This Week in Springfield – 100-27

In This Issue:

RETAIL THEFT
RESTRICTIVE SCHEDULING
BIPA
REBATE CARDS
TELECOMMUNICATIONS

This Week in Springfield, the Assembly reached its first committee deadline. Any legislation that does not have its final consideration deadline extended will be considered ‘held’ for the year. However, the same idea could make its way back into consideration as an amendment on another bill.  This is always a very active week in the Assembly and this time was no exception. 

RETAIL THEFT

 HB 3337 (Rep. Justin Slaughter, D-Chicago)/ SB 3257 (Sen. Elgie Sims, D-Chicago) seeks to increase the retail theft felony threshold from $300 to $2000—which would give Illinois the second highest felony threshold in the nation.  Currently, Chicago alone accounts for more property theft related offenses than 20 individual states and Illinois ranks 7th as a whole.  As a consequence to theft issues, a group of Chicago retailers recently hired private security to patrol the neighborhood around their stores. HB 3337 also allows criminals with prior felony robbery, armed robbery, burglary and residential burglary convictions to repeatedly steal $1,999 of property from a private individual and only be charged with a misdemeanor.

The advocates argue that increasing the retail theft threshold will keep people out of state prisons but admit it will shift costs to counties and municipalities. This cost shift was borne out by the experience of the State of California who increased their retail felony threshold to $950 – less than half of what is being proposed in Illinois.  A year after the increase, the California Assembly had to appropriate $270 million more to local governments to partially offset the cost-shift. But it is not just the cost-shift that hits local governments, it is also the loss of tax revenue from theft. For instance, reports estimate that U.S. retailers lose $60 billion worth of goods due to retail theft annually.  Illinois accounts for at least 3.4% (based on population) of that total which is over $2 billion worth of goods a year. This costs the state a minimum of $100 million in lost sales tax revenue and local governments a minimum of $25 million in lost sales tax revenue just based on their local share of the state sales tax. The loss is higher for local governments that impose their own sales tax. These numbers are extraordinarily conservative as they only take into account people actually apprehended and do not take into account the documented fact that shoplifters steal dozens of times before getting caught.

Proponents have claimed that ‘larceny’ has not increased in states where the felony retail theft threshold is increased. Larceny is a bucket of a number of criminal offenses. When the correct comparison is made – retail theft – the FBI’s numbers tell a different story. FBI statistics show that retail theft in the U.S. has increased 10% since 2010 and the value of the items stolen has increased 25% over that same time period as states have increased the retail theft threshold.  Lawmakers need look no further than the changes California made just three years ago. According to FBI statistics, property crimes in California increased 8% while theft related crimes increased 11%. Locally, of the 66 California cities that the FBI number included, 49 experienced an overall increase in property theft with 24 experiencing double-digit increases. Moreover, at the end of the year, five California cities were ranked in the top 10 for the largest property theft increases in the U.S. Additionally, the Los Angeles Police Department reported retail theft increased 25%.

There is an additional myth that retail thieves are harmless. The Illinois Sentencing Policy Advisory Council’s (SPAC) own statistics conclude that the average retail offender has seven previous felony convictions and 13 previous misdemeanor convictions. Any suggestion that retail theft is committed solely by first time offenders or harmless individuals is simply incorrect. Nevertheless, IRMA was the first business group to support legislation that allowed for expungement and sealing of criminal records and has consistently done so since. IRMA also worked with Cook County Sherriff Tom Dart’s office to pass the Accelerated Resolution Court Act or ‘Rocket Docket’ in 2015 which requires that persons charged with misdemeanor retail theft be released without having to pay bail while they await trial. Therefore, if anyone is sitting in prison, it is not because of retail theft.

