April 11, 2014
Speaker Madigan Takes Millionaire’s Tax Off the Table
For weeks the Chamber has been advocating against Speaker Madigan’s proposal (HJRCA 51) to asses a 3% “surcharge” on individual income tax payers with income over $1 million as it would adversely affect small businesses and kill jobs in Illinois. This week we were successful at stopping the proposal for the remainder of legislative session as it became apparent the Speaker failed to secure the votes needed to pass the legislation.
Proposed Constitutional Amendments require a two-thirds vote in each legislative Chamber to pass, which meant that the Speaker needed all 71 members of his caucus to vote in favor of the bill since GOP House members were unanimously opposed. When State Democratic Representative, Scott Drury, announced this week that he would not support the bill, Speaker Madigan indicated that he would no longer pursue the legislation.
HJRCA 51 had passed out of House Revenue Committee last week. The Senate Executive Committee held a subject matter hearing on the proposal this past Tuesday. The Illinois Chamber testified in opposition to the bill at both hearings and advocated heavily against the proposal in key legislative districts in the previous couple of weeks.
Senator Harmon’s “Fair Tax” Proposal
While a possible “millionaires” tax is off the table in the House, Senator Don Harmon continues to push for a constitutional amendment to allow for a graduated/progressive income tax in the Senate. SJRCA 40 provides what is being referred to as the “Fair Tax” legislation and would allow a graduated income tax system for both individuals and corporations. Prior proposals have applied to only individual taxpayers. His proposal would also eliminate the Constitutional 8 to 5 ratio requirement—which prevents the General Assembly from imposing tax rates on corporations that exceed the rate for individuals by more than an 8 to 5 ratio.
Senator Harmon testified at Tuesday’s Senate Executive Committee hearing that he believes that voters have a right to know what the tax brackets and applicable rates would be before they go to the polls this fall and that he would work to pass legislation this spring that would only go into effect in the event that the Constitutional Amendment is authorized by voters in November. His proposal currently calls for three tax brackets for individuals:
0 to $12,500 2.9%
$12,500 to $180,000 4.9%
$180,000 and up 6.9%
He has not indicated what rates would be applied for corporate income tax payers.
Proposed Constitutional Amendments must be passed in both Chambers by May 4th in order to appear on the statewide November ballot. Legislators will have just one week to act on SJRCA 40 when they return from the two-week break that starts Monday, April 14th. A similar House proposal for a graduated income tax, HJRCA 33, sponsored by Rep. Naomi Jakobsson, was voted down in the House Revenue & Finance Committee hearing the same day the Committee approved the “Millionaire’s Tax.”
New Employer Mandates Continue to Move Forward in Legislature
This week in the General Assembly was Third Reading Deadline and legislators worked to push out their legislative priorities in their respective chambers. Included in those were a number of Chamber opposed pieces of legislation that placed new mandates on employers.
The General Assembly finished up its work a day early, cancelling Friday session to start its two week spring break early. They return April 29th. This wraps up a busy week as the deadline for passage of bills introduced in the first chamber was April 11th. Here is the status of key issues:
Pregnancy Discrimination Protection Expansion Advances to Senate
HB 8, sponsored by Rep. Mary Flowers (D-Chicago) was approved by the House yesterday on a 65-36-1 roll call. While the vote was mostly along party lines, Rep. Frank Mautino (Spring Valley) was the lone democrat to vote “no”. Republicans Adam Brown (Decatur), Bill Mitchell (Forsyth) and JoAnn Osmond (Gurnee) voted “yes”.
After the Governor’s office made some minor revisions to the bill in amendment 3, the Administration put on a last minute push to help muscle the bill out. The Governor’s staff was on the floor lobbying the bill and the Governor visited with democrat lawmakers as the bill was being debated. Much like the Lilly Ledbetter measure at the federal issue a few years ago, HB 8 took on a celebrity tone with cheers and hugs on the House floor and pictures after the vote. The measure now goes to the Senate.
