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Archive for the ‘legislative affairs’ Category
#AuroraChamber News for Members
Tuesday, February 12th, 2019Minimum Wage Bill Passes Senate Along Party Lines
Monday, February 11th, 2019Despite concerns by suburban and downstate legislators in particular over the impact on the state budget (over $1 billion) and the impact on suburban and downstate employers, the Senate passed a proposal to increase the Illinois starting wage to $15 over 5 years as contained in Senate Amendment #1 to Senate Bill 1 (Sen Kimberly Lightford, D- Westchester). The 39-18 vote was along strictly partisan lines and came only after Governor JB Pritzker spent 30-minutes in the Senate Democratic caucus imploring a united front for his first major policy initiative. This action comes despite two very reasonable alternatives put forward by IRMA under the belief that an increase is inevitable, everyone was genuine in their desire to turn the page on the last four-years and seek genuine compromise, and the two alternatives IRMA put forward were supported in those respective states by the same proponents who are pushing the $15 wage increase in Illinois.
IRMA first suggested following the Oregon model where a different wage would be paid in different parts of the state. For example, $15 would be paid in Chicago, a lower wage in the collar counties, and a yet lower wage downstate. The Oregon model makes the most sense for a state as economically and geographically diverse as Illinois in that no other location in Illinois enjoys the economic benefits of Chicago. Nowhere else has over 55 million tourists per year, nowhere else has millions commuting into the city center every day spending money, nowhere else has the concentration of business headquarters, and nowhere else has the concentration of wealth. However, several legislators and the Governor’s Office expressed reservations over voting for $15 for some parts of the state but not others.
As an alternative, IRMA put forward the New York model. New York increased the starting wage in New York City over 4 years. The starting wage in the two counties on Long Island and Westchester County were increased to $15 over 6 years, and the starting wage in the rest of New York over 10-12 years (increased by CPI until reaches 15). While less sensitive to the economic diversity of New York and Illinois, it is an apt example for Illinois. The city of Chicago began increasing its minimum wage in 2015. If SB 1 is enacted as is, employers in the city of Chicago will have been given 10 years to get to $15 per hour. Employers in the suburbs and downstate will only be given 5 years. It raises the question as to why suburban and downstate employers are not being given the same consideration as employers in the city of Chicago. For those who say ‘well, the city raised the wage on its own, the answer is proponents don’t get it both ways. They can’t oppose preemption and then not count the actions of the city of Chicago. Employers don’t get that luxury.
Claims that alternatives were never presented are simply false. These alternatives were provided to the Governor directly the evening of Tuesday, January 29th, the primary legislative sponsors and the proponents during a morning meeting on Thursday, January 31st, repeated during another meeting the morning of Tuesday, February 5th and shared with other legislators and legislative staff throughout the week. Clearly, given the facts noted above, there does not appear to be a genuine desire for what would otherwise be considered an easily achievable compromise.
The proponents claim that a tax credit inserted into the bill will help small business. In fact, the tax credit as proposed is inadequate to soften the size and pace of the proposed increase and applies to very few employers. The following would NOT receive the credit:
- Any employer with more than 50 full-time equivalent employees. The legislation does not state what constitutes ‘full-time” so it is impossible to accurately calculate. However, given the fact the proposal started with a firm cap at 50, we can expect a definition that keeps close to that number.
- If you are a franchisee and have more than one store OR file as part of a unitary group (e.g. you are a franchisee, run some other type of business and they file taxes together) you would not be eligible for the tax credit.
- If your average wages paid are less than the same quarter the year before, you are not eligible for the credit. For example, if you are forced to cut hours worked, lay off workers, or if workers are absent, your average wages could easily drop.
