Download this document in .pdf format
BRIEFLY:
Adjourning Congress addresses manufacturing agenda
Shortly before adjourning earlier this month, the 109th Congress came through in approving priorities long sought by manufacturers. Legislation to be sent for President Bush's approval includes:
- An offshore energy measure that will permit environmentally responsible energy production in deep waters beyond 100 miles from the Florida coast. For manufacturers, this victory will mean increased supplies of energy, making our nation and our economy more secure.
- Major trade initiatives: the Miscellaneous Tariff Bill (MTB), the Generalized System of Preferences (GSP), the Andean Trade Preferences Act (ATPA) and permanent normal trade relations for Vietnam.
- All are critical trade programs for U.S. manufacturers.
- A seamless extension and historic strengthening of the R&D tax credit, which is a proven innovation-spurring incentive used primarily by manufacturers.
- Provisions on Health Savings Accounts (HSAs) that allow more employers to offer HSAs, and more employees to enroll in them, offering the promise of lower costs.
Congress' adjournment brought with it the end of Illinois Congressman Denny Hastert's term as Speaker of the U.S. House. Speaker Hastert's eight years in that office make him the longest serving Republican speaker of the house. He was first elected in 1998 after rank and file members approached him to serve. Denny Hastert has been a friend to the IMA and to our state's business community for nearly a quarter century. We wish him well as he returns to the rank and file and we know that his office is always open to our concerns.
A look back at 2006 and plans for 2007
This Executive Memo offers a report on the IMA's 2006 successes and the agenda for 2007. We believe your membership in the IMA has made a significant difference, and contributed greatly to the measure of success we enjoyed this year. Conversely, we hope you have found your membership to have value; that it makes a contribution to your enterprise.
We began the year with welcoming Mark Denzler as he returned to the IMA as Vice President of Government Affairs and Membership Services, and wishing Boro Reljic well as he joined Abbott Laboratories. Mark's familiarity with issues facing manufacturing in Illinois allowed us to remain in the forefront of legislative advocacy in 2006.
The General Assembly adjourned on May 5, after compressing its normal five-month Spring session into just four, which included four weeks of overtime wrangling over budget issues. For manufacturers, the creation of the Illinois Manufacturing Caucus in mid-April was a silver lining in an otherwise lack luster session. More than 50 legislators, representing both parties, banded together to examine ways Illinois can reverse nearly two decades of industrial decline and job losses. They have a formidable task ahead, one worthy of our participation and support.
In the fall, primarily through the tireless efforts of our immediate past chairman, Glen Johnson, the IMA played a major role in creating Project Lead the Way — a pre-engineering curriculum that will train high school students for jobs in Illinois' industrial sector. Partnering with 20 Chicago-area manufacturing companies, which have committed to providing internships, the curriculum features business owners as mentors who will coach students to become future managers and owners of industrial enterprises. The program, approved by the Chicago School Board in November, will be housed at Austin Polytechnical Academy and will welcome its first class of freshmen next fall.
However, the storm clouds shrouding Illinois' business community these past several years remain. State government and particularly its finances are a major concern for the IMA. Runaway spending continues unabated in Springfield as politicians, bent on giving away as much as they can without regard to cost, have run up a tab for their largesse of more than $100 billion. Our state pension system, according to Moody's, is the single worst funded system in the country. Recently the Commercial Club of Chicago said, "Illinois is headed toward a financial implosion," and they're right.
Illinois politicians cannot continue with their giveaways and free lunch attitude. Today, every man, woman and child in Illinois owes $8,800 dollars to eliminate the state's debt. According to many, we can expect more outrageous spending on questionable new programs in the months to come. Policymakers have done nothing to stem the tide of manufacturing job losses in this state and sometimes seem intent on doing whatever they can to drive good paying jobs from our borders.
Our Capitol Battle Plan (see, page 3) is designed to begin reversing that trend. It tills the economic soil of Illinois to create the type of environment that will attract industry and keep it here. From improving our state's tax climate, to improvements to our transportation system, to common sense and affordable healthcare, to further reforms of our workers' compensation system, the IMA's plan is designed to have comprehensive and lasting impact for expanded opportunities and prosperity for working families. It is a plan that benefits everyone, a plan whose time has come, and we will fight hard for its passage.
