Opinion: No need to rush on county sales tax hike

Chicago Sun Times
Written By Rob Karr and Theresa Mintle Posted: 07/08/2015, 01:34pm
Cook County Board President Toni Preckwinkle | Richard A. Chapman/Sun-Times

Cook County once again will have the highest sales tax in the nation if a proposal by Cook County Board President Toni Preckwinkle is approved by the County Board.

The proposal is a 1 percent increase in the sales tax, which would mean Cook County consumers would pay a nation-leading sales tax of between 10.25 percent and 11.25 percent. The highest rate, 11.25 percent, would be paid by consumers in the Metropolitan Pier and Exposition Authority area, comprising most of the City of Chicago’s core.

OPINION

President Preckwinkle has stated she would like the Cook County Board to approve this increase by the end of July. This increase is being proposed before the county’s expenses are known and before the budget is fully vetted. The county has until Oct. 1 to notify the Illinois Department of Revenue of a sales tax rate change that would begin on Jan. 1, 2016. If the county wanted a full debate on the issue, and the taxpayers deserve this debate, it should have the conversation as part of the annual budget process.

So, the question is: Why the rush?

Preckwinkle deserves a great deal of credit for keeping the campaign promise she used to win her first term. That promise was to roll back the nation-leading sales tax imposed by her predecessor. We are grateful that she made good on that promise.  But now, we are concerned that her desire to increase the sales tax will push more sales out of Cook County into neighboring counties, where taxes are significantly lower, and online, where taxes can be non-existent.

Clearly, Cook County faces fiscal challenges related to its pension liability. But instead of pushing through a tax increase, we would encourage the County Board to use the upcoming months to:

1) Detail the county’s fiscal year 2016 proposed budget and fully explain their challenges. This also helps everyone figure out if such a drastic increase in the sales tax would even fix the challenges. Cook County’s chief financial officer, Ivan Samstein, has a good presentation that provides valuable and insightful information but needs to be dissected. Everyone would benefit from the enhanced transparency.

2) Give the Illinois General Assembly and Gov. Bruce Rauner every possible opportunity to pass the legislation the county needs to help with its pension obligations. President Preckwinkle stated she would “reconsider” the sales tax increase if Springfield passes the county’s pension reform bill. Why not give them that time by waiting until the last possible moment to reach for new tax monies?

Why ask county commissioners to vote on a tax increase in July when it might not be needed come Oct. 1? Why give Illinois another bad economic development headline unnecessarily?

Every mention of President Toni Preckwinkle has to start with a recognition that she has tried to do a very good job of controlling costs and returning Cook County to stable financial footing. She is to be applauded for desiring to tear up the proverbial credit card by stopping debt deferrals and fund sweeps. Like the City of Chicago and the State of Illinois, decades of pension mismanagement is coming home to roost all at once. Nevertheless, tax increases should be the last option — not the first.

We strongly urge the County Board to approach this rationally by using the time between now and Oct. 1 to fully vet this and other ideas to thoroughly address expenses. Slow down. Be transparent.

Rob Karr is president/CEO of the Illinois Retail Merchants Association.

Theresa Mintle is president/CEO of the Chicagoland Chamber of Commerce.

121 Report – CRMA – July 2015

Chicago Retail Merchants Association

POLL: MORE THAN 75% OF COOK COUNTY RESIDENTS OPPOSE

SALES TAX HIKE, PLUS MOST SAY THEY WILL SHOP ELSEWHERE

 

 FOR IMMEDIATE RELEASE                                                                                                                                                CONTACT: Matt Butterfield
July 1, 2015                                                                                                                                                           312-545-5058 | matt@macstrategiesgroup.com

CHICAGO – In a poll conducted across Cook County on Tuesday evening, June 30, an overwhelming 75 percent of respondents say they oppose the 1 percent sales tax increase being proposed by Cook County Board President Toni Preckwinkle, which would give Cook County the highest sales tax in the nation. Additionally, more than 45 percent say they will be more likely to shift to online shopping to avoid Cook County sales taxes, plus more than 68 percent say they would become more likely to shop outside Cook County. The poll was conducted by We Ask America and the Chicago Retail Merchants Association, a committee of the Illinois Retail Merchants Association.

“Consumers in Cook County are already paying a high sales tax, and they have made it clear they do not want to pay even more,” said Rob Karr, president, Chicago Retail Merchants Association. “Across demographic lines, respondents are clear that they are likely to avoid the Cook County sales tax by shopping online or traveling to neighboring counties – as a result, Cook County will not raise the revenue they expect and their problem only gets worse.”