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RESTRICTIVE SCHEDULING

 A subject matter hearing on the restrictive scheduling mandate was held this week in the House Labor and Commerce Committee at which IRMA testified in opposition. As introduced, HB 5046 (Rep. Chris Welch, D-Westchester) would, among other provisions, 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. Over 40 different industry partners which include but are not limited to, retail, agriculture, accounting, manufacturing, energy, security, education, automotive, distribution, construction, hospitality, law enforcement, et., all oppose a restrictive scheduling mandate that negatively impacts employers and employees.

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. can schedule or operate in the exact same manner.  Different employers have unique business, employee, and regulatory variables to consider when providing schedules that promote and support their employees while still allowing the business providing the jobs to operate effectively and efficiently. HB 5046 undermines the ability of each employer 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, employers 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. These mandates (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.

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.

As introduced, HB 5046 takes away the flexibility employees specifically seek and makes it far more difficult for employers to ensure they are properly staffed.

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BIPA

SB 3053 SA#2 (Sen. Bill Cunningham, D-Chicago) seeks to modernize Illinois’s excessively restrictive BIPA to reflect technological changes and a modern understanding of privacy that did not exist when BIPA was initially enacted. When BIPA was drafted in 2008, biometrics were just beginning to emerge and there was little understanding of a balance between privacy versus constructive uses. However, significant advancements in how to use such technology constructively necessitates a modernization of Illinois’ SB 3053 common sense changes will continue the protections that BIPA was intended to provide, while also unlocking new and valuable technological developments that do not implicate BIPA’s core purposes of prohibiting using such information for marketing and selling.

Current Illinois law endangers Illinois citizens by inhibiting the ability of places utilized by the public to use the latest technology to protect their customers, employees, and goods. Illinois law only allows the use of biometric screening technology if the individual gives their consent in advance.  Domestic violence abusers, human traffickers, kidnappers, thieves, etc. will not consent to the use of their biometrics.  Missing children, senior citizens, and trafficking victims cannot consent to the use of their biometrics.

SA#2 to SB 3053 also allows employer to use biometrics for internal purposes such as timekeeping, payroll, entry/exit, cash register security, Rx counseling compliance, etc. Under current law if employers utilize biometric data to comply with laws or employment policies they cannot do so unless every employee consents. This means if a single employee withholds consent, the employer must either scrap the more efficient and secure system, utilize multiple systems based on each individual employee’s preference. This endangers compliance which puts the employer, and in some settings consumers, at risk.  While enhancing protection, compliance, and efficiency, private entities would still be prohibited from selling, leasing, or trading biometric information.

SA#2 to SB 3053 maintains the prohibition on the use of biometrics for a commercial purpose.  This proposal would not gut the privacy protections under the Act for commercial purposes, nor does it remove the private right of action or damages that may be awarded.  This proposal simply exempts private entities from the Act for internal employment/compliance and security purposes as long as the private entity is not using the information for commercial purposes.  SB 3053 maintains the prohibition on the use of biometrics for a commercial purpose.

SB 3053 was not heard this week while education and discussions continue.

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 REBATE CARDS

 The Illinois Treasurer’s Office has introduced SB 3102 (Sen. Cristina Castro, D-Elgin)/HB 4922 (Rep. Theresa Mah, D-Chicago) which is intended to prohibit the issuance of rebate cards that charge dormancy or other post-issuance fees.  The initiative only applies to rebate cards that can be used at multiple merchants. It exempts those closed-looped merchant cards that are distributed and used at one retailer. Senate Amendment #1 was adopted in committee providing clear guidance that SB 3102 would only apply to multi-store cards utilized for rebates. IRMA is neutral and appreciates the cooperation of Treasurer Frerichs, Senator Castro, and Representative Mah.

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TELECOMMUNICTIONS

Governor Rauner signed into law SB 1451 (Sen. Terry Link, D-Gurnee /Rep. Kelly Burke, D- Oak Lawn) paving the way for modernization of Illinois’s telecommunications infrastructure. This legislation positions Illinois to catch-up with twelve other states in terms of full-deployment of 5G and other telecommunications system/features. Given the fact retailers are 100% consumer facing and consumers expect and demand highly customized offerings with rapid delivery, a comprehensive and responsive telecommunications infrastructure is essential. As an early and avid supporter of SB 1451, IRMA would like to thank Sen. Link and Rep. Burke for their sponsorship, the members of the Assembly who voted in favor, and Governor Bruce Rauner for signing the bill into law.