For now, please accept our best wishes for a joyous holiday season and a safe, prosperous and happy New Year.
Sincerely,
Gregory W. Baise
President and CEO, Illinois Manufacturers' Association
New state laws to take effect
Hundreds of new laws are scheduled to take effect on January 1, 2007. From the IMA's Government Affairs team, here are some of the more important law changes impacting manufacturers.
- Public Act (PA) 94-1067 is sweeping legislation designed to encourage Illinois employers to offer employment opportunities to honorably discharged veterans and ex-offenders. The bill amends the Income Tax Act and creates income tax credits for wages paid to eligible veterans and ex-offenders. In the case of the credit offered for ex-offenders, employers would be eligible for a credit of up to $600 per individual per year.
- PA 94-695 amends the Workers' Compensation Act by making changes concerning payments by employers into the Rate Adjustment Fund; lowering compensation for certain accidental injuries occurring before February 1, 2006 to the levels that existed before the 2005 landmark reform legislation took effect; payments by employers of annual adjustments to the compensation rate in awards for death benefits or permanent total disability; applicability of fee schedules; retrospective review of health care services; and the duty of the Workers' Compensation Advisory Board to aid the Illinois Workers' Compensation Commission in reviewing advisory rates filed by an advisory organization.
- PA 94-1025 amends the Minimum Wage Law establishing an employer's liability for punitive damages in the case of underpayments of wages. Employees may recover such punitive damages in any proceeding or action allowed by any applicable provision of the applicable Minimum Wage Law, including, but not limited to, a civil action filed directly by the employee, and, subject to the limitation period set forth in the statute, that any recovery by an employee may be also applicable to other similarly situated employees of the same company. In addition, an employee may collect up to two percent damages for the same violation, but cannot collect more than once in the case where a complaint is filed by both the employee and the Illinois Department of Labor.
- PA 94-966 creates the Business Location Efficiency Incentive Act. The legislation authorizes companies to apply to the Department of Commerce and Economic Opportunity for economic development assistance tax credits that seek increased or extended tax credits if the company proposes a project site located in an area that capitalizes upon affordable workforce housing or accessible mass transit; or the company submits to the Department an approved remediation plan to improve housing or access to mass transit; or the company's project is located in an area considered to be a "labor surplus area."
- PA 94-1072 raises the Illinois Minimum Wage to $7.50 per hour beginning on July 1, 2007. The legislation then calls for annual twenty-five cents per hour increases until it reaches $8.50 per hour in 2010. Governor Rod Blagojevich signed the legislation on December 18th, just in time for a political Christmas present. The state estimates that this wage increase will apply to more than 308,000 workers.
Questions or comments should be directed to Mark Denzler, the IMA's vice president of Government Affairs and Member Services at 217.522.1240, Ext. 3008 or email: mdenzler@ima-net.org.
Why join the IMA?
1. Retain more earnings — Whether we're helping you save through our programs and cutting-edge information or fighting to lower your taxes, the IMA is smart business.
2. Receive better information FAST — We specialize in getting information such as the latest on regulatory, legal and taxing matters to you fast and in language you can use.
3. Understand the workings of government — Knowledge is power, and with the IMA, you'll garner a ground-up understanding of how government works.
4. Meet and influence legislators and regulators — We offer you a chance to conduct meetings with influential public figures who need an understanding of YOUR operation.
5. Insurance — The IMA offers you health & worksite insurance programs, a group eye-care program, plus property, liability, and workers' compensation coverage.
6. Member services — Members receive a variety of discounts on services provided by America's most-reputable companies in such areas as electricity, natural gas, shipping and communications.
7. Worldwide exposure — As an IMA member, businesses throughout the world can locate information about your company via our online directory located at www.ima-net.org.
8. Networking — The IMA provides opportunities for you to make valuable connections to one another through seminars, publications and educational conferences.
9. Better manage your external environment — The information we provide you will keep you up-to-date on innovations and problem-solving ideas from around the world.
10. Better business — As a group, the IMA makes a larger impact than a single company fighting alone for pro-business reform.
Summary of Illinois' 94th General Assembly
After considering more than 8,000 bills and months of debate, the 94th General Assembly adjourned the fall veto session in late November with only a few scheduled days of session remaining in January prior to inauguration of the 95th General Assembly. Makeup of the incoming legislature increases the Democratic majorities in the House and Senate while Governor Rod Blagojevich continues in his role as the state's chief executive officer.