- Employers with 5 or fewer employees are eligible for a credit for a year longer than everyone else. While the proponents claim this applies to 48% of all employers, they don’t tell you that the vast majority of that 48% is comprised of employers where the only employee is the employer. According to the Illinois Department of Employment Security (IDES), in the City of Chicago, such businesses account for 6.6% of employers. According to the US Small Business Administration, 80% of all employers fall into this category. Therefore, 1.4% – 2.0% of employers in Illinois would qualify.
Clearly, the tax credit is nothing more than a talking point.
As passed by the Senate, SB 1 increases the starting wage as follows:
18 years and older |
Under 18 years of age* |
||
|
|
|
|
YEAR |
WAGE |
YEAR |
WAGE |
1/1/2020 |
$9.25 |
1/1/2020 |
$8.00 |
7/1/2020 |
$10.00 |
7/1/2020 |
|
1/1/2021 |
$11.00 |
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$8.50 |
1/1/2022 |
$12.00 |
|
$9.25 |
1/1/2023 |
$13.00 |
|
$10.50 |
1/1/2024 |
$14.00 |
|
$12.00 |
1/1/2025 |
$15.00 |
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$13.00 |
*If the employee who is under 18 years of age works more than 650 hours for the employer during a calendar year, then the employer must pay the full minimum wage regardless of the employee’s age.
While it looks like a six-year phase-in, it is really a five-year phase in because employers will experience a $2.75 per hour increase (33.3% increase) in the first 366-days. For an employer’s planning purposes, a year-and-one-day, is not two years. This phase-in is an average annual increase to an employer’s largest or second-largest line-item of over 16% per year for a total increase of 81.8% over 5 years.
The House Labor & Commerce Committee is scheduled to consider SB 1 on Wednesday, February 13th at 2:00 p.m.
IRMA members should register their opposition by filing a slip at this link. Additionally, IRMA members are encouraged to continue to register their opposition per the action alerts IRMA has distributed.
$15 Minimum Wage Passes Senate
Monday, February 11th, 2019The Senate approved SB 1 (Lightford) by 39-18. The bill would increase the minimum wage for those above the age of 18 from $8.25 (current) to:
-$9.25 by January 1, 2020
-$10.00 by July 1, 2020
-$11.00 by January 1, 2021
-$12.00 by January 2022
-$13 by January 2023
-$14 by January 2024
-$15 by January 2025.
The bill would also make similar increases for those under 18 with the final wage being $13 per hour by 2025.
The bill includes a tax credit for employers with less than 50 employees. However, as drafted, the credit is not as straightforward as it is being sold.
Business organizations — including the Illinois Chamber, Illinois Retail Merchants Association, and others — remain opposed. The Senate is expected to put SB 1 up for a vote in the House this week. Members are encouraged to reach out to their lawmakers and urge them to vote NO on any minimum wage increase that does not include employer protections. Members can reach their legislators by either writing or calling their offices here.
Illinois Pushes Toward $15 Minimum Wage
Wednesday, February 6th, 2019An effort to increase Illinois’s starting wage to $15 has gained early traction driven by the desire of Governor J.B. Pritzker to achieve passage sooner rather than later. Many Illinois residents will recall that the Governor made a $15 starting wage one of the cornerstones of his campaign.
Wednesday, during a subject matter hearing of the Senate Labor Committee, IRMA testified on the subject. It was noted that while IRMA is philosophically opposed to artificially imposed starting wages, we recognize that an increase is going to occur.
Proponents have noted that $15 starting wages in places like Seattle have not apparently led to significant job loss although research does point to lost hours particularly for low or unskilled workers. However, as even pro-wage increase researchers have noted, no one knows what the impact will be outside of urban centers like Seattle, New York City or Chicago and you cannot assume the experiences of a thriving city center will be the same experiences elsewhere as there are major economic differences. IRMA noted that the suburbs and downstate do not enjoy the concentration of economic dynamics that such urban centers enjoy. For example, Chicago benefits from robust tourism, a concentration of business headquarters, the daily influx of millions who spend money, and a concentration of wealth. No other location in Illinois even comes close to enjoying that combination of benefits.