This Week in Springfield 100-26

 PRIMARY ELECTION 2018

 

The most expensive gubernatorial primary election in the history of Illinois is in the books and the stage is set for what will likely be the most expensive gubernatorial election in the history of the United States.

 

Incumbent Governor Bruce Rauner (R) narrowly overcame a challenge from under-funded and little known State Representative Jeanne Ives (R- Wheaton) despite outspending Ives at least 10-1. Ives’s challenge was fueled, in part, by the Governor’s signing of an abortion-related bill that offended a portion of the Republican base. The race narrowed late forcing the Governor to veto a gun-control bill he likely would have preferred to not act upon until after the primary and switch his advertising from attacking the eventual Democrat nominee to attacking Ives. The question will be whether or not the Governor can quickly heal the divisions within the Republican Party and bring a united front into the November general election.

 

On the Democrat side, billionaire JB Pritzker easily bested a crowded field taking an impressive 45% of the vote in a six-person field to become the Democrat nominee for Governor. Should he and his family decide to do so, they will be more than able to match Governor Rauner and his allies dollar-for-dollar while also investing money in down-ballot races. That will allow the Democrats to focus the resources of their deep-pocketed allies solely on legislative races where their priority will be re-establishing a super-majority in the House. This is an important Democrat goal for two reasons. First, it would allow the Democrats to ignore Governor Rauner should he win re-election. Second, it ensures the Democrats will be able to draw the new legislative districts in which candidates will run in the 2022 election.

 

The respective acceptance speeches of the gubernatorial candidates highlighted the general approaches they will take for the general election. Pritzker spoke of a $15 minimum wage, government-provided health insurance, and additional advantages for unions among other topics. Rauner’s acceptance speech remained focused on his four-year-long theme of House Speaker Michael Madigan and unspecified corruption.

 

In the races to decide who will represent their parties in the race for Attorney General, State Senator Kwame Raoul (D- Chicago) narrowly beat former Governor and perennial candidate Pat Quinn while Erika Harold (R-Champaign) captured the Republican nomination. This will set-up a general election race between two African-American candidates for the right to succeed retiring Attorney General Lisa Madigan.

 

Farther down the ballot, incumbents on each side of the political aisle lost. On the Democrat side, State Senator Ira Silverstein (D- Chicago) lost after a sexual harassment claim made him the early poster-child of the Illinois #metoo movement and Assistant House Majority Leader Dan Burke (D-Chicago), who has served in the Illinois House since 1991, lost his primary to a far-left candidate. Rep. Burke is the brother of Alderman Ed Burke and his loss is likely a precursor to an effort by far-left elements of the Democrat Party in Chicago to try and unseat Alderman Burke next year. Additionally, Republican state Representative Dan Reis (R- Willow Hill) lost his primary.

 

In Cook County one of the most out-spoken critics of the now-repealed sweetened beverage tax, Commissioner John Fritchey (D) lost his re-election bid while Commissioner Richard Boykin’s (D) race was too-close-to-call. Some will spin this as a blow for those who voted for repeal of the sweetened beverage tax but it was really about the battle for the heart-and-soul of the Democrat Party. Additionally, Cook County Assessor and Chairman of the Cook County Democrat Party, Joe Berrios, lost his re-election bid amidst controversy over assessments and conflicts of interest.

 

As we go into the general election, the Democrats have clear momentum realizing a 200% increase in primary turnout over 2014 while the Republican primary turnout was only 70% of 2014. It’s going to be a long, nasty election season starting tomorrow. We can expect a non-stop campaign.

