This Week in Springfield – 100-07

IN THIS ISSUE:

RETAIL THEFT
$15 MINIMUM WAGE
DATA PRIVACY
MEDICAID
TELECOMMUNICATIONS MODERNIZATION
BUSINESS DAY

This Week in Springfield retail theft and minimum wage were among the issues debated.

RETAIL THEFT

 
IRMA, the Illinois Sheriffs Association, and the Illinois Municipal League joined together to oppose legislation that would increase the retail felony theft threshold from $300 to $2,000 (HB 3337 Rep. Elgie Sims, D-Chicago) and $2,500 (HB 3856 Rep. Justin Slaughter, D-Chicago) respectively. This means a person may steal $1,999/$2,499 from local businesses repeatedly while only being charged with a misdemeanor while Illinois’ retailers lose at least $2 billion a year, the State of Illinois loses at least $125 million a year in lost sales taxes, and police and local municipalities lose at least $25 million a year in lost sales taxes.

Proponents of this legislation lean on a Pew Charitable Trust study that purports to show that while states have increased the retail threshold, overall theft rates have declined. This is misleading as the report compares apples and oranges. The statistics the report cites are for larceny which is a catch all of a variety of property crimes. When you dig deeper, the FBI Uniform Crime Reporting (UCR) statistics prove that retail theft has increased as states increased their threshold. Specifically, the very same FBI UCR numbers that show that retail theft has increased nearly 20% in the last five years show the value of the items stolen have increased 30%–a direct response to raising the retail felony threshold.

Proponents also claim that retail theft is a matter of need. Again, the facts are not on their side. First, over 80% of retail thieves have the money in their pocket to pay for the item(s) they were caught stealing. Additionally, the most commonly stolen items include cigarettes, alcohol, energy drinks, GPS devices, laptops, cell phones, and designer clothing to name a few. While infant formula is on the list, law enforcement will tell you that it is stolen to ‘cut’ drugs, primarily heroin and cocaine, or to be sold in Asia.

Additionally, people are not sitting in jail ‘simply’ for retail theft. According to the Illinois Sentencing and Policy Advisory Council (SPAC). The average retail thief has 7 previous felony convictions, including drug and gun felonies, and 13 previous misdemeanors. This is a far stretch from your first time offender.

None of the opponents of the current proposals are against providing relief to first time offenders. In fact, IRMA teamed up with Cook County Sherriff Tom Dart’s office to pass the Accelerated Resolution Court Act that requires an immediate hearing and electronic bail for retail theft offenders. That means that as of January 1st, no one arrested for misdemeanor retail theft is sitting in jail because they do not have bond money. IRMA has also been one of the very few business groups to support expungement and sealing of non-violent offenses including retail theft and job training diversionary programs for non-violent offenders including retail theft. IRMA negotiated with advocates to pass ‘ban the box’ legislation that prohibited employers from asking about prior criminal history on employment applications. The retail industry hires more ex-offenders than any other industry. It is safe to say that IRMA is one of the few business groups that is consistently willing to work with advocate on the behalf of individuals who have made a mistake and who work towards correcting and moving beyond that mistake. However, IRMA will not cheapen these efforts by ignoring the damage that repeat and habitual offenders cause retailers, employees, consumers, tax payers, local communities and law enforcement.

 

IRMA looks forward to engaging on this topic by providing accurate and honest representation of the current retail theft environment in Illinois. IRMA also looks forward to continuing to lead the business community by working towards viable solutions for first time offenders and ex-offenders.

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$15 MINIMUM WAGE

 

Wednesday afternoon, the House Labor and Commerce Committee held a subject matter hearing on proposals to increase Illinois’ minimum wage to $15 per hour. There are currently three different proposals in the committee all seeking to impose a $15 minimum wage. IRMA President and CEO Rob Karr testified against the proposal.

 

If spread over five years, such a proposal would mean an 81.8% increase in the starting wage or an average increase of 16.36% per year added onto the bottom line of every employer. This is just labor costs and doesn’t include the other costs of doing business (e.g. commodities, utilities, benefits, rent/lease, etc.). The current experiences of the City of Chicago and Seattle should be giving great pause.

 

The City of Chicago, and Cook County, have embarked upon a path of reaching into the pockets of employers with both hands. They have imposed billions in new taxes as well as imposing significant additional costs in labor mandates such as their own $13 minimum wage and paid leave. The result, at least in the City of Chicago, has been historic unemployment among workers with few or no skills, historic unemployment in minority communities, and expansion of food deserts and medically underserved areas. The combined costs have further destabilized neighborhoods across Chicago. Only the Loop and wealthier pockets in the City are surviving driven almost exclusively by a spike in tourism. If that bubble bursts, the retailers in the Loop, including restaurants and hotels, will be struggling as well. Municipalities across Illinois can duplicate the tourism experience of the City. The question then becomes why would anyone want to impose on the communities outside of Chicago the same negative outcomes? Seattle provides even more proof.

 

The Seattle City Council, the same body that adopted a $15 minimum wage, also commissioned a study to measure impact. The study found that despite a growing economy fueled by technology and aerospace manufacturing, there were fewer jobs available for no-skilled or lower-skilled workers, their total weekly earnings had dropped as Seattle employers reduced hours to try and control costs, and these employees were working more outside Seattle in order to work more hours. It is important to note that these impacts are already being realized and Seattle has not yet imposed the $15 minimum wage on employers with fewer than 500 employees. Seattle’s experience begs the question of why Illinois wants to further extinguish opportunity?