 

POLL RESULTS:

1.      According to published reports, Cook County Board President Toni Preckwinkle is considering raising the county sales tax by a percentage point to 10.25%. She says the move may be necessary to pay for pension debt and other spending. Do you APPROVE or DISAPPROVE of raising Cook County’s sales tax in order to pay for pension debt?

Approve          21.09 %

Disapprove     75.02%

Undecided       3.88%

 

2.      If the sales tax is increased, would that make you more likely or less likely to shop more online to avoid the increase?

More likely     45.77%

Less likely       36.82%

Undecided       17.41%

 

3.      If the sales tax is increased to 10.25% or more, would that make you more likely, or less likely to shop outside of Cook County to pay less?

More likely     68.66%

Less likely       22.49%

Undecided       8.86%

 About Chicago Retail Merchants Association

Chicago Retail Merchants Association (CRMA), a committee of the Illinois Retail Merchants Association (IRMA), is dedicated to protecting the retail industry in the City of Chicago. Employing one in every five Chicagoans and generating 1/3 of local tax revenues, today, more than ever before, it is necessary for the retail industry to have a firm, solid footing in the activities of local government. CRMA is the voice for retailers in the City of Chicago.

 

Poll Methodology

This poll was conducted on June 30, 2015, using both automated (recorded) and live calls. In all, 1,006 Cook County residents completed all questions on the poll from both landlines and cell phones. The Cook County residents dialed were randomly selected using our proprietary registered-voter database to assure the greatest chance of providing an accurate cross-section of opinion from the countywide sample. Our sampling methodology ensures that We Ask America poll results are “projectable,” meaning that if every resident in a given geography were dialed, the results would not differ from the reported poll results by more than the stated margin of error at a 95% confidence level (the industry standard), if the same survey was repeated.  For this case, results with a margin of error of ±3.1 % at the 95% confidence level means that if the same survey were conducted 100 times, then 95 times out of 100 the results would not vary in either direction by more than 3.1% in either direction.  No weighting measures were applied to the results to correct for over/under-sampling since it was determined those changes would not make a significant difference.

POLL RESULTS

Cook County Sales Tax Hike Poll

Illinois Retail Merchants Association

We Ask America logo

We Ask America™ Polls

 Date of Poll:  June 30, 2015

  Responses: 1,006 Likely Voters             Margin of Error:  ±3.1%

   1. According to published reports, Cook County Board President Toni Preckwinkle is considering raising the county sales tax by a percentage point to 10.25%. She says the move may be necessary to pay for pension debt and other spending. Do you APPROVE or DISAPPROVE of raising Cook County’s sales tax in order to pay for pension debt?

 

 

Count

Percentage

Approve

  212

21.09%

Disapprove

  754

75.02%

Undecided

   39

3.88%

 

  2. If the sales tax is increased, would that make you more likely or less likely to shop more online to avoid the increase?

 

 

Count

Percentage

More likely

  460

45.77%

Less likely

  370

36.82%

Undecided

  175

17.41%

 

  3. If the sales tax is increased to 10.25% or more, would that make you more likely, or less likely to shop outside of Cook County to pay less?

 

 

Count

Percentage

More likely

  690

68.66%

Less likely

  226

22.49%

Undecided

   89

8.86%

 

Crosstabs by GENDER:                                                                       

SALES TAX APPROVAL
GENDER

Approve

Disapprove

Undecided

Total

   Female

20.28%

74.96%

4.76%

100.00%

   Male

22.60%

75.14%

2.26%

100.00%

   Total

21.09%

75.02%

3.88%

100.00%

SHOP ONLINE TO AVOID LOCAL TAX
GENDER

More likely

Less likely

Undecided

Total

   Female

42.09%

39.17%

18.74%

100.00%

   Male

52.54%

32.49%

14.97%

100.00%

   Total

45.77%

36.82%

17.41%

100.00%

SHOP OUTSIDE COOK CO
GENDER

More likely

Less likely

Undecided

Total

   Female

67.13%

23.20%

9.68%

100.00%

   Male

71.47%

21.19%

7.34%

100.00%

   Total

68.66%

22.49%

8.86%

100.00%

 

Crosstabs by ETHNIC GROUP:

