The Illinois General Assembly wrapped up its regular scheduled spring session last night without any cloture on the state's ongoing budget impasse.
Instead of passing meaningful, pro-growth reforms, the Illinois General Assembly went the opposite direction spending their final hours of session approving an increase in the state's minimum wage (SB 81). A measure that will incrementally increase the state's minimum wage to $15 per hour by 2022 for those over the age of 18 and to $12 per hour by 2022 for those under the age of 18.
Senate and House Democrats abandoned bi-partisan negotiations on reforming our state's workers' compensation system in favor of "fake" workers' compensation reform. As amended, HB 2525 would not lower workers' compensation premiums, but potentially add costs to the system. The legislation's main features will create higher costs for employers due to more government regulation and litigation. The provisions in the legislation intended to reduce costs will not offset the increased, negative impact that the other provisions will cause.
To put it simply, with this bill there will be more government, more friction and more litigation that all boils down to higher workers' compensation costs.
Additionally, House Bill 2622 uses $10 million of employer and insurer tax dollars to capitalize the creation of a state established, mutual insurance company. This $10 million is diverting one third of the funds currently used to run the workers' compensation system in Illinois. Consequently, claims by injured workers likely will be delayed. Employer costs for temporary benefits likely will increase. With over 300 insurers already competing in the Illinois workers' compensation market, HB 2622 is not about competition but a political diversion that will have serious negative consequences for injured workers and Illinois employers.
The bills will now be sent to the governor for final consideration where we will be urging the governor to veto both measures.
However, not all was bad. The Chamber was instrumental in defeating two pieces of legislation that were being pushed by special interest groups who make a living off filing lawsuits against businesses large and small. The "Right to Know"
bill would have required businesses large and small to keep track of the names of every third party that receives personal information about an Illinois consumer. Along with that list of names, businesses would have to keep a log of all the categories of personal information involved - potentially costing Illinois businesses thousands of dollars to reconstruct IT systems. The bill was called for a vote in the House this week but fell five votes short of passage in the Illinois House.
The Chamber also contributed to the defeat of another anti-consumer, anti-technology bill, otherwise known as the "geo-location bill." This bill would have required mobile applications to post complex and confusing prompts before consumers can use mobile applications. The bill would have put businesses of all sizes at risk of frivolous lawsuits by unfairly voiding terms of service agreements for simply forgetting to include a minor piece of information in a service contract. The Chamber testified in opposition to the bill on the same day it failed by one vote in the House Cybersecurity Committee.
Both the "Right to Know" bills and the "geo-location" bill were more about setting up a regulatory system that drives litigation over innovation and putting plaintiff attorney's above tech investment. The defeat of these bills will send a strong message to tech investment and business that Illinois remains open for innovation.
The General Assembly approved meaningful procurement reform that will create a more friendly environment for private industry to enter into state contracts with the state. Two key provisions for employers included the best value program and allowing cooperative purchasing agreements. The Chamber supports SB 8. It now heads to the governor's desk.
Both chambers also approved the Chamber-supported 2017 Illinois Telecom Modernization bill that updated Illinois law to attract more investment in high-speed internet networks that power consumers' lives. If approved by the governor, this law will ensure customers can connect to modern networks, strengthen and expand wired and wireless high-speed internet networks, help create jobs, and improve 9-1-1 services throughout the state.
Adding, no significant tax omnibus passed favorably out of both chambers this session. However, HB 160 (Zalewski) did pass the House this week 63-50-0.
However, Representative Currie filed a motion for reconsideration and the bill did not move to the Senate. As amended by amendments 2 and 3, HB 160 retains the clawback provisions that would require the repayment of any state tax credits exemptions, grants and loans if a recipient business ever moves all or part of its business operations and the jobs created by its business out-of-state. The corporate income tax rate cut was eliminated by amendment 3, as were provisions in the EDGE credit dealing with data centers. The Chamber is opposed to the bill as amended.
In addition, the Chamber-opposed "investment management tax" (SB 1719), did pass favorably out of the House Revenue Committee yesterday but was never called for a vote on the floor. The bill would add a 20% gross-receipts tax on investment management services. We are hearing this tax may be included in an overall tax omnibus bill in the House. The Chamber is unalterably opposed to such an idea.
Both the House and Senate will be in continuous session for the foregoing future. As a reminder, the state's fiscal year ends June 30th. Any votes on legislation during a continuous session require a 3/5 majority to pass.