Executive Branch

Governor & Lt. Governor2

Attorney General

Secretary of State

Comptroller

Treasurer

DEMOCRAT

JB Pritzker (Chicago)

Kwame Raoul (Chicago)

(I) Jesse White (Chicago)

(I)x Susana Mendoza (Chicago)

(I)x Michael Frerichs (Champaign)

REPUBLICAN

(I) Bruce Rauner (Winnetka)

Erika Harold (Urbana)

Jason Helland (Mazon)

x Darlene Senger (Naperville)

x Jim Dodge (Orland Park)

U.S. Congress

DISTRICT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

DEMOCRAT

(I)x Bobby Rush (Chicago)

(I)x Robin Kelly (Chicago)

(I) Daniel Lipinski (Chicago)

Jesus “Chuy” Garcia (Chicago)

(I)Mike Quigley (Chicago)

Kelly Mazeski (Barrinton Hills)

(I) Danny Davis (Chicago)

(I)x Raja Krishnamoorthi (Schaumburg)

(I)x Janice D. Schakowsky (Evanston)

(I)x Brad Schneider (Deerfield)

(I)x Bill Foster (Naperville)

Brendan Kelly (Swansea)

Betsey Dirksen Londrigan (Springfield)

Lauren Underwood (Naperville)

Kevin Gaither (Charleston)

Sara Dady (Rockford)

(I)x Cheri Bustos (East Moline)

Darrel Miller (Danvers)

REPUBLICAN

x Jimmy Lee Tillman, II (Chicago)

David Merkle (Bourbonnais)

x Arthur Jones (Lyons)

Ruben Sanchez Jr. (Chicago)

x Tom Hanson (Chicago)

(I)x Peter Roskam (Wheaton)

Craig Cameron (Chicago)

Jitendra Diganvker (Schaumburg

John Elleson (Arlington Heights)

Douglas Bennett (Deerfield)

Nick Stella (Darien)

(I) Mike Bost (Murphysboro)

(I)x Rodney Davis (Taylorville)

(I)x Randy M. Hultgren (Winfield)

(I)x John M. Shimkus (Collinsville)

(I) Adam Kinzinger (Channahon)

Williams Fawell (Galena)

(I) Darin LaHood (Peoria)

Illinois State Senate

DISTRICT

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29

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35

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42

44

45

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48

50

51

53

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56

57

59

DEMOCRAT

(I)x Omar Aquino (Chicago)

(I)x Mattie Hunter (Chicago)

(I)x Patricia Van Pelt Watkins (Chicago)

(I)x John Cullerton (Chicago)

(I) Ira Silverstein (Chicago)

(I)x Laura Fine (Chicago)

(I)x Martin Sandoval (Chicago)

(I)x Steven Landek (Chicago)

(I)x Emil Jones III (Chicago)

(I)x Napoleon Harris (Chicago)

(I)x Elgie Sims (Chicago)

(I)x Bill Cunningham (Tinley Park)

(I) Iris Martinez (Chicago)

x Laura Ellman (Naperville)

(I)x Thomas Cullerton (Villa Park)

x Suzanne Glowiak (Western Springs)

x Tom Georges (Mundelein)

Ann Gillespie (Arlington Heights)

(I)x Julie Morrison (Deerfield)

(I)x Terry Link (Vernon Hills)

x Mary Mahady (McHenry)

x Nancy Zettler (Algonquin)

No candidate

x Gregg Johnson (East Moline)

x Heidi Henry (Marseilles)

(I)x Don Harmon

x Bridget Fitzgerald (Western Springs)

(I)x Linda Holmes (Aurora)

No candidate

x David Simpson (Shabbona)

No candidate

(I)x Andy Manar (Bunker Hill)

No candidate

No candidate

No candidate

No candidate

x Rachelle Aud-Crowe (Glen carbon)

x Christopher Belt (Cahokia)

