Buckle up. This week's mailbag is one of the bleakest I've written. It's Quarantine Day 537, it's snowing in Chicago, the XFL folded (RIP St. Louis BattleHawks) and based on the President's timelines we are in for more of this for a while.
The House and Senate were not in session this week. It is very unclear when the General Assembly will return to Springfield. Chamber leaders have said to expect a very limited agenda when they do return, one that focuses on the budget and COVID-19 relief.
There has even been talk that the General Assembly may not meet until November for a very robust veto session. The budget year ends June 30th, so this would require operating without a budget for several months. If you'll recall, the state went without a budget for several years during the Rauner administration. Around 90% of a typical budget was still spent with continuing appropriations and consent decrees. State revenues have cratered during the pandemic (more on this in a bit).
Punting on a budget would allow lawmakers the advantage of avoiding a difficult vote on a budget that decreases prized, and politically popular, spending items in an election year. Waiting until after the election would also allow them to know whether they could count on the tax increases from Governor Pritzker's progressive tax hike amendment. Further complicating matters, if legislators can't return to Springfield by June 1st, a supermajority would be required to pass a budget. This would strengthen the bargaining power of the two minority leaders. The Chamber will continue to keep you informed on timelines.
More on the Budget
The COVID-19 pandemic has devasted state revenues. Other midwestern states have several months of revenues set aside for a time like this. In no surprise to anyone paying attention, Illinois has a laughably small emergency fund ($58,000 at last check).
Let's take a look at exactly how deep a revenue hole the state is facing. Experts predict a $2.7 billion loss in revenues for the fiscal year ending in June. That's about a 6% reduction but because we are so late in the fiscal year, that would require slashing budget lines by 30% for the remainder of the year. Governor Pritzker says to expect between $6.2-$7.4 billion for the fiscal year beginning in July. That assumes a relative return to normalcy, however, and the longer the state remains shuttered for business the less confident we can be about this return to normal. Some of our small businesses are likely to never reopen without relief, and soon.
What about the CARES act? The federal government did provide money for the state but only for COVID-19 related costs. Nothing was provided for shrinking revenues.
Uniform Law Commission on Data Privacy
The Uniform Law Commission drafts model laws for the states to follow to help add uniformity to state statues across the country. You have probably heard of their work on the Uniform Commercial Code which serves as a foundation for commerce and the bane of 1L existence in law school.
They are working on a model data privacy law for states and have recently released a draft. The Illinois Chamber is supportive in general of efforts to provide consistency on this issue across state lines as so much of what happens in the field involves interstate commerce. Having to abide by widely different laws in say Arkansas, California and Maine imposes a burden on tech companies that will have users across the globe.
However, this draft includes a private right of action. Private rights of action are abused in plaintiff-friendly Illinois (see the BIPA lawsuit abuse) and this issue is a non-starter for the Illinois Chamber. If you'll recall, the much-discussed California law does not include a private right of action. The state of Washington bill, in which the Washington House tried to insert a PRA at the last minute, was defeated over this very issue. The Chamber does not believe the business community in Illinois should accept any proposal that is to the less business-friendly than the laws of California.
Illinois Workers Compensation Committee Emergency Rules Unfairly Impact Businesses
Many of you are aware of a massive overreach in administrative rule-making undertaken by the Illinois Workers Compensation Commission (IWCC). Just last evening, the commission voted to approve a rule that would all but guarantee workers compensation benefits for any worker who claims a COVID-19 related illness. This is an unprecedented expansion of the
Illinois Occupational Diseases Act
. This expansion was undertaken without consultation with the employer community, is clearly beyond the statutory authority granted to the WCC, and was rushed through in clear violation of other statutes.
The Chamber is consulting closely with our partners in the business community in determining an appropriate and aggressive response to this government overreach. We have drafted a letter to the members of the Joint Committee on Administrative Rules urging JCAR to suspend the IWCC Emergency Rules. You can see the full letter here If you would like to sign on to the letter, please contact
Working Groups Finalized
The Illinois House finalized its membership for legislative working groups on a variety of different topics this week. The Senate had previously completed membership assignments and has begun meetings. Notable House Working Groups include Economic Recovery (chaired by Reps. Zalewski, Hoffman and Hernandez, L.). The Senate has an Economic Recovery (Koehler) and a Regulatory Relief (Martinez) group.
Governor Pritzker and Midwest Governors Form Regional Coalition
Governor Pritzker and a group of six other midwestern governors announced yesterday that they are working together to determine when to best start opening up our economies and easing the stay at home restriction. Other states in the compact are Michigan, Ohio, Wisconsin, Minnesota, Indiana, and Kentucky. Their key indicators of when to act largely mirror those announced yesterday by the White House.
The Chamber is consulting with the governor's administration on business relief. Please send us any information or suggestions we can use to advocate on your behalf.
After a week of rough news we also want to share your good news. Please send any announcements or positive stories on your business to email@example.com.