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November 14, 2008
Volume 22 - Issue 22
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PARTICIPATION REQUESTED AT CICI ANNUAL MEETING DECEMBER 4
On December 4, CICI will be hosting its Annual Meeting. The meeting which is open to all CICI members will be held at the Holiday Inn Express in Rosemont.
The meeting, which is also an open CICI Board of Directors meeting, will include an overview of the recent elections by Bill Allmond, Director of Government Relations for the Synthetic Organic Chemical Manufacturers Association (SOCMA). Allmond will also discuss the state of the economy and the emergence of green chemistry.
In addition, our luncheon speaker will be State Senator Kirk Dillard (R-Hinsdale) to discuss the impact of the state elections and what it means for Illinois’ chemical industry.
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STATE BUDGET WOES WORSEN WITH THE ECONOMY
The state of Illinois has had ongoing budget problems since 2002. These problems, thanks in large part to dysfunctional leadership from Springfield, have only continued. The state’s budget has remained in the red even when the country’s economy and other states have seen growth. With the global recession now engulfing business as well as government, Illinois’ budget problems are only becoming worse.
The declining economy has begun to have a significant impact on Illinois’ tax receipts. According to the Illinois Department of Revenue, the state could now be close to $1 billion in the red based on receipts so far for fiscal year 2009, which began 4 months ago. To make matters worse, this deficit is in addition to the $2 billion hole the state was already in when the General Assembly passed a woefully unbalanced budget to the Governor.
The decline is particularly affecting individual and corporate income taxes and the sales tax.
- Individual income tax receipts were down 4% relative to projections, rather than rising 1% as assumed in the state budget. If that trend continues for the remainder of the year, the state will be short $330 million in that category alone.
- Corporate income tax collections were off even more, dropping 14% from budget projections rather than growing 4%. The annualized loss there would be about $270 million. Also, revenue from the sales tax is down 3% rather than growing a projected 1.6%, leaving a potential $215 million shortfall.
- The department noted that gaming revenue is off $100 million so far in the fiscal year, and returns from short-term state investment are also declining.
Of course, CICI’s main focus next year will be to keep the chemical industry from having to absorb any new fees and/or taxes while maintaining some of the few remaining tax incentives still available to us. With the exception of Governor Blagojevich’s first year in office, CICI and the business community has been very successful in that endeavor. This, however, is becoming an increasingly more difficult task to accomplish. Given the state’s ongoing budget problems, the failing economy, and the propensity for many elected officials to look to the business community for additional revenue through higher taxes and fees, it is almost certain that we will see another attempt to make the state’s businesses shoulder more of the responsibility of funding state government. |
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VETO SESSION UPDATES
Clean Coal Legislation – Utility Rate Hikes – Stalled in Senate Committee
CICI and many in the business communityopposed this measure, SB 1987 (Trotter, D-Chicago), that could ultimately mean utility rate increases and hindered competition in the electricity market for industrial customers. An agreement by some of the state’s utilities and the environmental community made the bill’s passage out of the House possible. The bill became stalled in the Senate Environment & Energy Committee this week as many of its members questioned the cost and timing of such as large undertaking.
The legislation essentially bets with ratepayers’ money on a promising but costly and unproven technology designed for Illinois' abundant coal, whose high sulfur content has impeded its use. Anticipating new federal standards restricting carbon emissions to combat global warming, the technology separates carbon during the coal-burning process for burial underground.
It was estimated by some business groups that electricity rates for residents and businesses could increase by tens of millions of dollars annually once the facility is completed which at the earliest would be @ 2015. The legislation further mandates price increases every year for the next five years. It was also estimated these price increases could total $400 million per year or $2 billion over 4 years. At current market rates, approximately two-thirds of that $2 billion, or $1.3 billion, will be passed on to consumers, particularly commercial and industrial users. CICI will continue to oppose legislation such as SB 1987.
Lead Labeling of Children’s Products & Mercury in Cosmetics – Senate Floor
This proposal, SB 2860 (Hunter, D-Chicago), along with a ban on mercury being added to cosmetics, provides that no one shall sell, have, offer for sale, or transfer certain children’s articles that contain a total lead content in any component part of the item that is more than 0.004% (40 parts per million) by total weight unless that item bears a warning statement that indicates that at least one component part of the item contains lead. The 40 parts per million is the threshold considered safe by the American Academy of Pediatrics.
This bill was back in the Senate awaiting concurrence at the time of adjournment. The bill was successfully advanced out of the Senate Public Health Committee this week and now awaits final action on the Senate Floor when they return to Springfield next week. |
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BLAGOJEVICH OFFICIALLY RELEASES CLIMATE CHANGE REPORT
This may be a bit of old news as CICI has included in past newsletters and memorandums the recommendations from the state’s Climate Change Advisory Group but the Governor has finally, and now officially, released the findings of the advisory group.
This group was convened by the Governor in 2007 to consider policies and strategies aimed at reducing greenhouse gas emissions in Illinois. This group was comprised of a broad representation from the business, labor, energy and agricultural communities, along with scientists and environmental groups from throughout the state. However, the group was so lopsided with environmental activists that when the time came to vote on specific recommendations, the business community votes were all but disregarded.
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UNIONS PUSH FOR FEDERAL EMPLOYEE FREE CHOICE ACT
CICI received the following alert from one of its law firm members and thought it necessary to include here now that the elections are over and labor unions have gained more ground in D.C.
Congress is contemplating the first significant revision to National Labor Relations Act in over 70 years. Dubbed the Employee Free Choice Act (“EFCA”), this proposed legislation threatens to curtail two fundamental rights of American employees and employers: (1) the right to accept or reject union representation through a secret ballot election and (2) the right to freely negotiate a collective bargaining agreement. Unions are counting on EFCA to invigorate union organizing efforts nationwide, which have been languishing for decades.
The EFCA effectively eliminates the right to a secret ballot election. Union recognition would be based on a card majority, meaning that the National Labor Relations Board (“NLRB”) would certify a union’s status as the employee representative if a majority (50 percent plus one) of employees in the bargaining unit signs authorization cards.
It is much more difficult for an employee to refuse a face-to-face request to sign an authorization card than to vote his or her true choice in a secret ballot election. Further, the authorization card process effectively deprives employer and employee where employees can be apprised of the disadvantages of union representation.
Congress is expected to resume consideration of the legislation after the fall presidential and congressional elections. One of the EFCA’s co-sponsors is Illinois Senator and now President-Elect Barack Obama, who has promised he will sign as President. Now that that has happened, it’s hard to believe that he will not keep his promise if and when such a bill gets to his desk.
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.
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