No candidate

REPUBLICAN

No candidate

No candidate

No candidate

No candidate

No candidate

x Joan McCarthy-Lasonde (Chicago)

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

(I)x Michael Connelly (Lisle)

x Seth Lewis (Bartlett)

(I)x Chris Nybo (Elmhurst)

(I)x Dan McConchi (Hawthorn Woods)

(I)x Tom Rooney (Rolling Meadows)

x Barrett Davie (Lake Forest)

x Soojae Lee (Buffalo Grove)

x Craig Wilcox (McHenry)

(I)x Karen McConnaughay (St. Charles)

(I)x Dave Syverson (Rockford)

(I)x Neil Anderson (Andalusia)

(I)x Sue Rezin (Morris)

No candidate

(I)x John Curran (Downers Grove)

No candidate

(I)x Bill Brady (Bloomington)

(I)x Brian Stewart (Freeport)

(I)x Jil Tracy(Quincy)

x Seth McMillan (Taylorville)

(I)x Steve McClure (Springfield)

(I)x Chapin Rose (Mahomet)

(I)x Jason Barickman (Bloomington)

Jason Plummer (Edwardsvlle)

x Hal Patton (Edwardsville)

Tanya Hildenbrand (Belleville)

(I)x Dale Fowler (Harrisburg)

Illinois House of Representatives

DISTRICT

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2

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5

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38

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41

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49

50

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53

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56

57

58

59

60

61

62

63

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66

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68

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98

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100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

DEMOCRAT

Aaron Ortiz (Chicago)

(I)x Theresa Mah (Chicago)

(I)x Luis Arroyo (Chicago)

Delia Ramirez (Chicago)

Lamont Robinson(Chicago)

(I)x Sonya Harper (Chicago)

(I)x Chris Welch (Hillside)

(I)x La Shawn K. Ford (Chicago)

(I)x Arthur Turner (Chicago)

(I)x Melissa Conyears (Chicago)

(I)x Ann Williams (Chicago)

(I)x Sara Feigenholtz (Chicago)

(I)x Gregory Harris (Chicago)

(I) Kelly M. Cassidy (Chicago)

(I)x John C. D’Amico (Chicago)

(I)x Lou Lang (Skokie)

Jennifer Gong-Gershowitz (Glenview)

(I)x Robyn Gabel (Evanston)

(I)x Robert F. Martwick, Jr. (Chicago)

x Merry Marwig (Chicago)

(I)x Silvana Tabares (Chicago)

(I)x Michael J. Madigan (Chicago)

(I)x Michael J. Zalewski (Riverside)

(I) Elizabeth “Lisa” Hernandez (Cicero)

Curtis Tarver II (Chicago)

(I)x Christian Mitchell (Chicago)

(I) Justin Slaughter (Chicago)

(I) Robert Rita (Blue Island)

(I)Thaddeus Jones (Calumet City)

(I)x William “Will” Davis (Homewood)

(I) Mary E. Flowers (Chicago)

(I)x André Thapedi (Chicago)

(I)x Marcus Evans, Jr. (Chicago)

(I)x Elgie Sims (Chicago)*

(I)x Frances Ann Hurley (Chicago)

(I)x Kelly M. Burke (Evergreen Park)

x Matthew Hunt (Frankfort)

Debbie Meyers-Martin (Olympia Fields)

(I)x Will Guzzardi (Chicago)

(I)x Jaime Andrade, Jr. (Chicago)

x Val Montgomery (Naperville)

x Kathleen Carrier (Carol Stream)

(I)xAnna Moeller (Elgin)

(I)x Fred Crespo (Hoffman Estates)

x Cynthia Borbas (Carol Stream)

(I)x Deborah O’Keefe Conroy (Elmhurst)

James M. Caffrey (Elmhurst)

x Terra Howard (Glen Ellyn)

x Karina Villa (West Chicago)

x James Leslie (Aurora)

No candidate

No candidate

x Mark Walker (Arlington Heights)

x Maggie Trevor (Rolling Meadows)

