime law signed by Illinois Governor Pat Quinn on Feb. 23 gives Illinois one of the toughest organized retail crime laws in the country. It sets ORC apart from other retail theft and includes tougher penalties designed to make criminals think twice before targeting stores in Illinois.
Illinois Gov. Pat Quinn signs the state's new Organized Retail Crime law on Feb. 23. To his left are IRMA Senior Counsel Tanya Triche and Cook County State's Attorney Anita Alvarez.
“This is a great bill and a great step forward,” IRMA President & CEO David F. Vite said. “It’s the toughest, most stringent, and most up-to-date law in the United States.”
The legislation greatly expands law enforcement’s ability to charge and prosecute the leaders of the extremely sophisticated rings of thieves who operate in multiple jurisdictions at once and steal hundreds of millions of dollars in goods nationwide. The goods are typically resold in fencing operations, either online or out of warehouses and at flea markets. Criminals use the money to buy drugs, guns and in some cases, to fund terrorism.
The law sets greater penalties for ORC. When a person commits felony retail theft for the purpose of re-selling the merchandise at least three times in an 18-month period, the crime is placed in the category of a Continuing Financial crimes Enterprise. And if a person agrees with another to commit three or more such crimes, that person will be considered an organizer of CFCE.
The big difference in upgrading the crime from felony retail theft to CFCE is that it allows for the forfeiture of assets purchased with money made from the crime. The forfeiture of assets represents a major step toward providing financial disincentive to ORC organizers and participants.
The new law also adds a provision so that in the case of a sting, the undercover officer only needs a reasonable belief the goods were stolen in order to charge a fencer with theft.
“This discourages thieves from looking at organized retail crime as a quick source of revenue,” Vite said.
Cook County Board to repeal remainder of infamous 2008 retail sales tax hike over next two years
Bit by bit, the Cook County sales tax rate is headed back to where it was before July 2008.
On Feb. 25, the Cook County Board voted to repeal the remaining half of the 1 percent increase imposed when former County Board President Todd Stroger was at the helm. The repeal follows a campaign promise by new Board President Toni Preckwinkle.
The action means the county sales tax rate will drop by a quarter cent on Jan. 1, 2012 and another quarter cent on Jan. 1, 2013.
In 2008, the County Board raised the rate from 0.75 percent to 1.75 percent. That action, combined with state and city sales tax rates, gave the City of Chicago a rate of 10.25 percent and the distinction of having the highest sales tax of any major city in the nation.
But in December 2009, the Cook County Board – after several attempts – was able to partially roll back the county’s rate to 1.25.
These rollbacks mean the City of Chicago’s tax rate will drop from 9.75 percent to 9.5 percent next January and down to 9.25 percent the following January, barring any other sales tax rate changes on the part of the city or the state.
One of the big criticisms of the higher tax rate was that it was regressive, impacting many inner-city residents who cannot afford to travel outside the county to shop. But the high tax rate also discouraged spending in Cook County, especially along its borders with DuPage, Lake, Kane and Will counties.
“The action by the Cook County Board will not only benefit shoppers, but retailers in Cook County,” IRMA President & CEO David F. Vite said. “It should also help the county’s economic development since the tax climate is one of the biggest variables a business considers when looking to expand or open new stores.”
Proposal calls for increase in Illinois minimum wage
A proposal introduced in Springfield to substantially increase the Illinois minimum wage and do so on an annual basis is a recipe for disaster for young people, employment, and economic development in general, IRMA President & CEO David F. Vite said.
“Illinois already has the highest minimum wage in the Midwest and the third highest in the nation,” Vite said. “In the last month, Illinoisans have witnessed a parade of Governor’s from other states trying to lure employers away from Illinois. This proposal helps them make their case.”
Senate Bill 1565 proposes increasing the Illinois minimum wage by 50 cents per hour plus any increase in the U.S. Consumer Price Index (CPI) until the Illinois minimum wage reaches the current value of $1.68 in 1968.
