Budget Negotiations Continue
With less than two weeks remaining in the scheduled legislative session, the Governor’s office and a bipartisan group of lawmakers continue to haggle over details about a spending plan for the state that would take effect on July 1.
Last year, Democrat lawmakers along with a small cadre of Republicans, joined together to pass a state budget over Governor Bruce Rauner’s veto. Last year’s budget totaled $36.054 billion including more than four billion dollars in new revenue that flowed into state coffers as a result of the permanent income tax increase. Despite the tax hike however, the state’s budget was out of balance by nearly $1.6 billion. Lawmakers did authorize bonding to pay down old bills resulting in a significant reduction in the backlog and lower interest rates.
The Governor’s Office of Management and Budget (OMB) is engaging with the budget working group on a nearly daily basis to finalize spending numbers. However, they have yet to agree on a revenue estimate that will set the actual spending level allowing them to then dictate programmatic funding levels.
The Commission on Government Forecasting and Accountability (COGFA), the legislative budget arm, is anticipating total revenue of $37.86 billion while OMB predicts that the state will have an additional $100 million. With increased spending pressures from employee salaries, health care costs, and other increased spending, the Governor and lawmakers will need to make significant spending reductions to balance the budget or find additional revenue through fund sweeps or new revenue sources.
The IMA continues to push for a balanced budget that recognizes the needs of manufacturing especially as it relates to education & workforce development and tax policy.
Workers’ Compensation Proposal on Medical Costs Introduced
Members of the House Labor & Commerce Committee will hear a legislative initiative of the State Medical Society that will result in higher workers’ compensation rates for Illinois employers if enacted into law. Under the proposal (SB 904, House Amendment #1) that was just filed this week, businesses and insurance companies will see interest rates double to 24 percent per year on medical claims while facing penalties of up to $1,000 per claim for failure to comply with the electronic billing requirements.
Rep. Jay Hoffman (D-Collinsville), chair of the House Labor Committee, is also sponsoring legislation under the guise of reform that would actually lock the “a cause” standard in law that forces companies to pay for injuries even if they are not primarily responsible. It would force an employer to sue a worker’s previous employers to offset any cost of the injury or medical treatment. In committee this week, Chairman Hoffman advanced his workers’ compensation bill (SB 2863) out of committee but pledged that it would not move in its current form and an amendment would be forthcoming.
It’s likely that the Democrats will try and amend the medical community language onto their workers’ compensation bill to try and increase its chances of passing the legislature. Last year, Democrats passed two workers’ compensation bills over objections from Republicans and the business community that were ultimately vetoed by the Governor.
The IMA opposes any legislation that will further increase costs and regulations on Illinois employers that currently pay the eighth highest cost of workers’ compensation in the United States.
Drone Legislation Advances
Legislation supported by the IMA that will pre-empt local governments from imposing local regulations on unmanned aircraft systems or drones passed unanimously out of the House Transportation Committee this week and is one step from the Governor’s desk. The idea of state control emanated from the Drone Task Force created in 2016.
Drones are widely used by manufacturers, insurance, agriculture, realtors, and other business sectors. Federal regulations govern the use of drones for both commercial and personal use including pilot requirements, airspace rules, and registration. Individual states have the ability to impose some additional requirements such as bans on flying over certain types of facilities or recording and surveillance. However, these regulations should be done at the state level as opposed to a patchwork of regulations across Illinois.
SB 3291 (Clayborne/Evans) passed the Senate unanimously as well. If the bill passes the House of Representatives, it will move to the Governor for his signature.
IMA Education Foundation Advances Legislation
Two key initiatives of the IMA Education Foundation, designed to support statewide efforts to prepare a high-quality workforce for 21st Century manufacturing, advanced unanimously this week.
Under HB 4858, high schools and community colleges with programs of study in Industrial Arts would be able to receive grants authorized by the Industrial Development Assistance Act to pay for updated facilities and equipment. The bill is critical if the state’s education system is to keep pace with manufacturing’s technological advancements. The bill passed the Senate 54-0-0 and heads to the Governor’s Office for his signature.
HB 5247 passed out of the Senate Committee 8-0-0 this week and advances to the Senate floor for a full vote. The bill requires the State Board of Education to initiate rulemaking to waive non-academic mandates that will allow those aged 16 or older to be hired by employers as apprentices. This legislation allows students to become apprentices at the same age as their global counterparts while assuring they complete the academic requirements for high school graduation.
Human Rights Act Applicable to All Employers
The Senate acted this week to pass legislation making the Human Rights Act applicable to all employers in Illinois. Currently, the Human Rights Act only applies to businesses with fifteen or more employees. Over the past few decades, Illinois lawmakers generally exempted small employers from laws that created costly and burdensome mandates. HB 4572 (Guzzardi/Castro) seeks to undo those exemptions and would require small businesses to suddenly comply with all of these rules and regulations if signed into law by the Governor.
Manufacturers Stop Anti-Energy Bill in House Committee
A bipartisan group of lawmakers in the House Agriculture & Conservation Committee stopped an effort by environmental activists to impose burdensome and costly new rules on energy development after it narrowly passed the Senate two weeks ago. Energy development, including hydraulic fracturing technology, is resulting in lower costs for Illinois businesses and residents.
SB 3174 (Koehler/Welch) sought to impose a confusing and duplicative set of rules on oil and natural gas producers in Illinois. While Illinois also has a High Volume Hydraulic Fracturing Act, this legislation would have imposed a new set of regulations on small oil and gas companies that are located primarily in southern and central Illinois.
The IMA appreciates the leadership of Chairman Jerry Costello (D-Red Bud) and Spokesman Charlie Meier (R-Highland) who understood the negative consequences of this legislation and assigned it to subcommittee for future study.