Despite 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 29^th, the primary legislative sponsors and the proponents during a morning meeting on Thursday, January 31^st, repeated during another meeting the morning of Tuesday, February 5^th 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:

*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 13^th 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.

House 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.”

The 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.

The 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.

Governor JB Pritzker was sworn in Monday, Jan. 14, as the 43^rd 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.