Retail Register No. 362 , March 2016

IN THIS ISSUE

ILLINOIS TELEHEALTH EVENT
EXCLUSIVE MEMBER DISCOUNT ON UNEMPLOYMENT INSURANCE
CHICAGO’S PLASTIC BAG BAN
RETAIL REGISTER GOES DIGITAL
LEGISLATIVE SESSION KICKS OFF
BUSINESS DAY 2016
CHICAGO’S TOBACCO TAX
RETAILERS’ SHARE OF A DOLLAR

Illinois Telehealth Event Series

Employers are increasingly offering employees access to care via telehealth technologies as a strategy to improve employee health, performance and decrease costs.  Employers who plan to, or currently offer employees access to telehealth services need to be aware of: (1) the potential legal issues implicated by the offering of these services as part of an employer sponsored health plan, wellness program, or employee assistance program; and, (2) the various legal and regulatory requirements that govern telemedicine providers (which is necessary to enable an employer to make an informed decision about the telemedicine provider with whom they choose to partner).

The Illinois Telehealth Initiative invites you to the inaugural Illinois Telehealth Law Forum-a three-part series examining the telehealth landscape in Illinois and the broader Midwest. Each of the three forums will provide excellent educational and networking opportunities for anyone interested or engaged in telehealth. The first forum-to be held on April 6, 2016-will include interactive panel discussions on the current legal and regulatory environment, reimbursement trends and opportunities, as well as telemedicine delivery and business models with particular attention paid to the concerns of the healthcare provider community. The second and third forums will build on these prior discussions and will address other emerging topics with enhanced focus on the perspectives of public and private payers, along with telehealth entrepreneurs and service providers.

For more information on the event, or to register, please visit

www.broadbandillinois.org/forums.

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Exclusive Member Discount on Unemployment Insurance Services

In 2015, the Joint Employers, a coalition of employer representatives led by IRMA, succeeded in obtaining significant changes to Illinois’ Unemployment Insurance Act on behalf of employers. These reforms should save Illinois employers millions of dollars in unemployment insurance taxes and offset any increase that may be felt as a result of the elimination of the social security offset. On March 9, IRMA hosted a free webinar to educate IRMA members on the misconduct changes, led by Carol Gabrielsen of Unemployment Insurance Consultants, Inc. Because of the tremendous positive feedback on Carol’s webinar presentation, IRMA has decided to continue partnering with Unemployment Consultants, Inc. to offer IRMA members additional support. All IRMA members will receive 10% off Unemployment Consultants, Inc. services. For additional information on services provided, please contact Carol directly at 847-670-0590 or visit www.unemploymentconsultantsinc.com.

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Seven Month Review of Chicago’s Plastic Bag Ban

To put it lightly, Chicago’s “ban” on plastic bags is a disaster.  Sold as a ban on all plastic bags, the ordinance banned thin plastic bags which led to the proliferation of bags that use more energy to produce and contain more plastic.  To add insult to injury, the ban imposed increased costs to retailers and increased the use of paper bags which, again, use more energy to produce and are harder on the environment.  This is a confounding, but predictable result of misguided rules.  In advance of the next round of this “ban” which goes into effect on August 1, 2016, for certain retailers smaller than 10,000 sq. ft., it’s time for Chicago to promote thoughtful policies that change behavior and protect businesses in the process.

Over 100 cities in California and Washington, D.C. have implemented single-use bag fees and there is evidence the laws have been successful in changing consumer behavior.  The cities of San Jose, Palo Alto and San Francisco, as well as Washington, D.C., have all noted decreased single-bag use and increased numbers of people bringing their own bags.

We also know that when plastic bags are banned, customers just move to the next least expensive option, which is usually a free paper bag.  That is what happened in San Francisco, which originally passed a plastic bag ban to encourage residents to use their own bags, and instead, they found customers increased their use of free paper bags and reusable bag use stagnated.  The city implemented a $.10 fee on all single-use bags in 2012 and have since seen a drop in the use of single-use bags and an increase in residents either not taking a bag at all, or using reusable bags.  Because the data proves that mandated fees change consumer behavior, Chicago should consider this option.

