3% PAYROLL TAX PASSES SENATE COMMITTEE

The supposedly “scaled down” version of Governor Blagojevich’s health care program, SB 5 (Ronen, D-Chicago) is anything but as far as employers are concerned.  Businesses with 10 or more full-time workers that don’t spend at least 4% of their payroll on health insurance for their employees would still be assessed a 3% tax on their payroll.  The only thing that may be considered scaled down about this program is the governor’s apparent acceptance that the Gross Receipts Tax (GRT) is dead, which was the major funding source for this once multi-billion dollar program.  This tax would still rob $1.2 billion from over 200,000 Illinois employers.  This $1.2 billion would be spent on offering a healthcare program at this new lower cost that would be achieved partly by restricting eligibility for some programs and cutting back the care offered. 

The business community, regardless of an employer’s commitment to providing quality healthcare benefits to its employees, would be mandated to front the expenses of this program. Needless to say, the state’s employer community is still aggressively fighting this proposal. 

Also, language has been added to this proposal in committee to relieve it of its immediate effective date.  The new effective date would not be until July of 2008.  This plan now only requires a simple majority of 30 “YES” votes in the Senate to pass to the House.  The governor may be close to achieving that number.  The full Senate may act on this bill soon.    

CICI NEEDS YOUR HELP.  Call, write, or e-mail your State Senator in Springfield now, but only if they are a Democrat as the Senate Republicans are united in their opposition, and help defeat the 3% payroll tax.  It is absolutely imperative that you inform them that this is not a “scaled down” plan and how the 3% payroll tax will be detrimental to your business.

If you do not know who your State Senator is, follow this link and enter your facilities address and contact them – either by phone, e-mail or letter – in their Springfield offices: http://www.elections.state.il.us/DistrictLocator/AddressSearch.aspx

In other developments, the Senate Revenue Committee this week also passed a $.90 per pack cigarette tax hike, which could bring in an additional $380 million.  A new provision in SB 5 requires that 17 percent of this new tax money go into a fund designed to increase reimbursement rates for healthcare providers.  These providers have been asking for an increase in their reimbursement rates as part of any agreement to support the governor’s health insurance plan, although the association representing the state’s doctors filed in opposition to the bill this week.  This new cigarette tax revenue has also been earmarked for such other programs as education and a capital building program.  

ELECTRICITY RATE RELIEF HEADS TO GOVERNOR

The House and Senate yesterday passed the electricity rate relief measure, SB 1592 (Forby, D-Benton), with 80 ”YES” votes and 33 ”NO” votes in the House and 40 “YES”, 13 “NO”, and 1 “PRESENT” vote in the Senate and now heads to the governor for his consideration.  The governor is expected to sign the measure into law.  This measure contains many provisions that have been negotiated over the last few months but does not include any electricity rate freeze and/or generating tax that was floated as a bargaining measure a couple of months ago.  It has been said here many times that any effort to re-freeze rates or impose a generating tax would likely be done at the expense of industrial users.  Instead, it calls for over $1 billion in residential and small business rate relief, paid for by the state’s utilities, over the next 4 years, to be handed out in the forms of credits.

Also, the Illinois Attorney General’s office has worked out a five-year power-supply contract with Exelon and Ameren that lock in prices for so-called “base load” power (electricity from plants that run year-round) that supposedly will help to blunt rate hikes over that period.

For the rest of the power supply that will be needed after the coming year, the proposal would also create the Illinois Power Agency that would be responsible for buying electricity on the open market. The agency would be subject to oversight by the Illinois Commerce Commission, which currently regulates utilities.  Also, this agency could even build its own power plants.

Finally, a package of provisions favored by environmental groups also is included. They include annual mandates for reducing power consumption, to be met by the state’s utilities.  This deal mandates that an increasing amount of the power consumed in the state come from renewable sources like wind farms. By 2025, 25% of the state’s power is to come from renewable sources.

GENERAL MEMBERSHIP MEETING & GOLF OUTING AUGUST 23

CICI’s Annual General Membership Meeting and Golf Outing will be held Thursday, August 23 at the Klein Creek Golf Club in Winfield at 1N333 Pleasant Hill Rd.  State Representative Mike Fortner (R-West Chicago) will be this year’s luncheon speaker and will be discussing the recent legislative session.  The day’s events begin at 9:30 a.m. with the General Membership/Open Board of Directors meeting with lunch served at 11:45 a.m. followed by a shotgun start, scramble format at 1:30 p.m. The meeting registration is available at: http://www.cicil.net/Flyers/General_Membership_Golf_2007.html

If your company has any promotional items or gifts to donate for the golf outing, your support would be greatly appreciated. Please send items to the Des Plaines office at 2250 E. Devon Ave, Des Plaines, 60018.

CICI is again making available hole sponsorships at $500 per hole to benefit CHEMPAC, the only political action committee solely representing the chemical industry. Sponsorship includes a sign with your company name prominently displayed at the tee box.  For more information on hole sponsorship, please contact Brad Babcook at 217/522-5805 or bbabcook@cicil.net.

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

Headquarters: 2250 E. DEVON AVE., SUITE 239, DES PLAINES, IL 60018 • TEL :( 847) 544-5995 • FAX :( 847) 544-5999
Springfield: 400 W. MONROE, SUITE 205, SPRINGFIELD, IL 62704 • TEL :( 217) 522-5805 • FAX :( 217) 522-5815