Additionally, the sponsors propose eliminating the training wage exemption and the teen wage exemption. The training wage allows employers to pay workers 50 cents less per hour for the first 90 days of their employment. The teen wage allows employers to do the same thing for workers under 18. However, if employers choose to use these exemptions, they may only use one.
“Faced with a higher hourly pay scale, employers across the state will have to consider freezing or reducing the number of employees on their payroll. At the levels envisioned by S.B. 1565, not only would teenagers face grimmer employment prospects than they do today, but less experienced or efficient workers will also be negatively impacted,” Vite said.
In 2003, eight short years ago, the Illinois minimum wage was $5.15 per hour, based on federal law. As the two charts below demonstrate, it has increased dramatically in a short period of time to its current level of $8.25 per hour. That represents an increase of more than 60.2 percent in eight years or 8.6 percent annually, on average.
“As Illinois’ teen unemployment numbers demonstrate, the wage increases Illinois has imposed on its employers, in addition to higher state and local taxes, are unsustainable. Something must give and, unfortunately, the most vulnerable workers in our state are paying the price of these artificially high wages,” said Vite.
In 2009, the unemployment rate among 16-19 year olds was 25.8 percent. In the City of Chicago the situation was even more desperate with a teenage unemployment rate of 48 percent – the highest unemployment rate recorded for Illinois teens since 1974.
In an attempt to address teen unemployment, the City of Chicago instituted the “Youth Ready Chicago” jobs program. The City recognized that jobs for teenagers are not just about saving for college and discretionary income; they also serve to keep children safe.
Sign up now for Retail Day
Retailers from across the state will gather in Springfield on Wednesday, May 4 for Retail Day 2011, an opportunity to learn about retail-related legislative issues first-hand and meet with state leaders at the Illinois Statehouse.
Retail Day 2011, part of the Business Day 2011 event, will be hosted by the Illinois Retail Merchants Association in conjunction with the Illinois Manufacturers’ Association at the President Abraham Lincoln Hotel and Conference Center in Springfield.
The program starts with a noon Luncheon at the President Abraham Lincoln Hotel and concludes with an evening reception offering live music, food and drink and a chance to meet casually with legislators and fellow business leaders.
To register for Retail Day, contact IRMA at 1-800-572-5044 or email dbasowski@irma.org. Individual registrations are $85 per person. Meeting and hotel registration deadline is Tuesday, April 12. A limited number of rooms are available at a group rate of $102.99 per night at the President Abraham Lincoln Hotel and Conference Center. Ask for group code “IRMA” and call 866/788-1860 for room reservations.
Jobs Creation Act amended
The Illinois Small Business Jobs Creation Tax Credit Act has been subject to several legislative amendments.
First, the basic wage for the program that must be met or exceeded has been reduced from $13.75 per hour to $10 per hour or the equivalent annual salary of $25,025 to $18,200.
Under the new program guidelines, if a position pays at least $10 per hour, or at least $18,200 annually and it meets additional program requirements, the position would be eligible for the credit. To apply for the credit under the new guidelines, visit http://jobstaxcredit.illinois.gov.
The other amendment deals with employers who hire a former 2010 worker-trainee of the “Put Illinois to Work” program. Employers of any size who hire such a worker-trainee for a full-tie position by June 30, 2011, would be eligible to participate in the Illinois Small Business Jobs Creation Tax Credit Program.
For more information, contact jobstaxcreditprogram@illinois.gov.
NRF: More will use tax refunds on big-ticket items
More consumers will use their tax refunds to purchase a big-ticket item this year, according to a survey by the National Retail Federation.
The NRF’s 2011 Tax Returns Consumer Intentions and Actions Survey showed that 13.2 percent of Americans will spend refunds on a big-ticket item, up from just 12.5 percent last year. More people will also put their funds away for a rainy day (42.1 percent compared to 40.3 percent a year ago).
The survey showed that nearly 64 percent of Americans will have filed their taxes by the end of February and that more than 66 percent of taxpayers are expecting a refund this year, up from 65.5 percent last year.
