LAWMAKERS ADJOURN, PASS UNBALANCED BUDGET

Lawmakers returned to Springfield this week to iron out the final details of a state budget and, for the most part, they passed one to Governor Quinn, except for a key component – necessary funding. With no desire to raise taxes or severely cut the budget, Democratic lawmakers had pinned their hopes to craft a budget on a plan to again borrow nearly $3.8 billion to fund the state's employee retirement systems. While the House approved this borrowing plan, the Senate couldn’t muster enough votes for passage and didn’t call the bill for a final vote. As a result, this budget is, admittedly, unbalanced and unconstitutional. The General Assembly has adjourned to the call of their respective leaders, presumably until sufficient votes can be found, but it’s anyone’s guess when, or even if, they will re-convene until after the elections.

The good news is no bills opposed by the Chemical Industry Council of Illinois (CICI) advanced to the Governor. All efforts to ban chemicals and chemical products, raise taxes or fees, and eliminate industry tax incentives failed to reach the Governor. In fact, thanks to the determined efforts of numerous CICI members engaging their elected officials, the devastating 12% oil products tax, the elimination of the single sales factor, and the further eroding of the state’s economic incentives never advanced.

Some House Democrats tried to advance various plans to actually cut spending in the budget, but most of the substantial savings proposals were rejected, including a proposal to make state retirees pay a portion of their health insurance premiums, cutting state payments to county officials, and reducing mileage reimbursement rates for state employees. A plan, however, to forfeit raises for lawmakers and other top state officials in the coming year was approved as was a reduction in their mileage reimbursement rate.

The part of the budget the legislature was able to pass gives Governor Quinn nearly unprecedented authority to shift money to deal with the state’s $13 billion deficit. Another part of the budget is a tax amnesty program to give taxpayers a chance to pay back taxes without penalty, potentially generating millions in revenue. Other new and one-time sources of revenue in the budget come from selling tobacco settlement proceeds and raiding special funds. Even with new revenue and modest cuts, it's estimated that the state will have to come up with at least $3.1 billion again next year just to keep the deficit at $7 billion. And that doesn’t include the state’s necessary pension payments.

OTHER MEASURES ADVANCING TO THE GOVERNOR

Employee Credit Checks
This legislation, HB 4658 (Franks, D-Woodstock), originally placed some very burdensome requirements on employers including prohibiting them from inquiring about or using an employee's or prospective employee's credit history as a basis for employment, recruitment, discharge, or compensation. Amendments were added in the House and Senate to provide that information concerning an individual's credit score is a bona fide occupational requirement if the employee's or applicant's credit score is otherwise required by Federal or State law. Other exemptions also now include exemptions for positions that involve setting the direction or control of the business, access to personal or confidential information, financial information, trade secrets, or state or national security information.

Tax Exemption for Permanent Fixtures Reinstated
A key property tax exemption for permanent fixtures installed in companies was inadvertently struck from another piece of legislation concerning manufactured homes. An effort to correct this mistake was successful and the measure, HB 6241 (Black, R-Danville), will continue to allow businesses to receive an exemption for certain fixtures.

Renewable Energy/Solar Energy Requirement
This measure, HB 6202 (Burns, D-Chicago) mandates Illinois electrical transmission companies will have to buy a certain percentage of solar power beginning on June 1, 2012. At that time, solar energy (photovoltaics) will have to comprise 0.5 percent of the renewable portfolio standard growing to a level of 6 percent in 2015. Many are concerned that this will result in higher energy costs, especially for industrial users as lawmakers imposed an artificial price cap on residential and small businesses but failed to do the same for commercial and industrial users.

WORKER'S COMP REFUND POSSIBLE

The State of Illinois has settled a class action lawsuit filed by business groups alleging that the state had been overcharging employers for worker's comp rates. The lawsuit alleged that the surcharge had been deliberately set to raise an amount in excess of the money needed to pay for the operations of the Worker's Compensation Commission and was used to generate revenue for the state's general revenue fund. If you are an employer and paid worker's compensation insurance between July 1, 2003 and June 30, 2009 this may affect you. If you paid the "Workers Compensation Commission Operations Fund Surcharge" between those dates you may be eligible for a refund. You should contact your worker's compensation insurance agent to see if you are entitled to make a claim for refund. Refunds must be postmarked by June 1, 2010. For more information, including the claim form, go to http://www.iwcc.il.gov/settlement.htm

 
Please note that the Chemical Industry Council of Illinois Legisletter is not intended to convey legal advice or set forth all legal requirements applicable to particular circumstances.


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