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Merit Update Capitol News: August Edition

by Shattuck & Associates Consulting, Inc. 

ABC Legislative Report

August 1, 2017

 

Governor’s Veto of Budget & Tax Increase Overridden

 

At the beginning of 2017, Governor Rauner proposed a budget of $37.3B in spending, but offered no revenue increases to cover the deficit. After the failure of the Legislature to enact a budget by the end of May, the Governor called lawmakers back to Springfield for a special session. As part of his call for a special session, he joined with then GOP Leader Sen. Christine Radogno and House Re[publican Leader Jim Durkin announcing “The Capitol Compromise” which included an income tax increase to achieve a balanced budget. In addition, the compromise included spending caps, property tax relief, workers’ compensation reform, government consolidation, education reform, term limits, and pension reform.

During the fourth of July holiday weekend, the House took the final votes to override the Governor’s veto of the bills that constitute the fiscal year 2018 budget…SB 9, the revenue portion of the budget; SB 6, the spending portion; and, SB 42, the budget implementation portion.  All three bills were vetoed by the Governor which the General Assembly overrode.  The bipartisan package spends over a billion less than what the Governor proposed in February, and $3B less than what was spent in FY 2017.  Effective July 1, 2017, the individual income tax rate went from 3.75% to 4.95% and from 5.25% to 7% for corporations.  The plan through a combination of borrowing and fund sweeps pays down approximately $8 billion of the state’s backlog of unpaid bills which currently stands at $15 billion.

New Budget has no Reforms…Education Funding Snafu

The biggest objection to the income tax increase from the Governor and legislators voting against it is the lack of reforms to prevent a reoccurrence of the spend and tax approach to state government.  

The budget increases funding for K-12 education over FY17 levels by approximately $700M, plus $250 million in state pension funding for Chicago’s school system.  However, there is a drafting glitch in the budget regarding school funding that must be corrected or $6 billion in education funding is in limbo.

During the past several days, the Governor kept the General Assembly in Springfield to address the funding problem. The Governor has been outspoken in his opposition to the state money going to the Chicago school pensions. The Special Session has delivered no solutions as Senate President John Cullerton (D-Chicago) has used a parliamentary maneuver to hold onto legislation the Governor has threatened to veto. Negotiations continue today as no Springfield politician or policy-maker wants to prevent Illinois elementary and secondary schools from opening on time.

 

Prevailing Wage Legislation Signed by the Governor

 

HB  3044, sponsored by Rep. Jay Hoffman (D-Collinsville)/Sen. Ira Silverstein (D-Chicago), requires the Department of Labor to publish, no later than August 15 of each year on its official website, a prevailing wage schedule for each county in the State based upon the prevailing rate of wages investigated and ascertained by the Department during the month of June. Authorizes the Department to publish rates more frequently than once per year. Now PA 100-2

 

SB  71, sponsored by Sen. Don Harmon (D-Oak Park)/Rep. Lou Lang (D-Skokie), modifies a section concerning certification of installers, maintainers, and repairers under the Public Utilities Act to remove all references for certification of persons or entities that install, maintain, or repair new wind projects. Now PA 100-16

ABC Issues Sent to the Governor

 

HB 732, sponsored by Rep. Dan Burke (D-Chicago)/Sen. Iris Martinez (D-Chicago), provides that nothing in the Illinois Roofing Industry Licensing Act shall be construed to require an employee who performs roofing or waterproofing work to his or her employer's residential property, where there exists an employee-employer relationship or for no consideration, to be licensed as a roofing contractor. Provides that nothing in the Act shall be construed to require a person who performs roof repair or waterproofing work to his or her employer's commercial or industrial property to be licensed as a roofing contractor, where there exists an employer-employee relationship. Defines "roof repair", which excludes circumstances when a torch technique is used. Effective immediately.


 

 

HB 2664, sponsored by Rep. Will Davis (D-Hazel Crest)/Sen. Harris (D-Flossmoor), to require a contractor or subcontractor that receives any payment under contract with a State official or agency to pay each lower-tiered subcontractor and material supplier. For construction contracts with IDOT, it prohibits the contractor, subcontractor, or material supplier from offsetting, decreasing, or diminishing payments that are due to its subcontractors or material suppliers without reasonable cause. If, on 2 or more occasions with a 3-calendar-year period, a contractor fails to make payment in full without reasonable cause, the contractor will be barred from entering into State public construction contracts for a period of 6 months.

 

HB 2876, sponsored by Rep. Jay Hoffman (D-Collinsville)/Sen. Mike Hastings (D-Orland Hills), prohibits owners and operators of sanitary landfills located within a 25-mile radius of an eligible shingle recycling facility to accept disposal loads of asphalt roofing shingles that can be processed into reclaimed asphalt shingles meeting IDOT or State Toll Highway Authority specifications. Nothing in this bill prohibits or restricts a sanitary landfill from accepting for disposal asphalt roofing shingles that can be processed into reclaimed asphalt shingles meeting Department of Transportation or Illinois State Toll Highway Authority specifications but that are either co-mingled with municipal waste or rejected by an eligible shingle recycling facility. Effective immediately.