IRMA also pointed to states like Oregon and New York that appeared to recognize such differences and took geographic-based approaches to increasing their starting wages.
In Oregon, the starting wages are higher in the Portland metro area, somewhat lower in their suburbs, and then even lower in the rest of the state. This is an approach that recognizes the substantial cost-of-living differences. It also recognizes the substantial differences that will occur between Illinois and every border state. With retail increasingly able to serve consumers regardless of where they are located, and 2/3rds of Illinois’ population within a 40-minute drive of a border, those disparities will have impact on employers.
New York increased the starting wage to $15 quickly in New York City, a bit more slowly in Long Island and Westchester County, and much more slowly in the rest of the state. In both cases, the increase to $15 started at a much higher rate in New York City. Similarly, Chicago will be at $13 July 1 while Cook County will be at $12. That is a significantly different starting point than the rest of Illinois which is currently at $8.25. A phase-in such as five years for the City of Chicago and Cook County, seven years for the collar counties and 10 years for the rest of the state is more realistic but will still be a large cost item for employers.
Even if the Illinois starting wages were increased from $8.25 to $15 over a 10-year period, the average annual increase would be just over 6% to the largest or single largest expense item of retail employers. That is why the tax credit currently proposed by the advocates to soften the blow on smaller employers is inadequate if policy makers insist on not taking an Oregon-like approach. First, the tax credit as currently proposed, only applies to employers with fewer than 50 employees at all locations. As IRMA noted, a single retail store can have more than 50 employees. Second, it treats franchisees as if they are owned by the franchisor. Franchisees are, in fact, small businesses so this inequality must be repaired. Third, the tax credit itself is not robust enough.
Additionally, the Illinois probationary/training wage allows employers to pay a trainee $0.50 less per hour than the current minimum wage. That was not very adequate at $8.25 but it is wholly inadequate at $15.00. The probationary/training wage needs to be in the neighborhood of $2.00 per hour less for the 90-day probationary/training period if employers are going to have any incentive to take the risk of hiring no-or-low-skilled employees.
While there are other issues, these are the primary issues under discussion. Additional considerations exist about impact on taxpayers. At $15, the State budget will be negatively impacted a few hundred million annually not to mention at least that kind of impact on local governments, higher education institutions, K-12 schools, park districts, etc.
Aurora Chamber Joins Ill. Chamber, Others in Release of Study on Data Centers
Wednesday, February 6th, 2019Recently, the Chamber Foundation joined our partners in releasing a report that showed Illinois has had significantly weaker growth in data center markets than surrounding states that have data center incentives.
The report, published by Mangum Economics, compares the disparity of data center capital investment growth and jobs created between Illinois and neighboring and competitive states and examines the state tax policies used to attract and grow the industry.
Today, 30 states have incentives specifically targeted at attracting data centers as part of expanded economic development efforts. Since 2012, 24 states have enacted legislation aimed at capturing a greater percentage of data center growth.
Illinois should consider these tax incentives to ensure the direct and indirect benefits from the construction, operation, and ancillary growth that occurs over the lifetime of these facilities.
Leader Durkin, House Republicans Introduce Fair Maps Amendment
Sunday, January 27th, 2019House Republican Leader Jim Durkin announced this week that he, along with the entire House Republican caucus, has filed HJRCA 10, a constitutional amendment for the independent drawing of legislative maps.
“Governor Pritzker has urged the legislature to create an independent commission to draw legislative maps, so House Republicans are proposing to do just that,” said Leader Durkin. “Not only are we answering the Governor’s call on this issue, but we are also prepared to provide the majority of the votes required to pass this out of the House and on to the Senate. So I call on my Democratic colleagues to join us and Governor Pritzker in supporting the independent drawing of legislative maps and pass HJRCA 10 this legislative session.”
