GOVERNMENT AFFAIRS
Report    

May 4, 2018

This Week in Illinois 

The Senate was the only chamber in town this week.  However, the House held several hearings in Chicago.   See below for a recap from the week.  
 
ENVIRONMENTAL BILL WOULD CIRCUMVENT PROCESS
After failing on the floor by one vote last week, a proposal opposed by the Illinois Chamber, other business groups and labor passed favorably out of the Illinois Senate. Based on a failed attempt in the State of California to prevent future pro-business environmental change,  SB 2213 (Biss) would require that Illinois environmental laws and regulations, as well as workplace safety laws, remain as strict or more stringent than federal laws in place before January 19, 2017.  
 
If this bill becomes law, it would circumvent Illinois' nearly 50-year old process of weighing and considering changes to environmental regulations, which has successfully maintained needed environmental protections despite many federal and state administration and legislative changes. This proposal would also increase uncertainty for those permit holders who may face changing requirements by rolling back the effective date of requirements to January 19, 2017.
 
In addition, this bill sends the message that the State of Illinois is unwilling to consider making changes to laws or regulations to ease the regulatory burden on its business community and further enforces Illinois' reputation as being hostile to business.  If enacted, Illinois would once again be an outlier in the nation and would have more stringent regulations than those in our neighboring states, putting us at a competitive disadvantage.

The bill passed the Senate 32-21-1. It now heads to House of Representatives.  
 
HOUSE SETS STAGE FOR RENEWED INCOME TAX HIKE
On Wednesday, the House Revenue and Finance Committee held a hearing in Chicago on a non-binding resolution supporting the implementation of a graduated income tax. As you may recall, Illinois currently has a flat tax and any change to the current system would require a constitutional amendment and voter approval. Given the deadline to pass a constitutional amendment is Monday, it is certain that the General Assembly will not pass such an amendment for voters this November.   The earliest they could approve such a matter and send the question to the voters would be in 2020. 
 
So why now?  By conducting a hearing on a the issue, the Speaker is demonstrating to the progressive side of the Democratic party that the he is serious about implementing a graduated income tax structure in the state.  
 
The hearing lasted roughly 3 hours and heard testimony from both proponents and opponents to the resolution. Keith Staats, executive director of the Chamber's Tax Institute testified in opposition to the idea of a graduated income tax, as well as the resolution.

Keith explained to the committee  that rather than amend the constitution to obtain authority to adopt a graduated income tax, there needs to be fiscal restraint and the General Assembly should engage in a comprehensive review of the Illinois tax structure with the goal of modernizing and rationalizing the current tax structure within the bounds of the existing constitution

Even the most aggressive tax increase plan that tax and spenders are willing to admit to raises only $2 billion, not even one fourth of the current backlog of the state's unpaid bills.
 
It is also worth mentioning that Connecticut Democratic Governor Dannel Malloy, who pushed for two rounds of tax increases on high earners, admits it does not work in generating consistent revenue. After the last tax increase on small businesses, Connecticut saw 2,050 tax filers that earned $200,000 or more leave the state. The net result: A loss of $2.5 billion of adjusted gross income. 

A stable flat tax is one of the few advantages that allows Illinois to compete with other states that have much better overall tax and regulatory systems. When Illinois already leads the nation in outmigration, punishing the job creators we need to restore our economy is a disaster in the making.
 
OTHER BILLS OF NOTE THIS WEEK
The Senate Insurance Committee held a subject matter hearing on both SB 2807 (Oberweis) and SB 3213 (Bush).
 
SA 1 to SB 2807 is Sen. Oberweis' "Right to Shop" legislation. It's an initiative of the Foundation for Government Accountability and modeled after legislation passed in Maine. The legislation would require insurance plans to allow beneficiaries to utilize out-of-network providers if their price for services is cheaper than in-network providers. Any cost savings would be split by the beneficiary and the health insurance plan. The Chamber has concerns with this legislation as there is no measurement of quality - just looking at a snapshot of the cost of services without regard to outcomes could set up a situation where beneficiaries receive lower quality care, resulting in more long-term costs for employers.
 
SB 3213 (Bush) is an initiative of Thresholds and would require private insurance plans to cover community-based treatments that are currently covered by Medicaid. The Chamber and interested parties have met with the sponsor and expressed concerns with importing Medicaid treatment models into the private insurance sphere.
 
LOOKING TO DO BUSINESS WITH THE STATE?
Looking to do business with the state?  On May 17, spend time learning about state contracting opportunities for your business. Whether you're a seasoned expert in procurement or you've never bid for a State contract, the day's events are designed to put you in touch with procurement experts.  For more information and the agenda for the event, please click here

Connect with the Chamber

  

If you have questions about the Government Affairs Report, contact Tyler Diers at tdiers@ilchamber.org. Do not reply to this email. 

Illinois Chamber of Commerce

2017 Government Affairs Report | Tyler Diers, Editor