Unfortunately, the 94th General Assembly failed to address the massive state debt that burdens every resident and business in Illinois. With nearly $3 billion in short-term debt and more than $42 billion in long-term debt, Illinois faces significant financial problems that continue to snowball without resolution. In the past two years, the legislature skipped making nearly $2.5 billion in payments into the state's pension plans — instead preferring to use these funds to pay for general operating expenses. Actuaries predict that it will cost between $7 and $10 for every skipped dollar.
In addition to skipping the pension payment, Governor Blagojevich proclaimed that "businesses were not paying their fair share" and demonized business incentives by labeling them as "corporate tax loopholes." As part of the FY07 state budget, the Governor proposed seven tax law changes (repealed incentives and new taxes) that would have cost businesses nearly $500 million including fuel taxes, software taxes, and changes in the net operating loss provision. Fortunately, opposition from the IMA helped stop these onerous and costly new taxes on the business community.
In terms of workforce, the Governor used his so-called mandate in the election to push for the immediate passage of an increase in the state's minimum wage from $6.50 to $7.50 per hour. In addition, the Governor sought to eliminate the teenage and training wages while increasing the minimum wage by the CPI on an annual basis. After very short debate over a two week period, the Governor and Democratic leaders agreed to a $1 per hour increase in the minimum wage followed by additional raises of 25 cents per hour in each of the next three years. The Governor signed the minimum wage law, and it takes effect on July 1, 2007.
As the 94th General Assembly winds to a close, the IMA can cite several victories including defeat of numerous tax increases and a tremendous win in employee training. The IMA was successful in obtaining a $2 million ETIP grant from the Department of Commerce & Economic Opportunity that allows manufacturing companies to receive up to a 50 percent reimbursement of their training costs. This important incentive will allow manufacturers to provide training and ensure that they maintain a skilled workforce in the future.
Soon the 95th General Assembly will be sworn into office. These public officials will deal with many issues left unresolved such as the skyrocketing state debt and loss of manufacturing jobs in Illinois. With its 2007 Capitol Battle Plan, the IMA stands ready to move forward and create positive change in Illinois.
IMA has Capitol Battle Plan for 2007
The Illinois Manufacturers' Association unveiled its Capitol Battle Plan for the coming legislative session.
For more than a century, the IMA has been the only voice focusing on manufacturing in Illinois, leading the fight to create a strong and flourishing economy. The IMA's efforts protect current industry and encourage new employers to set up business in Illinois. Every day the IMA advocates for creating and keeping a sound business environment that encourages job creation and economic growth.
Over the last several years, Illinois government has become increasingly hostile towards those who create jobs and opportunity in our state. The IMA believes basic changes to state policy are a must if we are to reverse the current trends that have resulted in the loss of hundreds of thousands of good paying manufacturing jobs. Our industries are not being outsourced to other countries, but more often we're losing factories and the jobs they create to our neighboring states. Illinois can do better, and the IMA has the agenda to do just that.
In 2007, there a many initiatives the IMA will pursue, including:
Enhanced R&D tax credits for manufacturers: Increased credit and an expanded definition of research and development will lead companies to create good jobs in Illinois. The IMA is a leading member of the Illinois Research and Development Coalition, a group comprised of trade associations, individual businesses and affiliated industries formed to aggressively lobby for an enhanced R&D tax credit in our state. Additionally, the IRDC serves as the conduit for Illinois' effort to encourage Congress to permanently extend the R&D credit nationally.
A new energy credit for manufacturing: Illinois manufacturers need a safe, reliable and efficient source of energy to conduct business. With energy prices on the rise, the IMA will strongly pursue legislation creating a tax credit for energy used in the manufacturing process. Businesses currently in enterprise zones enjoy an exemption and the IMA will lead the effort to extend this same treatment to existing companies statewide.
Transportation improvements: For decades, Illinois has been a national transportation leader with strategically located and efficient airports, miles in interstate highways, a strong railway system and navigable waterways. However, for the past four years, Illinois' infrastructure has begun to crumble while state officials needlessly argue over capital spending projects. The IMA will spearhead the effort to pass a strategic transportation plan addressing all modes of transportation enabling employers to move products and goods to markets throughout the state and around the world.