SALES TAX APPROVAL
ETHNIC GROUP

Approve

Disapprove

Undecided

Total

   African American

19.56%

74.76%

5.68%

100.00%

   Asian

24.49%

71.43%

4.08%

100.00%

   Hispanic

17.54%

80.70%

1.75%

100.00%

   White

22.13%

75.53%

2.34%

100.00%

   Other/Refused

21.43%

72.32%

6.25%

100.00%

   Total

21.09%

75.02%

3.88%

100.00%


SHOP ONLINE TO AVOID LOCAL TAX
ETHNIC GROUP

More likely

Less likely

Undecided

Total

   African American

37.85%

47.95%

14.20%

100.00%

   Asian

46.94%

34.69%

18.37%

100.00%

   Hispanic

42.11%

35.09%

22.81%

100.00%

   White

51.49%

30.21%

18.30%

100.00%

   Other/Refused

45.54%

34.82%

19.64%

100.00%

   Total

45.77%

36.82%

17.41%

100.00%

 

SHOP OUTSIDE COOK CO
ETHNIC GROUP

More likely

Less likely

Undecided

Total

   African American

67.82%

23.97%

8.20%

100.00%

   Asian

57.14%

32.65%

10.20%

100.00%

   Hispanic

68.42%

22.81%

8.77%

100.00%

   White

68.51%

21.28%

10.21%

100.00%

   Other/Refused

76.79%

18.75%

4.46%

100.00%

   Total

68.66%

22.49%

8.86%

100.00%


METHODOLOGY:

This poll was conducted on June 30, 2015 using both automated (recorded) and live calls. In all, 1,006 Cook County residents completed all questions on the poll from both landlines and cell phones. The Cook County residents dialed were randomly selected using our proprietary registered-voter database to assure the greatest chance of providing an accurate cross-section of opinion from the countywide sample.

Our sampling methodology ensures that We Ask America poll results are “projectable,” meaning that if every resident in a given geography were dialed, the results would not differ from the reported poll results by more than the stated margin of error at a 95% confidence level (the industry standard), if the same survey was repeated.  For this case, results with a margin of error of ±3.1 % at the 95% confidence level means that if the same survey were conducted 100 times, then 95 times out of 100 the results would not vary in either direction by more than 3.1% in either direction.  No weighting measures were applied to the results to correct for over/under-sampling since it was determined those changes would not make a significant difference.

voters-oppose-cook-county-sales-tax-hike.jpg&maxw=708&q=100&cb=20150702000137&cci_ts=20150701145127

Crain’s Chicago Business has the story on our latest CRMA poll. Who likes a sales tax hike? Not too many… Here is the article:

Tax hikes are never popular, and Toni Preckwinkle’s proposal to raise the sales tax may not be an exception, even if it is eventually adopted by the Cook County Board.

A large majority of Cook County residents do not favor raising the tax to 10.25 percent, from 9.25 percent, to pay pension debt, according to a poll commissioned by the Illinois Retail Merchants Association, which opposes the increase. The hike is estimated to raise as much as $474 million a year.

Of the 1,006 likely voters surveyed, 75 percent said they disapprove of the plan, according to a poll yesterday conducted by We Ask America. Only 21 percent approved, while 4 percent were undecided.

A sales tax hike “is going to give us a headline we really don’t need, which is that we are going to be the highest sales tax in the nation,” said Rob Karr, CEO of the retail group.

Preckwinkle, president of the Cook County Board, has acknowledged that the sales tax hike is not popular, but says it is needed to fund the retirement plan for county workers after the Illinois General Assembly failed to pass a pension bill she backed. A portion of the tax hike also would be used to finance road improvements and other infrastructure projects.

“We are sensitive to the concerns of all Cook County businesses, and for that reason we believe it’s critical to create a stable county government with certainty around our tax structure,” a Preckwinkle spokesman said in a statement.

She has said a majority of the board will not approve a property tax hike, limiting her options. But she believes she can round up enough votes on the board to raise the sales tax. The survey underscores the difficulty of finding those votes, Karr said.

 “It would be pretty rare that there would be any revenue enhancements that are easy,” he said. “I think this probably falls in the category of one of the hardest.”

The survey also found that the sales tax hike would make people more likely to shop online or outside the county.

Nearly 69 percent said they would be more likely to shop outside the county if the sales tax were raised. Nearly 46 percent said the tax hike would make them more likely to shop on the Internet, while 37 percent said it would make them less likely. Nearly 9 percent were undecided.

The Preckwinkle administration has said it has factored a loss of sales in its estimate that the tax hike would raise $305.5 million in the fiscal year ending Nov. 30, 2016. In fiscal 2017, the first complete year the hike would be in place, it would raise $473.8 million.