HJRCA 10 would establish an independent commission, comprised of 11 members, charged with proposing a legislative map. The commission would be required to hold public hearings both before and after releasing a proposed plan.
The map would need to receive the affirmative vote of at least seven commissioners, including two from each political party whose candidate for Governor received the most and second-most votes and two commissioners not affiliated with each such political party.
If the commission fails to adopt a new map by June 30 of the year following the decennial census, the Chief Justice of the Illinois Supreme Court and the next senior Justice, not of the same party as the Chief Justice, will be required to appoint a Special Commissioner for Redistricting that must adopt and file a map by August 31 of the same year.
Leader Durkin’s Fair Maps proposal quickly won the endorsement of the Chicago Sun-Times editorial board, which stated: “The makeup of the Illinois Legislature — and of every state legislature — should reflect the will of the voters, not party bosses.”
#EconomicPulse, Business Registration, More from #AuroraChamber
Tuesday, January 22nd, 2019
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Senate Democrats Announce Leadership Positions
Tuesday, January 22nd, 2019The Senate Democrats will continue to be led by Senator John Cullerton. Senate President Cullerton announced the following leadership team:
- Senator Kimberly Lightford, Majority Leader
- Senator Terry Link, Assistant Majority Leader
- Senator Anthony Munoz, Assistant Majority Leader
- Senator Don Harmon, Assistant Majority Leader
- Senator Iris Martinez, Assistant Majority Leader
- Senator David Koehler, Assistant Majority Leader
- Senator Maggie Hunter, Majority Caucus Chair
- Senator Suzanne Collins, Majority Caucus Whip
- Senator Martin Sandoval, Majority Caucus Whip
- Senator Linda Holmes, Majority Caucus Whip
Majority Leader Lightford replaces former Majority Leader James Clayborne who announced his retirement last spring and did not seek re-election to the Senate.
Wheeler, Wehrli, Batinick Namedx to House GOP Leadership
Tuesday, January 22nd, 2019The House Republicans will continue to be led by Representative Jim Durkin. Leader Durkin announced the following leadership team:
- Representative Dan Brady, Deputy Republican Leader
- Representative Tom Demmer, Deputy Republican Leader
- Representative Avery Bourne, Assistant Republican Leader
- Representative C.D. Davidsmeyer, Assistant Republican Leader
- Representative Norine Hammond, Assistant Republican Leader
- Representative Michael McAuliffe, Assistant Republican Leader
- Representative Grant Wehrli, Assistant Republican Leader
- Representative Keith Wheeler, Assistant Republican Leader
- Representative Tim Butler, Republican Conference Chair
- Representative Mark Batinick, Republican Floor Leader
Representative Avery Bourne is set to become the youngest Republican Leader ever and other new leaders include C.D. Davidsmeyer, Tim Butler and Mark Batinick. Representatives Wheeler and Wehrli were appointed to leadership posts last year after the early retirements of Representatives Bellock and Hays.
Gov. Pritzker Inaugural Address Lays Out Agenda
Tuesday, January 22nd, 2019Governor JB Pritzker was sworn in Monday, Jan. 14, as the 43rd Governor of Illinois along with the other five Executive Branch officers. During his speech, the Governor shared his vision to work together to create boundless opportunities and fulfill the state’s possibility and promise. The Governor made clear that he will move swiftly on priorities for working people so that the government works for the people and will confront the state’s deep challenges.
Most of the promises made during the inaugural speech were promises made during the campaign. These include:
- Revitalizing the “hollowed out” state government;
- Promoting policies that support paid parental leave;
- Promoting policies that support affordable child care;
- Creating a progressive income tax;
- Changing the regressive property and sales tax;
- Delivering high speed broadband internet coverage to everyone;
- Funding a Capital bill;
- Signing Illinois as a member of the U.S. Climate Alliance which upholds the goals and ideals of the Paris Climate Accord;
- Instituting a $15 minimum wage; and,
- Legalizing the sale of cannabis.