(I)x Martin Moylan (Des Plaines)

(I)x Michelle Mussman (Schaumburg)

(I)x Johnathan Carroll

x Bob Morgan (Deerfield)

Daniel Dideck (Buffalo Grove)

(I)x Rita Mayfield (Waukegan)

x Joyce Mason (Gurnee)

(I)x Sam Yingling (Round Lake Beach)

No candidate

No candidate

x Richard Johnson (Elgin)

No candidate

Maurice West (Rockford)

x Jake Castanza (Rockford)

x Angelique Bodine (Poplar Grove)

Paul Stoddard (DeKalb)

x Joan Padilla (Sterling)

(I)x Michael Halpin (Rock Island)

No candidate

No candidate

No candidate

Lance Yednock (Ottawa)

(I)x Kathleen Willis (Addison)

(I)x Camille Y. Lilly (Chicago)

x Lisa Dugan (Bradley)

(I)x Anthony DeLuca (Chicago Heights)

x Anne Stava-Murray (Naperville)

x Tom Chlystek (Darien)

(I)x Linda Chapa LaVia (Aurora)

(I)x Stephanie Kifowit (Aurora)

(I)x John Connor (Romeoville)

(I)x Lawrence Walsh, Jr. (Elwood)

No candidate

x Jill Blair (Bloomington)

x Nicholas Hyde (Galena)

x Amy Davis (Dixon)

x Carolyn Blodgett (Canton)

(I)x Jehan Gordon-Booth (Peoria)

x John Curtis (Macomb)

No candidate

x Dillon Clark (Litchfield)

(I)x Sue Sherer (Decatur)

x Mica Freeman (Plainfield)

(I)x Natalie Manley (Joliet)

x Mark Bell (Springfield)

No candidate

x Jennifer McMillin (Decatur)

No candidate

(I)x Carol Ammons (Urbana)

Cynthia Cunningham (Saint Joseph)

x Benjamin Webb (Normal)

No candidate

x David Seller (Effingham)

No candidate

x Cynthia Given (Olney)

x Shirley Bell (Mattoon)

x Monica Bristow (Godfrey)

(I)x Katie Stuart (Edwardsville)

(I)x Jay Hoffman (Collinsville)

(I)x LaToya Greenwood (East St. Louis)

Tamiko Mueller (Murphysboro)

(I)x Jerry Costello II (Smithton)

x Jason Woolard

(I)x Natalie Phelps Finnie (Harrisburg)

REPUBLICAN

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

x Amanda Biela (Chicago)

No candidate

x Peter Lee (Wilmette)

x Julie Cho (Wilmette)

x Ammie Kessem (Chicago)

(I)x Michael P. McAuliffe (Chicago)

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

No candidate

x Herbert Hebein (Chicago)

No candidate

(I)x Margo McDermed (Mokena)

No candidate

No candidate

No candidate

(I)x Grant Wehrli (Naperville)

Amy Grant (Wheaton)

x Andrew Cumming (Elgin)

x Katy Dolan Baumer (Streamwood)

(I)x Christine Winger (Wood Dale)

Jay Kinzler (Glen Ellyn)

x Deanne Mazzochi (Elmhurst)

(I)x Peter Breen (Glen Ellyn)

Tonia Jane Khouri (Aurora)

(I)x Keith Wheeler (Oswego)

(I)x Nick Sauer (Libertyville)

(I)x David McSweeney (Barrington Hills)

Eddie Corrigan (Arlington Heights)

(I)x Tom Morrison (Palatine)

x Marilyn Smolenski (Park Ridge)

Jillian Rose Bernas (Schaumburg)

x Mary Battinus (Buffalo Grove)

x Cindy Masover (Highland Park)

Karen Feldman (Lincolnshire)

No candidate

(I)x Sheri Jesiel (Winthrop Harbor)

Ken Idstein (Grays Lake)

