Senate Committee Debates Unbalanced Budget Response Act
In late February, Governor Bruce Rauner addressed a joint session of the General Assembly and provided his budget proposal for the coming fiscal year. In that speech, the Governor outlined two possible budget scenarios for the legislature to consider including his preferred compromise proposal entailing budget cuts, increased tax revenue and major structural reforms designed to improve Illinois’ economy. However, if the legislature is unable to reach consensus on a compromise package, Governor Rauner requested that he be given authority and wide latitude to make the necessary and painful cuts to bring state spending in line with revenue.
Senate Republican Leader Christine Radogno and House Republican Leader Jim Durkin sponsored respective bills (SB 2789 and HB 4521) deemed the “Unbalanced Budget Response Act” that would provide the Governor with the authority and procedures to unilaterally make nearly $4 billion in budget cuts to balance the budget. Debt service payments, general state aid for K-12 education, and Early Childhood Education funding would be on the only programs exempt from budget cuts. If enacted, Governor Rauner would have the unlimited ability to transfer funds among budget lines, impose emergency rules to limit or adjust services, payment rates, expenditures, and eligibility criteria.
Members of the Senate Executive Committee held a subject matter-only hearing this week to debate the Unbalanced Budget Response Act. While both Democrat and Republican lawmakers expressed opposition to this type of plan, the hearing often plunged into a contentious blame game. Republicans faulted Democrats who have controlled the legislature for twelve years while the debt has skyrocketed and Democrats blaming Governor Rauner for holding the budget hostage to enact structural reforms. Despite the finger pointing, both parties expressed a desire to sit down and work out a compromise budget solution.
Senate President John Cullerton noted that Governor Rauner already has line-item veto authority to make changes in the budget and asked why the plan does not protect pension contributions from being cut at a time when Illinois has a $111 billion unfunded liability.
Illinois is now in its ninth month without a state budget and the mountain of unpaid bills totals nearly $7.5 billion according to the State Comptroller. The state is on pace to spend more than $36 billion in the current year with estimated revenue totaling only $32 billion and there appears to be little hope for a quick budget resolution.
Fees & Taxes Proposed for Business Jumpstart Program, 21st Century Workforce
Senator Mattie Hunter (D-Chicago) introduced an amendment to SB 259 this week that would require every employer in Illinois to pay a new fee of $500 to $1,000 annually to the Department of Employment Security to operate Project Jumpstart under the 21st Century Workforce Development. This program is designed to provide employers with the opportunity to hire pre-screened candidates for pre-probationary jobs with wage support from the state. Preference would be given to veterans, unemployed workers who have exhausted benefits, and young adults in summer youth employment programs.
A second amendment offered by Senator Hunter to SB 512 would eliminate the “non combination rule” to generate $25 million for the 21st Century Workforce Development Fund.
The IMA is strongly supportive of ensuring that Illinoisans have the skills to success in the workforce but is opposed to this new fee on employers. The best way to increase job opportunities for Illinois residents is by fostering a strong economy where employers can create more jobs. The IMA Education Foundation is leading the way for the manufacturing sector by partnering with high schools and community colleges to establish credentialing programs that provide skills so there is a qualified pipeline of workers.
The amendment to SB 512 has been assigned to the Senate Revenue Committee while the amendment to SB 259 has not yet been sent to a substantive committee.
Data Breach Legislation on Governor’s Desk
Governor Bruce Rauner is expected to sign changes to the Personal Information Protection Act after it passed both the House of Representatives and Senate on unanimous votes. Sponsored by Senator Daniel Biss and Rep. Ann Williams, HB 1260 adds medical information, health insurance information, and unique biometric data to the list of personal information that must be protected under the data breach law.
State agencies that suffer a data breach impacting more than 250 Illinoisans must report that information to the Attorney General within 45 days. They must include the type of information compromised, the number of impacted residents, any steps taken to notify consumers, and the date of the breach.
Last year, the IMA opposed data breach legislation (SB 1833) that was initiated by the Attorney General. It narrowly passed the General Assembly before being amendatorily vetoed by Governor Rauner. The compromise contained in the current legislation that passed unanimously includes those changes sought by the Governor. If signed into law, the changes would take effect on January 1, 2017.
House Supports Quarterly Unemployment Insurance Tax Payments
Members of the Illinois House of Representatives unanimously approved a non-binding resolution (HR 77) this week calling on the Illinois Department of Employment Security (IDES) to implement a quarterly payment plan for unemployment insurance taxes. The IMA strongly supports this concept and has initiated legislation (HB 2597) that would implement this program if passed by the General Assembly and signed into law.
Many small IMA member companies have asked for relief from the cash crunch that comes in the first quarter of the year when the entire UI tax is assessed and paid. Unemployment insurance taxes are assessed in on the first $12,960 in wages. If the average tax is $800 per employee for example, an employer with 20 workers would have to pay the entire $16,000 in the first quarter rather than spreading four equal payments over the course of the year.
The IMA is pleased that the House unanimously approved this non-binding resolution and we plan to continue working with IDES to make sure that the revenue structure would not impact the Trust Fund balance or bond covenants.
IMA Hosting 2nd Annual Midwest Environmental Compliance Conference
Mark your calendars and plan to attend the 2nd Annual Midwest Environmental Compliance Conference in Rosemont on November 1-3. Created by the IMA and our sister organizations in U.S. EPA Region 5, this conference brings together the top regulators and staff from the United States Environmental Protection Agency and each state agency for two days of seminars.
Robert Kaplan, Acting Regional Administrator for Region 5, has already committed to attend and speak noting that last year’s conference “was very valuable.” In the first year, more than 350 companies from six states attended this premiere event.
The IMA is looking for hosts and sponsors who will be guaranteed speaking slots if interested and we are putting together the agenda. Please contact the IMA if you have potential topics that you would like addressed.
Cook Political Report’s Amy Walter to Keynote IMA Business Day!
The IMA is pleased to announce that Amy Walter, national editor of the Cook Political Report will keynote Business Day on Wednesday, May 11 in Springfield. Attendees can look forward to an astute and engaging discussion about the President race and national elections that will determine control of the U.S. Senate and Congress.
Over the past fourteen years, Amy has built a reputation as an accurate, objective, and insightful political analyst with unparalleled access to campaign insiders and decision makers. Known as one of the best political journalists covering Washington D.C., she is the nation editor of the Cook Political Reportand the former political director of ABC News. She is an exclusive panelist on NBC’s Meet the Press and a regular panelist on PBS’ Washington Week with Gwen Ifill and Fox News’ Special Report with Bret Baier.
Please visit the IMA website and sign up to sponsor or attend this year’s Business Day that will include the luncheon program, Capitol visits and gala reception in the evening. Business Day is one of the best-attended events in Springfield and more than 120 lawmakers attend every year along with key staff and agency officials.