The poll has a margin of error of plus or minus 3.1 percentage points. The survey combined an unspecified mix of automated responses with live interviews. It also surveyed respondents on land lines and cellphones. We Ask America is a subsidiary of the Illinois Manufacturers’ Association.

TanyaTriche

Contact Information:

Tanya Triche

Vice President & General Counsel
312-726-4600
ttriche@irma.org

121 Report – CRMA – June 2015

Issue 4             

In This Issue

COOK COUNTY SALES TAX
CITY COUNCIL COMMITTEE
COUNCIL ACTION

CHICAGO TAKES INITIAL STEPS TO ADDRESS

UNCERTAIN FINANCIAL FUTURE

The new City Council has been in office for one month and as they settle in to set up their offices, hire staff and meet with constituents, they are also keenly aware that a tough budget season looms overhead.  In order to balance the budget and fund the various pension systems, the Aldermen will be asked to take some hard votes.  This month, the Council approved a measure by the Mayor to restructure some of its debt by issuing over $1 billion in bonds.  The city argued that it was necessary to restructure the debt so that it could move from a variable interest rate, which it cannot control, to a more favorable, fixed interest rate.

The city has found itself under the critical and watchful eye of Moody’s in recent months.  Last month, the credit rating firm reduced Chicago’s rating to junk status.  This move was punishment for not having a sufficient fix for the pension crisis in place, and it gave lenders an edge by allowing them to call up payments on existing lines of credit.  Instead of following through with an immediate demand for payment, the banks agreed to keep the status quo if the city took reasonable steps to reduce its risk.  Therefore, the Mayor sought permission from the Aldermen to restructure the debt.  The city is confident that it will find buyers interested in its debt as interest in other recent bond deals has been heavy.

While this move was criticized by some members of the Progressive Caucus because it restructures debt without providing for new revenue, the measure passed overwhelmingly in committee and on the Council floor.

The city is under pressure to make a nearly $550 million balloon payment to its police and fire pensions required by state law.  To date, it does not have a viable way to make the payment outright and is counting on the General Assembly to help it restructure the payment into something more manageable.  One thing it won’t be able to do is reduce benefits in order to increase funding to the pensions.  The Illinois Supreme Court has ruled that such measures are unconstitutional.  As the General Assembly continues to debate how it will address its own underfunded pensions, the city looks on with some angst.

In the meantime, members should note that an ordinance to increase property taxes is not only possible, it’s probable.  And a property tax increase would come on top of the 30%-40% average increases in property tax assessments that commercial property owners are already experiencing in Cook County.  Other ideas to raise revenue such as a gas tax and city income tax have been floated as well.

While the official kick-off to the budget season usually starts in October, given the city’s uncertain financial future and the gridlock in discussion in Springfield, Mayor Emanuel announced that the city will move up its budget discussions to September.  The Mayor will publish his ideas of how to fill the $1 billion budget gap at that time.   The Mayor also plans to have a budget passed a month early as well.  Passage will likely occur prior to November 1, 2015.

Return to Top

DÉJÀ VU:  

COOK COUNTY BOARD PRESIDENT TALKS OF

INCREASING THE SALES TAX

After running on a platform to reform government ethics, restructure the health and hospital system and repeal the 1% increase in the sales tax, Cook County Board President Toni Preckwinkle handily won her election in 2010.  Since then, she made good on her promise to repeal the increase and did so over a period of 3 years, with the tax returning to its current rate of 0.75% in 2013.  She also made cuts in staff over the years to reduce her overall budget.  In the interim, she raised the cigarette tax by $1.00, instituted a tax on other tobacco products (OTP), increased the liquor tax and imposed a non-titled personal property use tax (which was subsequently defeated in court) to help replace the revenue from rolling back the sales tax increase.

Now, as President Preckwinkle faces her own significant budget issues related to under-funded pensions, a crowded county jail and the health and hospital system, it is being widely reported that she will seek to increase the sales tax by 1% just two years after she repealed the tax increase.  If such a measure were to be introduced and passed, Chicago would have the highest sales tax in the country at 10.25%.  While the President’s office will not confirm whether these reports are true, Republican Commissioners have stated that she has met with them separately to discuss the idea and Democratic Commissioners have warned that additional sources of revenue were on the table for 2016.  Early reports indicate praise for President Preckwinkle’s cost cutting measures to eliminate waste at the County and concern about a property tax hike which could make a sales tax increase a more viable option.