 

Given all the costs being imposed in the City of Chicago and Cook County, retailers are reporting bottom line expense increases of 20% – 30% compared to last year. The problem is they have no ability to grow sales. Illinois lost at least 78,000 people the last three years. Those people represent lost sales. Those are people spending their money in other states. The financial impact is substantial. These lost sales represent $144 million in lost sales on apparel, $548 million in lost sales on food, $222 million in lost sales on entertainment, and $741 million in lost sales in transportation. Just in these four categories, that represents over $1.6 billion in lost sales and over $103 million in lost state sales tax not to mention the lost sales tax for local governments and the lost income tax. Finally, we shouldn’t overlook the impact on not-for-profits, universities, community colleges, park districts, YMCA’s, youth activity associations, etc. in terms of the increased costs they will have to pay at $15 and lost contributions from the people leaving Illinois.

 

The problem is that at some point, the state will be forced to address the fiscal situation. It will require massive tax increases that will pale in comparison to the billions imposed by the City of Chicago and Cook County. Many policy makers talk about returning stability. Stability isn’t achieved without restraint – restraint in Springfield and restraint of local governments. Otherwise, the vicious cycle that has plagued Illinois will continue to do so.

 

A vote on a proposed $15 minimum wage is expected in the House Labor and Commerce Committee sometime within the next two weeks.

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DATA PRIVACY

 

A subject matter hearing was held two weeks ago to discuss several bills to regulate companies that collect, share and/or sell data on customers or users of websites and apps. The House Committee on Cybersecurity, Data Analytics and Information Technology heard testimony from experts on how data is collected, shared and used in the marketplace. It also took testimony from representatives of companies that buy, sell and collect such data to provide innovative services, create unique customer experiences and develop social media platforms. Lastly, the committee heard from Cook County Sheriff Tom Dart’s office on whether Illinois residents have a right to know what data is being shared and who the data is being shared with.

 

The Sheriff’s bill, SB 1502 Amendment #2 (Sen. Michael Hastings, D-Frankfort) was debated this week in the Judiciary Committee. The bill allows companies to collect, share and/or sell data with 3rd parties but would require those companies to also provide a way for Illinois residents to inquire about whatpersonal information collected on them has been shared or sold. Personal information is defined broadly. It includes very basic information such as a person’s name, address or telephone number that can be easily found through a simple Google search. It also includes information that would widely be considered to be private, like a person’s social security number, account number and personal text messages. While the bill has been amended to address general concerns that the business community had with private rights of action, it continues to have an expansive definition of what information should be considered “personal.” For purposes of consistency and to avoid confusion, this proposal should utilize the same definition of personal information in the Illinois Personal Information Protection Act (PIPA). IRMA has been in contact with the sponsor and Sheriff Dart’s office and they are willing to continue to discuss further changes that would narrowly tailor the bill to address information that truly should be considered personal. The bill passed with a vote of 7-4-1.

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MEDICAID

 

 
The House Appropriations – Human Services Committee held a subject matter hearing Thursday morning on the potential impact on the state’s Medicaid program if the changes being discussed in Washington, D.C. are enacted. Felicia Norwood, Director of the Illinois Department of Healthcare and Family Services, provided a detailed overview of the anticipated impacts.

 

As described at the hearing, if federal Medicaid converts to a block-grant system, each state will be given a per capita target cap in Fiscal Year 2019. If a state spends above the cap, that state will have to repay their federal Medicaid matching dollars. Presently, Illinois receives 51.3% match or $0.513 cents on every dollar. That match declines on October 18th to 50.74%. Federal matches range from 50% – 75% depending upon the formula used by the federal government to determine the relative wealth of a state. Mississippi is at 75% while, historically, Illinois is near the bottom very near 50%.

 

Under the Affordable Care Act, an enhanced match was provided to states that chose to expand their Medicaid program to cover additional individuals. That match is presently at 90% but it ends December 31, 2020. States will have the option to continue to cover the expanded population after 2020 but that coverage will be matched at the traditional rate. Currently, 650,000 Illinoisans are covered under the expanded Medicaid program.

 

Clearly, under the current federal proposal, Illinois will fare poorly.

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TELECOMMUNICATIONS MODERNIZATION

 

IRMA joined an array of business and labor groups in support of SB 1381 (Sen. Bill Cunningham, D- Chicago) that seeks to modernize Illinois’ telecommunications laws. Historically, retail is the most dynamic of the business sectors as we are in a constant state of change adjusting to changes in products, technologies, and consumer tastes and desires. As technology has evolved, the pace of change has accelerated and created tremendous opportunities and challenges. Illinois retailers need a modern and flexible telecommunications system in order to compete and meet the customized experiences consumers now expect. SB 1381 passed out of the Senate Telecommunications and Information Technology Committee by a unanimous vote of 15-0-0 and now goes before the full Senate.

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BUSINESS DAY 2017

IRMA is proud to announce that our annual lobby day at the Capitol will take place on April 26, 2017. Our featured speaker at the luncheon will be Matthew Dowd. You may recognize Mr. Dowd from his work as a Special Correspondent and Analyst for ABC News where he regularly appears on their headlining shows,Good Morning America, Nightline and This Week. In addition, he contributes material for theNew York Times, the Washington Post and the National Journal, among other publications. Mr. Dowd has had a long, distinguished career as a political strategist, working on over 100 political campaigns, and is the co-author of the New York Times Bestselling Book:Applebee’s America: How Successful Political, Business, and Religious Leaders Connect with the New American Community. He has advised former President’s George W. Bush and Barak Obama as well as foundations include the Bill & Melinda Gates Foundation.

 

We hope that you will make plans to join us for what we know will be an engaging conversation not only on politics from a national perspective, but also emerging economic, spiritual and social trends that are influencing today’s political discourse. The luncheon will be followed by visits to the Capitol to interact with policymakers. Register today!