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2009:
Can Illinois government look beyond itself and help us improve the economy?
After an unprecedented two years of gridlock, many issues confront the 96th
General Assembly: issues that were never resolved during the toxic
Blagojevich administration (some of which have mushroomed due to neglect),
and new issues arising such as our nation’s recession.
The Illinois Chamber of Commerce anticipates several pressing issues that
will pose challenges and opportunities in Illinois this year. We believe the
focus should be on turning around the economy and that our lawmakers should
do all they can to help business do that, while their focus will likely be on
government; until we in the business community can convince them otherwise,
the legislature is indicating these major issues will be the early
priorities.
The first
challenge is the budget. Comptroller Dan Hynes estimates
Illinois’ total deficit to be approximately $9 billion. That includes $4.5
billion in unpaid bills, $2 billion in Medicaid investment, a $1.3 billion
revenue shortfall for 2009 because of the economy, and our $1.2 billion pension
obligation.
Many budget analysts, including the Illinois Chamber, believe the deficit
doesn’t have to be $9 billion; prudent choices could carve as much as $2-3
billion from this figure. While there is much talk about taxes, there are
several potential pieces of revenue that could bring that down even further.
The federal stimulus program will provide $2.9 billion for Illinois Medicaid,
another $2 billion in education and flexible grants, plus funds for job
training, food stamps and public works. There is a new lottery lease proposal
that could cover much if not all of our pension obligation. Depending on how
those figures are applied, a general tax increase may not be a foregone
conclusion.
Still, leaders are talking about a tax increase, and the subject of an income
tax increase always arises. A one percent increase could yield approximately
$3.7 billion in revenue, but more job losses would reduce that yield.
One possible new revenue approach may be an attempt to institute a service
tax. While current discussions indicate exemptions for healthcare, it would
apply to all other services from hairdressers to CPAs. This approach seems
less likely today than last month, but we will continue to monitor the issue.
When the Michigan legislature passed a 6% service tax in October 2007 the
taxpayer backlash was so powerful and comprehensive the tax was repealed on
December 1, 2007, just hours after it became effective.
The second
major issue facing Illinois in 2009 is ethics. When former
Governor George Ryan finally went to prison in 2007, it didn’t take a crystal
ball to know that his successor might well be on the same path. Even a
crystal ball could not have revealed the bizarre spectacle that would unfold
with Governor Blagojevich’s arrest, appointment of Roland Burris to the US
Senate, poetry recitations, impeachment, and still-ongoing media campaign to
keep Illinois’ national and international embarrassment alive.
The response from Illinois politicians was as expected; Governor Quinn
started the ball rolling to address ethics reform while still Lieutenant
Governor, and his new Illinois Reform Commission is now tackling government
transparency, campaign finance reform, enforcement and structure. Their
recommendations will be released in April. A coalition of campaign
finance reform advocates is pushing HB24 which would establish federal
campaign finance rules in Illinois.
The Illinois Chamber is working internally to develop our own proposal for
campaign finance reform that will protect the public interest while ensuring
a level playing field for employers in future elections.
The third key
issue for 2009 is capital funding. Here again there are a
number of options being discussed at the Statehouse, including such revenue
options as a gas tax increase and whether such a package would be
transportation-centered or a more broadly-based infrastructure program.
With our Infrastructure Council and our role in the Transportation For
Illinois Coalition (TFIC), the Illinois Chamber has repeatedly advocated need
for a capital plan. Converging events in Washington related to a stimulus
package and renewal of federal transportation funding add pressure to resolve
unaddressed safety and capacity issues as well as jobs creation. We will
still advocate for increased investment in transportation infrastructure,
restoration of the road fund, and proportionate funding so that business
doesn’t bear an unfair burden to provide adequate funding for transportation
infrastructure.
The Chamber’s
agenda is broader than these three issues. We are developing
our most proactive legislative agenda in years on behalf of Illinois
employers and employees. We also expect to present lawmakers with new ideas
to advance economic development, reform workers’ compensation, improve healthcare
through wellness, address greenhouse gas emissions and grow energy-based
jobs, and continue to improve Illinois’ civil justice climate. We are also
monitoring for other onerous legislation in the works, including SB184, which
would require pre-judgment interest in civil cases where a plaintiff
prevails, and SB63, which would require prevailing wage be paid on all
Enterprise Zone and TIF district construction.
We welcome you to follow the progress of the 2009 agenda on our website, www.ilchamber.org,
and track our positions and bill activity on our Key
Bill page.
As this new session gets underway in a new climate free of gridlock, we are
committed to doing our best to be part of the solution and hope the Governor
and legislators will join us in that spirit of cooperation.
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