CRMA has been very clear.  An increase in the sales tax is wrong for the County, especially around its borders.  Shoppers are mobile and have shown that if prices and taxes are lower elsewhere, then they will drive in search of ways to save money.  Cook County’s commercial districts, especially in South Suburban Cook, are struggling with high vacancy rates and increased property tax assessments.  At a time when many of the local mayors are looking for more investment, a sales tax increase discourages development inside the border.  Furthermore, there has been some discussion of saving residents and businesses from a property tax hike by agreeing to an increase in the sales tax.  But this is likely a false premise as the city of Chicago will very likely attempt a property tax hike at the same time that the County Board will introduce the sales tax increase.  If you live in Chicago, that’s a double whammy.  CRMA will remind Commissioners and the President’s office of these facts, if a proposal actually surfaces.

We are hearing that a proposal could come as early as July 1 and be approved by the end of that month.  This measure would most likely run separate and apart from the budget in an effort to encourage Springfield to act on the County’s pension relief bill.  On behalf of members who have made the decision to invest inside the Cook County border, we would oppose any measure that drives our customers over the border.

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SHIFTING COMMITTEE ASSIGNMENTS

The City Council has announced the Committee Chairmen and members for this new term. CRMA generally interfaces with three committees, although we occasionally will have agenda items that affect the industry sent to other committees.  To that end, you should know which Council Members sit on the Committees on Finance, Health and Environmental Protection and License and Consumer Protection.  They are listed below:

Committee on Finance (35 members)

Chair:  Ed Burke (14)

Vice Chair:  Patrick O’Connor (40)

John Arena (45)

Carrie Austin (34)

Anthony Beale (9)

Howard Brookins, Jr. (21)

Walter Burnett, Jr. (27)

Will Burns (4)

George Cardenas (12)

Willie Cochran (20)

Pat Dowell (3)

Jason Ervin (28)

Toni Foulkes (16)

Leslie Hairston (5)

Michelle Harris (8)

Margaret Laurino (39)

Roberto Maldonado (26)

Gregory Mitchell (7)

Emma Mitts (37)

Joe Moore (49)

Proco “Joe” Moreno (1)

Ricardo Munoz (22)

Matt O’Shea (19)

Harry Osterman (48)

Marty Quinn (13)

Ariel Reboyras (30)

Brendan Reilly (42)

Roderick Sawyer (6)

Debra Silverstein (50)

Daniel Solis (25)

Nicholas Sposato (38)

Patrick Thompson (11)

Tom Tunney (44)

Scott Waguespack (32)

Michael Zalewski (23)

Committee on Health

Chair:  George Cardenas (12)

Vice Chair:  Harry Osterman (48)

Carrie Austin (34)

Walter Burnett, Jr. (27)

James Cappleman (46)

Willie Cochran (20)

Toni Foulkes (16)

Leslie Hairston (5)

Brian Hopkins (2)

Deborah Mell (33)

Gregory Mitchell (7)

Emma Mitts (37)

Joe Moore (49)

Proco “Joe” Moreno (1)

Carlos Ramirez-Rosa (35)

Ariel Reboyras (30)

Tom Tunney (44)

Gilbert Villegas (36)

Michael Zalewski (23)

Committee on License and Consumer Protection

Chair:  Emma Mitts (37)

Vice Chair:  Debra Silverstein (50)

John Arena (45)

James Cappleman (46)

Willie Cochran (20)

Michelle Harris (8)

Roberto Maldonado (26)

Gregory Mitchell (7)

David Moore (17)

Matt O’Shea (19)

Marty Quinn (13)

Ariel Reboyras (30)

Roderick Sawyer (6)

Michael Scott, Jr. (24)

Michele Smith (43)

Chris Taliaferro (29)

Tom Tunney (44)

Scott Waguespack (32)

The City also has 2 new Commissioners of departments that interface often with the membership:

Commissioner Ginger Evans

Department of Aviation

Commissioner Judy Frydland

Department of Buildings

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CITY COUNCIL ORDINANCES AND RESOLUTIONS   INTRODUCTIONS

Ordinance to Issue Permits for Litter Baskets on the Public Way

Sponsor:  Alderman Joe Moreno (1st Ward)

Committee on Finance

This proposal would require privately-owned litter baskets that are placed on the public way to be permitted.  Designs for the baskets must be approved by the city.  Standard refuse containers and other commercial refuse containers are exempt from the proposal.  The owner is responsible for removal of trash from the basket.  Violators will be subject to a fine. 