We can all agree the current “ban” on plastic bags isn’t serving the environment well, has driven up costs for retailers, and has customers scratching their heads as they carry their groceries home in thicker plastic bags.  Chicago’s elected officials should repeal the current law and replace it with a common sense environmental policy that encourages customers to change their behavior, relieves the financial burden on the retail community, and actually does some good for the environment.

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The Retail Register  Goes Digital

Beginning with the next issue in June, the Retail Register will only be distributed via email. We hope you will find this method of distribution to be more convenient and valuable. IRMA will continue to publish the Retail Register four times throughout the year. This members-only publication will continue to focus on retail trends, hot topics, and upcoming events.

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2016 Legislative Session Kicks off in Springfield 

slide_flag32016 is shaping up to be a year filled with uncertainty – at least in Illinois. Not only does an election for US President, US Senate and Congress, 118 Illinois House seats, and 2/3rds of the Illinois Senate loom in November, but a continuing budget impasse has Springfield in gridlock, the City of Chicago is in financial disarray and looking to shift even more costs to employers, and a potential strike looms for Chicago Public Schools – the largest public school system in the state. This puts several retail issues in the spotlight, including, but not limited to, vendor collection allowances, employer mandates, egg lot consolidation and the sales tax on feminine hygiene products.

Vendor Collection Allowances

Due to the budget impasse, lawmakers are looking for new revenue streams. Legislation has been filed seeking to impose over $2 billion in tax increases, primarily on Illinois employers, which includes reducing the vendor collection allowance. This allowance is supposed to serve as a reimbursement for the expenses incurred from the collection of sales tax on behalf of the state and local government. As IRMA has repeatedly demonstrated, Illinois retailers significantly underwrite the collection of taxes on behalf of state and local governments and the current vendor allowance covers less than half of that cost. IRMA is working to protect the partial reimbursement retailers receive through this allowance.

Employer Mandates

Labor policy mandates continue to be a hot topic in state government and in the City of Chicago. Several states have passed a patchwork of employer mandates that include minimum wage and paid sick leave ordinances. Illinois has not been immune to this wave of mandates as the City of Chicago recently passed a minimum wage ordinance and created a Working Family Working Group to provide suggestions to the mayor regarding paid leave. Additionally, proponents are advocating for a statewide minimum wage law and additional paid leave mandates. IRMA understands these policies will hurt employers of all sizes and negatively impact job growth throughout Illinois.

Egg Lot Consolidation

IRMA is championing an initiative to modernize Illinois’ egg laws, which would include extending the current 30 day sell/use date for eggs to 45 days. Sponsored by State Representative Elaine Nekritz (D IL-57), HB 6287 also calls for an egg consolidation program that will allow retailers to remove a damaged egg from a carton and replace it with an egg from the same brand that is inspected, graded, sized and dated at the same time within the same lot, rather than throw away the whole carton as currently required under Illinois law. Egg lot consolidation is used in 41 states and approved by the United States Department of Agriculture (USDA) and significantly reduces waste. SB 3167, introduced by State Senator John Mulroe (D IL-10), is the companion bill in the Senate.

Tax on Feminine Hygiene Products

Following a similar precedent set by a sales tax-exemption on prescription medicines, SB 2746, introduced by State Senator Melinda Bush (D IL-31), would establish a similar sales tax-exemption status on all feminine hygiene products, incontinence products and infant diapers. IRMA is taking a neutral position on this issue so long as legislation does not create a different rate for these products. Similar proposals (targeted solely to feminine hygiene products) have been introduced in the City of Chicago and Cook County despite the fact that under state law local taxing jurisdictions do not have the authority to change the state’s base or rate designations.

IRMA will continue to take an active role advocating for retailers throughout the state as the legislative session moves forward.

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Please Join Us for Business Day 2016

Business Day 2016’s opening luncheon, starting at noon on May 11th, will feature keynote speaker Amy Walter, one of the best known political journalists and national editor of the Cook Political Report.