Mandated Retirement Plans Approved by the Senate
The Senate approved SB 2758 on a 30-22-2 verified roll call. This measure creates the Illinois Secure Choice Savings Program Act requiring employers of 25 or more employees to participate in a retirement savings program in the form of an automatic enrollment payroll deduction IRA, unless the employer provides a retirement plan to its employees. No republican senator voted for the bill. The following democrats also did not support the measure: Gary Forby (Benton), Bill Haine (Alton), Mike Jacobs (E. Moline), Steve Landek (Burbank), Tony Munoz (Chicago), Ira Silverstein (Chicago), Steve Stadelman (Rockford), John Sullivan (Rushville), and Donne Trotter (Chicago)
SB 2758 is being sponsored in the House by Majority Leader Barbara Currie (D-Chicago).
Ban the Box Fails to Receive Enough Votes to Pass
While there was no opposition to Rep. Rita Mayfield’s (D-North Chicago) HB 5701 after amendment 5 was adopted, the bill was one of the last to be considered before adjournment and less than 100 lawmakers were in attendance. The sponsor used a parliamentary rule that allows her to have another vote on the bill as it fell 3 votes shy.
HB 5701 provides that an employer may not inquire into or require disclosure of a job applicant’s criminal record or criminal history before the candidate has been notified that the candidate has been selected for a job interview or has been offered a conditional offer of employment.
Minimum Wage Held
Legislation to increase Illinois’ minimum wage, SB 68, sponsored by Sen. Kim Lightford (D-Chicago), was not called for a vote in the Senate. Senate Amendment 4 was added which phases in the increases as follows: $9.25 from October 1, 2014 to June 30 , 2015; $10.00 from July 1, 2015 to June 30, 2016; and $10.65 after July 1, 2016.
The deadline for passage in the Senate likely will be extended.
We will continue working to oppose in the Senate and House on these new employer mandates upon the legislatures return from Spring Break in two weeks.
Legislature Passes Reforms for two of Chicago’s Public Pension Systems
The Illinois Chamber, along with the Civic Committee of the Commercial Club of Chicago and the Civic Federation, supported revisions to the City of Chicago’s municipal workers’ and laborers’ public pension systems that was approved by the legislature earlier this week. While long cherished pension benefits are being restructured to temper the growth in future liabilities, we are concerned that the reforms may result in a property tax increase to bring fiscal stability to the two systems that must be approved by city alderman.
Much work has been done to solve the public pension crisis in Illinois and the City of Chicago. In 2011 the General Assembly took the first steps towards restoring fiscal discipline to the state’s many public employee pension systems by enacting a two tier benefit program for state employees. Last year the General Assembly passed legislation to put the state employee pensions systems on a path towards solvency. The General Assembly also approved changes to the Chicago Park District pension system, an important first step towards aiding local government with their debts.
More work is still required. The City of Chicago is approaching another “financial cliff” this summer funding its annual required payment to the Chicago teacher’s pension system and the Chicago police and firefighters pension systems. Legislative approval is required to restructure those funds as well.
Employer Action Day – Save the Date – April 30
Illinois Chamber of Commerce – NFIB
Employer Action Day
April 30, 2014
President Abraham Lincoln Hotel
701 E. Adams, Springfield
Wednesday, April 30
9:30 am-3:30 pm
9:30am – Continental Breakfast
10:00am – Welcoming Remarks
Honorable Pat Quinn, Governor of Illinois (invited)
10:30am – Reforming Our Redistricting Process
Michael Kolenc, Campaign Manager, YES for Independent Maps
11:00am – The Race for Governor 2014
Bruce Rauner, Republican Nominee for Governor
11:30am – Workers Compensation, Results of the 2011 Changes
Terri Robinson, National Council on Compensation Insurance
Jay Dee Shattuck, Illinois Chamber Employment Law Council
Noon – Lunch
12:30 pm – The Great Tax Reform Debate
Sen. Toi Hutchinson, Chair, Revenue Committee
Sen. Pam Althoff, Republican Spokesman, Revenue Committee
Rep. John Bradley, Chair, Revenue Committee
Rep. David Harris, Republican Spokesman, Revenue Committee
1:15 pm – Minimum Wage and Key Issue Updates and Advocacy
Kim Clarke Maisch, State Director, NFIB
Todd Maisch, Executive Vice President, Illinois Chamber
2:00 pm – Statehouse Visits
3:30 pm – Adjournment
Registration fee is $49.00 which includes lunch
Click HERE to register or by phone to Andrew Proctor 217-522-5512 x296