Ordinance to Ban the Sale of Food Products Derived from an Animal that was Administered Antibiotics

Sponsor:  Alderman Edward M. Burke (14)

Committee on Finance

This proposal is a re-introduction of the Chairman’s proposal from last term.  It proposes to ban the sale of any food product derived from an animal that was administered a medically important antimicrobial for a non-therapeutic use.  If animals were administered the drug for the purpose of treating an active disease or infection, then the proposal would not apply.  But if the antimicrobials are used generally to promote growth or generally prevent diseases that are not active in the animal or necessary to control diseases, then any food products made from such animals will not be allowed for sale in Chicago.  The proposal would allow the Board of Health to promulgate rules for enforcement purposes. Sidewalk Cafe EnforcementSponsor:  Alderman Brendan Reilly (42)Committee on License and Consumer ProtectionThis proposal would allow for a sidewalk café to be temporarily shut down by the city if they have been issued notices of violation on three different days regarding breaches of public safety.  Such citations, if sustained, can result in the denial of a renewed permit or a renewed permit with conditions. Outdoor Patio Hours of OperationSponsor:  Alderman Brendan Reilly (42)Committee on License and Consumer ProtectionThis proposal would temporarily allow for the sale or service of alcohol until midnight from Sunday through Thursday for permitted outdoor patios in the Central Business District.  Currently, sales and service must stop at 11pm during those days.  Friday and Saturday sales and service will remain unchanged.  These extended hours would expire on December 1, 2015.

 

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Contact Information

TanyaTriche

Tanya Triche

Vice President & General Counsel

312/726-4600

Retail Register No. 360, June 2015

IRMA'S Alec Laird, Rob Karr and tanya Triche at the Capitol on a busy session day.
IRMA’S Alec Laird, Rob Karr and Tanya Triche
at the Capitol on a busy session day.

IRMA’s Top Legislative Accomplishments in 2015

IRMA was at the forefront of a number of issues before the Illinois General Assembly this spring fighting to protect the interests of the retail industry and ensuring that legislation was passed that strengthens Illinois’ business climate.

On May 31, the General Assembly adjourned with no agreement between the governor and legislature on the FY16 budget. The House and Senate leaders have scheduled the legislature to be in session throughout June. IRMA will continue to watch issues closely throughout the summer and keep you apprised of any significant developments.

Here’s an overview of some of IRMA’s legislative successes this past spring:

WORK SCHEDULES

IRMA was successful in getting both business and labor groups to oppose to HB3554. The bill initially required a two-week notice for scheduling and payment provisions if a person was called in unexpectedly or had their shift changed. A later amendment required an employer to enter into negotiations regarding an employee schedule if an employee requests a schedule change. IRMA pushed back on the basis that the legislation effectively mandated a collective bargaining scheme upon private employers. This bill did not pass through the General Assembly, but we fully anticipate it will return.

DATA SECURITY

An initiative of Illinois Attorney General Lisa Madigan, SB1833 is intended to protect consumers by providing notice when certain personal information gets in the wrong hands. Such notice is already required for breaches of a person’s credit information, social security number and certain medical information related to diagnosis.  The bill expands the state’s data breach notification law by adding new categories of information that will be considered personal and sensitive and by including notification to the attorney general’s office so that certain breaches can be posted on her website. After several months of negotiations with the attorney general’s office, SB1833 was amended to address the concerns of IRMA’s members.  As a result, IRMA removed its opposition and took a neutral position on the bill. Some of the more important changes obtained by IRMA include: narrowing the definitions of consumer marketing and geolocation information to more closely target specific behavior of concern to the attorney general, removing the requirement to notify the individual when geolocation and consumer marketing information is breached, raising the threshold that triggers notification requirements and expanding the time allowed for businesses to notify individuals and/or the attorney general when information is breached. The bill now awaits the governor’s approval.

PRIVATE LABEL CREDIT CARDS

SB507 was reintroduced after Governor Quinn amendatorily vetoed the bill during his last few hours in office with unrelated language. SB507 allows a retailer to get a refund on the sales tax they pay on the bad debt created by consumers who use store-branded private label credit cards and fail to pay their bills either in part of in full. Over the last few years, IRMA worked with the Illinois Department of Revenue to address their procedural concerns including: ensuring proper documentation would be available, placing limits on the transactions that are available for a bad debt refund, and providing a clear line of accountability. As a result, SB507 passed the legislature and has been sent to the governor.