(I)x Steven Reick (Harvard)

x Tom Weber (Lake Villa)

x Dan Ugaste (Geneva)

(I)x Allen Skillicorn (East Dundee)

No candidate

(I)x John Cabello (Machesney Park)

(I)x Joe Sosnowski (Rockford)

x Jeff Keicher (Sycamore)

(I)x Tony McCombie (Savanna)

x Brandi McGuire (Milan)

(I)x Ryan Spain (Peoria)

(I) xDaniel Swanson (Alpha)

(I)x David Welter (Morris)

(I)x Jerry Long (Streator)

x Anthony Airdo (Melrose Park)

No candidate

(I)x Lindsay Parkhurst (Kankakee)

No candidate

(I)x David Olsen (Downers Grove)

(I) Jim Durkin (Western Springs)

No candidate

x Patty Smith (Aurora)

x Lisa Bickus (Lockport)

x Rick Laib (Joliet)

(I)x Tim Butler (Springfield)

(I)x Keith P. Sommer (Morton)

Andrew Chesney (Freeport)

(I)x Tom Demmer (Dixon)

(I)x Michael D. Unes (East Peoria)

No candidate

(I)x Norine K. Hammond (Macomb)

(I)x Randy Frese (Paloma)

(I)Avery Bourne (Raymond)

x Senor Herman (Springfield)

(I)x Mark Batinick (Plainfield)

x Alyssia Benford (Bolingbrook)

x Mike Murphy (Springfield)

(I) CD Davidsmeyer (Jacksonville)

Dan Caulkins (Decatur)

(I)x Brad Halbrook (Shelbyville)

No candidate

x Mike Marron (Fithian

(I)x Dan Brady (Bloomington)

(I)x Thomas Bennett (Gibson City)

Blaine Wilhour (Beecher City)

(I) Charles Meier (Okawville)

Darren Bailey (Xenia)

Chris Miller (Oakand)

x Mike Babcock (Bethalto)

Dwight Kay (Glen Carbon)

x Doug Jameson (Belleville)

x Jason Madlock (Centreville)

(I)x Terri Bryant(Murphysboro)

x David Friess (Red Bud)

(I)x Dave Severin (Benton)

x Patrick Windhorst (Metropolis)

(I) indicates incumbent

x indicates was not contested in primary

* Rep Sims was appointed to fill a vacancy in the State Senate after the deadline to replace a candidate on the ballot. He will eventually be replaced by the Democrat Party.

Business Day

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!

 

This Week in Springfield – 100-25

RESTRICTIVE SCHEDULING
SALES TAX CONFIDENTIALITY & RESPONSIBILITY
STATE WORKERS’ COMPENSATION PROGRAM

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.

RESTRICTIVE SCHEDULING

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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SALES TAX CONFIDENTIALITY & RESPONSIBILITY

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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STATE WORKERS’ COMPENSATION PROGRAM

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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This Week in Springfield – 100-24

March 2, 2018

IN THIS ISSUE:

MARKETPLACE FAIRNESS
TAX ABUSE
PRE-JUDGEMENT WAGE LIENS
ATTORNEY GENERAL WORKER PROTECTION UNIT
PAY HISTORY COMPROMISE REMAINS ELUSIVE
MARIJUANA REFERENDUM PASSES SENATE
EMPLOYER RELOCATION PENALTIES
BUSINESS DAY SPEAKER

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

MARKETPLACE FAIRNESS

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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TAX ABUSE

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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PRE-JUDGEMENT WAGE LIENS

 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

ATTORNEY GENERAL WORKER PROTECTION UNIT

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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PAY HISTORY COMPROMISE REMAINS ELUSIVE

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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MARIJUANA REFERENDUM PASSES SENATE

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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EMPLOYER RELOCATION PENALTIES

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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BUSINESS DAY SPEAKER

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

GOVERNOR’S BUDGET ADDRESS

 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.

BUSINESS DAY SPEAKER

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