 

HB 3120, sponsored by Rep. Tom Demmer (R-Dixon)/Sen. Tim Bivins (R-Dixon), allows a public body to satisfy the Prevailing Wage Act’s notice requirement by newspaper publication by posting on the public body’s website a hyperlink to the prevailing wage schedule for that locality that is published on the official website of IDOL. Effective Immediately.

 

SB 1807, sponsored by Sen. Don Harmon/Rep. Kelly Burke (D-Evergreen Park), prohibits a municipality from entering into any new contracts, but may extend or renew a contract, with any other unit of local government, by intergovernmental agreement or otherwise, or with any business or person relating to the collecting and final disposition of general construction or demolition debris. Exempts municipalities with populations of 1 million or more.

 

General Business Issues Also Sent to the Governor

 

SB 81, sponsored by Sen. Kimberly Lightford (D-Chicago)/Rep. Will Guzzardi (D-Chicago), increases the minimum wage for an employee who is 18 years of age or older or if under 18 has worked more than 650 hours during any calendar year: to $9 per hour from January 1, 2018 to December 31, 2018; to $10 per hour from January 1, 2019 to December 31, 2019; to $11.25 from January 1, 2020 to December 31, 2020; to $13 per hour from January 1, 2021 to December 31, 2021; and to $15 per hour on and after January 1, 2022. For an employee who is under 18 years of age that has not worked more than 650 hours for an employer during any calendar year, the minimum wage shall be: (1) $8 per hour from January 1, 2018 to December 31, 2018; (2) $8.50 per hour from January 1, 2019 to December 31, 2019; (3) $9.25 per hour from January 1, 2020 to December 31, 2020; (4) $10.50 per hour from January 1, 2021 to December 31, 2021; and (5) $12 per hour on and after January 1, 2022. The legislation creates a convoluted credit against the withholding tax liability of employers with 50 or fewer employees, calculated based on the increase in the minimum wage. It is expected that the Governor will veto this legislation.

HB 2525, sponsored by Rep. Jay Hoffman (D-Swansea)/Sen. Kwame Raoul (D-Chicago), is being promoted by the House & Senate Democrats as workers’ compensation reform. It is far from it. Codification of current bad case law for “causation” and “traveling employee” merely locks employers into the court-expanded liability. In addition, it prevents employers from being able to achieve a change in the case law from future courts. The Senate changes offer some relief but is far outweighed by increased regulation and litigation that are contained in the measure.

HB 2462 (Rep. Anna Moeller (D-Elgin)/Sen. Daniel Biss (D-Skokie) Equal Pay - Wage History: Prohibits an employer from: (i) screening job applicants based on their wage or salary history, (ii) requiring that an applicant's prior wages satisfy minimum or maximum criteria, and (iii) requesting or requiring as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment that an applicant disclose prior wages or salary. Prohibits an employer from seeking the salary, including benefits or other compensation or salary history, of a job applicant from any current or former employer. 

In addition, the very concerning changes being made by HB 2462 are the undermining of employer defenses along with the expansion of civil penalties, including punitive damages and injunctive relief.  The question we ask is this legislation really about limiting what employers can ask of a job applicant or is the bill all about increasing litigation opportunities and judicial awards against employers?  

HB 2622, sponsored by Rep. Laura Fine (D-Glenview) and Sen. Biss uses employer and insurer tax dollars to capitalize the creation of a state established, mutual insurance company to compete with the over 300 insurers that already provide workers’ compensation coverage. The $10 million of startup money are tax dollars that currently go to run the operations of the Workers’ Compensation Commission. The legislation provides that the funds are a “loan” to be paid back with interest. Removing resources meant to support the operations of the Commission jeopardizes the entire adjudication of workers’ compensation for injured workers as well as employers.

HB 3092 sponsored by Rep. Avery Bourne (R-Raymond)/ Sen. Napoleon Harris (D-Chicago) streamlines the administrative investigations of employment discrimination charges including elimination of the verified response. 

SB 1720 (Sen. Biss /Rep. Lisa Hernandez (D-Chicago) increases criminal penalties for violation of the Wage Payment & Collection Act. It also bars contractors for 5 years from bidding on any state procurement by a business violating certain Illinois employment laws, any comparable laws in other states or the federal FLSA. 

SB 1905 sponsored by Sen. Ira Silverstein (D-Chicago)/Rep. Martin Moylan (D-Des Plaines) creates the Collective Bargaining Freedom Act restricting local government units from addressing ways to regulate collective bargaining agreements



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