HEROIN

HB1 will create one of the nation’s most comprehensive approaches to combating heroin and prescription drug abuse. This legislation will expand specialized drug courts that center on treatment so that drug addicts can get rehabilitation services. It will also require schools and police and fire departments to stock naloxone, a drug that quickly counteracts heroin overdoses. IRMA fought for a significant change in this bill—it originally would have required pharmacies to serve as drug take-back sites for unused prescriptions. The amended version requires the state to provide information on how to properly dispose unused prescriptions, and requires the Illinois Environment Protection Agency to establish prescription take-back programs. The bill passed both chambers with the support of IRMA and a broad coalition and awaits the governor’s approval.

RETAIL THEFT

SB202 will establish a pilot program for Cook County to provide an accelerated route to adjudication for people accused of misdemeanor retail theft or criminal trespass. This bill will permit qualifying persons accused of the aforementioned crimes to either have a final judgement of their case within 30 days of arrest or be allowed to bond out of jail on their own recognizance until their hearing date. IRMA supports this bill because it addresses the crime of retail theft in a way that is fair to the victim without undermining the severity of retail theft, and also substantively addresses the concerns of taxpayers and criminal justice reform advocates. The bill passed the legislature and has been sent to the governor for his signature.

TOBACCO

HB2513 is a trailer bill that clarifies the provisions passed in P.A. 98-1055, requiring retailers to obtain a license to sell cigarettes. IRMA worked closely with IDOR on the following provisions to P.A. 98-1055:

  1. Allow a waiver for records to be kept out of state;
  2. Broaden the employee training requirements;
  3. Allow the employee training to be conducted electronically;
  4. Provide an avenue to mitigate retail tobacco citations;
  5. Provide a waiver for closed loop distribution invoice record keeping requirements.

The bill passed unanimously through both chambers and is expected to be signed by the governor.

        Business Day: A Great Success in the Capital City

IRMA and thBusiness Day Luncheone Illinois Manufacturers’ Association (IMA) hosted a very successful Business Day in Springfield on May 6, 2015. More than 400 business leaders from around the state participated in Business Day 2015.

 On the eve of Business Day, Illinois Governor Bruce Rauner spoke to the IRMA and IMA Boards at Saputo’s Italian Restaurant about the importance of a strong business economy in Illinois. He expressed the urgency to make Illinois a competitive state in terms of business investment and development.

Business leaders met with various lawmakers at the Capitol to share their concerns and discuss various legislative proposals that would affect the Illinois business community. Lawmakers on both sides of the aisle were encouraged to create a long-term path to economic growth through sound fiscal policy, tax reform, workers’ compensation reform along with opposition to new costly and burdensome regulations like a minimum wage hike, paid sick leave, new taxes on gasoline and soda and cuts to pharmacy Medicaid reimbursement.

At the Business Day luncheon, the keynote speakers were Illinois Senate President John Cullerton and Illinois House Minority Leader Jim Durkin; Congressman Adam Kinzinger (R-16th District) was also a featured speaker at the event.

DSC_0067Topping off the day was an 80s-themed Party Under the Tent which is a can’t-miss event. As always, the party featured live music and IRMA’s generous food and beverage members. Many thanks to Anheuser-Busch, Coca- Cola Company, Diageo, Dr. Pepper/ Snapple, E.J. Gallo Winery, KFC, McDonald’s, MillerCoors, Outback Steakhouse, PepsiCo, Saputo’s and Schnucks Markets for once again making this event an astounding success!

   

Commentary: A Path to Reforming Our Broken Sales Tax System

The following appeared June 2nd in the Washington, D.C. news outlet Roll Call

The ingenuity of the American entrepreneur has created an accommodating and diverse consumer marketplace over the past two decades. Through the rise of the Internet and emerging payment-processing innovations, countless businesses have been able to supplement their brick-and-mortar storefronts with an online sales presence. Unfortunately, our country’s sales tax system has not adapted to the convergence of digital and physical commerce. This has resulted in harsh consequences that have lingered on for nearly 20 years in the form of the unfair tax collection advantage that online-only retailers — such as eBay and Overstock — hold over millions of stores on Main Street.

Thankfully, this wrong can still be righted. With renewed bipartisan momentum now in the Senate, it is time for all of our elected officials in Congress to work toward expeditiously passing the Marketplace Fairness Act of 2015. This bill is a path to reforming our broken sales tax system.

To illustrate the anti-competitive elements of today’s marketplace, think about your own shopping experience. When you pay for a new pair of shoes, it is considered a sale — regardless of whether you make that purchase in-person at a local shopping center or online through a boutique’s website.