Following the luncheon, please plan on joining employers from across the state in visiting the Illinois State Capitol to meet with policymakers.  This year’s Party Under the Tent will begin at 5:00 p.m. near the IRMA office and will feature a Grateful Dead cover band.

For additional information, or to register for the event, please visit complete the online form or call 312-726-4600. Last year over 400 employers attended. We hope to see you there!

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Chicago’s Tax on Tobacco Drives Out Businesses & Hurts Retailers 

The Illinois Retail Merchants Association (IRMA), through its subsidiary the Chicago Retail Merchants Association (CRMA), joined retailers and community leaders to oppose the City of Chicago’s unprecedented attempts to set minimum prices on tobacco products and mandate packaging mandates. Paired with additional taxes on cigars and smokeless tobacco, this mandate will raise $6 million in additional tax revenue for the city and will be the latest hit to Chicago retailers during a time when they are already under persistent assault from additional taxes and product restrictions imposed by the city.

The business community in Chicago has been burdened with a number of tax increases and new regulations over the past two years. At the start of 2016, Cook County had the highest sales tax in the country and the City of Chicago instituted a record setting property tax increase. This tobacco tax is just the latest instance of businesses being unfairly targeted. The burden these policies have on retailers, their employees, and their consumers all too often have resulted in businesses leaving the city, especially those near the suburban and Indiana borders.

Last month, IRMA took a stand against this unprecedented overreach into the free market.  During a press conference at City Hall, IRMA was joined by retailers, aldermen and pastors from Chicago’s neighborhoods who understand this tax policy carries enormous consequences including fewer jobs, more crime, and a further lack of opportunity in neighborhoods where it’s desperately needed.

IRMA is dedicated to keeping retail jobs and sales in Illinois. Frustrated aldermen have seen consumers increasingly stream into Indiana and the suburbs because of Chicago’s significant tax and regulatory structure. When consumers buy tobacco products in Indiana, Chicago’s businesses lose out on the associated sale of beverages, snacks and other items. Ultimately, losing customer purchasing power results in fewer stores and fewer jobs.

Chicago cannot afford to continue to push through taxes and regulations that will hurt retailers and the neighborhoods they serve. IRMA will continue to fight to protect the investment employers and their employees have made in the city.

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Retailers’ Share of a Dollar

http://retailers2cents.com/ For every $1 spent in an Illinois retail establishment, only about $.02 results in profit, holding true for grocery stores and gas stations, to pharmacies and hardware stores. For Illinois retailers, that $.02 profit margin seems to be regularly under assault – it gets stretched, and then stretched some more with the passing of each additional cost mandate in Springfield and the City of Chicago.

Since retail owners only keep a small portion of the revenue they earn, where does the additional $.98 go?

  • Operating costs (taxes, fees, utilities, insurances, maintenance, advertising and other expenses)
  • Labor (salary, benefits, payroll taxes, pension payments)
  • Cost of goods (inventory)

“Of every dollar spent in retail, the vast majority of that is used by the retailer who must pay their employees, local taxes, state taxes, insurance and utilities to name a few common expenses,” said Rob Karr, president and CEO of IRMA. “The couple cents left is what they are using to support their families and re-invest in their businesses.”

Retailers in Illinois know all too well the heavy costs of doing business.

The real cost of doing business in Illinois is riddled with mandates that continue to add up for retailers. Individually, issue-specific advocates look at each issue singularly-increase in minimum wage, tobacco tax, state sales tax, motor fuel tax, workers’ compensation, paid leave, etc.-but for the Illinois retailer who is responsible for paying for all of these items collectively, it’s hard to thrive and survive in this environment.

IRMA is fighting the same battles before the Chicago City Council and the Cook County Board.

Chicago has the nation’s highest tobacco taxes and sales tax and significant property taxes with employers bearing the vast majority of the property tax burden. Retailers are too often reporting it’s hard to run a profitable business in the city under a mountain of artificially imposed taxes and ill-conceived regulations.

In 2016, you will see IRMA generating more public and policymaker awareness around the real cost of doing business in Illinois. Watch for updates in future communications as IRMA champions the “Dollar Bill” project statewide.

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