June 08, 2017As state lawmakers prepare to run up the white flag on enacting a new Illinois budget by tonight's deadline, major business groups are ripping the Democratic-dominated General Assembly for what it has done.
In the past two days, measures to establish a $15-an-hour statewide minimum wage, mandate five days of paid sick leave a year and impose a minimum tax on all C-corp businesses have been sent to Gov. Bruce Rauner or teed up for final action. Meanwhile, hopes for action on items such as extending the state's research-and-development tax credit and trimming workers' compensation benefits have stalled, and an extension of Edge payroll tax credits has been amended to include a feature business doesn't like.
Labor groups and Democrats generally praise the above list of measures as good for working people. But business is absolutely furious.
"It's another example of the lurching left of the Democratic Party," said Greg Baise, president of the Illinois Manufacturers' Association. "The politics of 2018 have evolved into the legislation of 2017," he added, referring to the upcoming election in which Democrats believe they have an excellent shot to unseat Rauner.
"It's been a bleak session. They're reaching into our pockets with both hands," Illinois Retail Merchants Association chief Rob Karr told me. "We're hopeful the governor will veto."
The late-in-session tide of business group unrest began early in the week, when negotiations over workers' comp reforms broke down. It picked up pace yesterday when the House approved and sent to the Senate the minimum-wage bill. It's expected to clear the Senate later today.
But the final straw of sorts came today when, on a party-line vote, the House approved a five-year extension of the Edge relocation incentive program that also includes something more: a new minimum $5,000 tax on C-corps designed to pull in $386 million a year in new revenue for the cash-strapped state treasury.
Sponsoring Rep. Mike Zalewski, D-Chicago, told colleagues during floor debate that the measure is designed to make businesses that avoid taxation start paying something, while focusing only on C-corps rather than LLCs, LLPs, S-corps or other entities, which tend to be smaller.
But Baise said the new levy would hit more than 180,000 entities, half of which have annual payroll of less than $100,000 a year and which in his view are small businesses. Nor is there a graduated scale to protect small companies that are just getting started, he said.
The bill has yet to be approved by the Senate and will not come up today, officials said. So that in theory leaves some time for negotiation.
Other groups, including the Illinois and Chicagoland chambers of commerce, were scheduled to echo the complaints from the manufacturers and retailers at a press conference later this afternoon.
Meanwhile, as of midafternoon, House Democrats were still caucusing. But by all indications they were not prepared to vote on a budget and tax hike plan that has cleared the Senate but that Rauner has threatened to veto because it fails to include a property tax freeze and other items he wanted.
That means that if the state is going to get a budget for the first time in three years, it will have to be approved by a 60 percent majority of both houses, a big hill to climb.
Whether Madigan has some other strategy in mind, such as a partial stopgap budget, isn't yet clear. Look for him and Rauner to have more to say later today, but there is no indication of a last-minute breakthrough.