But unlike your local stores, online-only retailers do not collect sales tax at the moment of purchase. Believe it or not, the onus is on you to report and pay any necessary tax to your state’s department of revenue. It is easy to see why you and the brick-and-mortar stores in your neighborhood — which are legally required to collect sales tax if the state imposes one — bear the brunt of an unfair system.

As someone who has spent close to 40 years in the commercial real-estate sector, I am increasingly concerned about the inequities in our marketplace. This sentiment is fortunately shared by the group of senators — Michael B. Enzi, R-Wyo.; Dick Durbin, D-Ill.; Lamar Alexander, R-Tenn.; and Heidi Heitkamp, D-N.D., as well as others — that introduced the latest Marketplace Fairness Act. They know, much like the rest of us on Main Street, that we cannot accept a sales tax system that hinders American shoppers, businesses and local communities.

For consumers, maintaining the current system prolongs an archaic legal burden and a major shopping inconvenience. Shoppers will remain responsible for tracking purchases made online and then calculating the proper sum owed to their respective states. A failure to follow this process translates to breaking the law under our current system. Additionally, consumers stand to lose over the long-term when local businesses — which offer necessaries, specialty goods and custom items — cannot carry as much inventory or are ultimately forced to close due to the uncompetitive climate.

For brick-and-mortar businesses, the continuation of today’s system is akin to a death sentence. Local stores that must collect a sales tax increasingly function as showrooms for shoppers, who want to examine items and then order the same products online to save 5 percent to 10 percent in taxes. If this trend continues, we will see more businesses closing in our neighborhood shopping centers and town squares; our teenagers will be unable to find traditional part-time work; our neighbors will be unable to find that second job; and our communities will lose time-honored traditions such as Santa Claus sitting in the local department store every December.

For our communities and states, congressional inaction will bring additional economic and social impact. When brick-and-mortar businesses downsize or shutdown due to the marketplace, existing employees face both reduced job security and stagnant wages — plus the community endures weak job growth and an across-the-board reduction in tax revenue. This loss of tax revenue forces communities to make painful decisions, the most common being raising property taxes or cutting back on popular educational, recreational and public works services.

Last but not least, let us not forget the social downside that also comes when businesses can no longer sponsor little league teams, and organizations like the Salvation Army have no stores to stand in front of when advocating for society’s most needy. These are voids that online-only retailers will never be able to fill.

In the coming months, Congress will have ample time to debate the clear merits of the Marketplace Fairness Act and then pass a suitable version of the bill. Our responsibility during this time is to remind elected officials on Capitol Hill just how crucial this legislation is to American shoppers, businesses and communities. This action can go a long way to supplementing the current efforts of the International Council of Shopping Centers, Marketplace Fairness Coalition, NAREIT and hundreds of other local and national trade associations.

With deep experience purchasing and managing large retail shopping centers, I know the central role that commerce plays in supporting our shared American dream. Restoring fairness to our marketplace is an important step toward making that dream a reality for more of us in 2015 and beyond.

Daniel L. Goodwin is Chairman and CEO of The Inland Real Estate Group of Companies, Inc.

 IRMA Members Encouraged to Write Letters in Support of Remote Transaction Parity Act of 2015

IRMA has long fought to level the playing field between brick-and-mortar retailers and remote selling competitors outside of Illinois who don’t collect the sales tax and use that loophole as a competitive advantage.  Our consistent efforts have positioned Illinois to close this loophole. However, to bring our efforts to a successful conclusion, we need your help in getting Congress to act.

Formerly known as the Marketplace Fairness Act, the newly introduced Remote Transaction Parity Act (RTPA) would give states the right to impose a sales tax obligation on remote sellers. Because of this loophole that pre-dates the Internet, online-only companies can achieve as much as a 10 percent price advantage over brick-and-mortar retailers by not collecting state sales taxes. This special treatment means government is picking winners and losers in the marketplace, and local businesses simply cannot compete long-term with online giants that enjoy a government-sanctioned competitive advantage.

IRMA President and CEO Rob Karr is asking all IRMA members to write letters to our Illinois congressmen encouraging them to co-sponsor and actively support RTPA. “We need Illinois legislators to stand with and for our local retailers on this issue,” said Karr.

IRMA recently emailed a sample letter in support of the RTPA to members that you are welcome to adjust and use. If you need us to send that to you again or if you have any other questions on the matter, please call us!