Commonsense health care: Affordable and high-quality health care is invaluable in ensuring a strong workforce. The IMA supports competition in health care that will increase efficiencies, lower costs and allow more workers to receive health care benefits. In 2007, the IMA will work to create small employer health care pools and cafeteria-style health care plans that will allow employers to offer health care benefits without breaking the bank. In addition, we will stand against the recently proposed mandatory universal health care system, which would offer free coverage to all at the expense of employers.
Stronger tort reform: For too many years, several counties in Illinois have repeatedly been included in the top ten so-called judicial hellholes in America because of their unbalanced judicial system that is tilted in favor of trial lawyers. In an effort to create fairness and provide access to the court system, the IMA advocates a tort reform plan that will prohibit venue shopping, limit non-economic damage awards, establish expert testimony standards and reform joint and several liability.
Continue reforming the workers' compensation system: Workers' Compensation costs in Illinois continue to outpace those in neighboring states despite passage of landmark legislation in 2005 that helped curb medical costs. In the coming year, the IMA will continue to press for further changes in the WC arena that will required the workplace to be the principle cause of an injury, involve employers in the selection of medical providers and stipulate that workers have a responsibility to be drug and alcohol-free in the workplace. Business and labor, working in concert, can ensure that our WC system has balance and fairness.
The IMA's agenda is ambitious, but working together and speaking with one voice, we can make a difference — a difference whose time has come, and a difference that will have lasting benefits for employers and working families in Illinois.
Jobs Coalition issues negative November jobs report
For the November 2006 Illinois Job Index, the Coalition issued a negative rating. The state's economy continues growth at a faster pace than the rest of the Midwest, but at a slower pace than the nation.
The Illinois Coalition for Jobs, Growth & Prosperity publishes the monthly Illinois Job Index and MSA Report as tools for elected officials, policy leaders and the public. We can better understand the Illinois economy and business climate by comparing and measuring Illinois employment growth rates against those of the rest of the Midwest (Indiana, Iowa, Michigan, Missouri, Ohio and Wisconsin) and the nation.
Continuing the sluggish growth of job creation since July, Illinois added only 1,100 jobs in October. However, the total number of jobs in Illinois recovered to the level recorded in October 2001.
The growth of Illinois last month, .02 percent, is only one third of the .08 percent average rate for the recent recovering period since early 2004 and very slow compared to the growth of .19 percent in Illinois for the corresponding month in the previous year.
Since July 2005, Illinois surpassed the rest of the Midwest in terms of 12-month job growth, while Illinois grew slower than the nation. Narrowing the gap between the indices of the rest of the Midwest and Illinois since the beginning of 2006 led to the lowest gap, 3.66 percent, in more than four years, since April 2002.
For the last 12-month period, Illinois created more than half (53 percent) of total non-farm jobs created in Midwest. This is mainly due to the faster job growth in Illinois compared to the rest of the Midwest for the last few months, especially when the rest of the Midwest had massive losses and Illinois experienced net gains (July and October).
Since late 2003, when Illinois started to recover from the recession, the average monthly growth rate of jobs in Illinois is .08 percent, higher than .05 percent in the rest of the Midwest. However, it still lags behind the national growth rate of 0.12 percent.
Source: Illinois Economic Observatory/Regional Economics Applications Laboratory, University of Illinois, Champaign.
ETIP grants reimburse companies for employee training
The Employer Training Investment Program (ETIP) supports Illinois companies' efforts to upgrade workers' skills in order to remain current in new technologies and business practices. The ETIP grant will reimburse Illinois companies for up to 50 percent of the cost of eligible employee training taken between July 1, 2006 and June 30, 2007.
Illinois companies that are retraining/upgrading the skills of their existing workforce may be eligible for ETIP grants if they meet certain criteria.
Apply for grant funding today! For details, contact Judy Parker, IMA Director of Training at 217-522-1240 ext. 3036, or email
jparker@ima-net.org
Purchase the 2005-2006 IMA Benefits Report today . . .
The biennial Benefits Report contains data on employers' plans for a variety of different benefit plans in addition to total number of holidays provided and for additional paid holidays. To order the 2005-2006 Benefits Report, contact Janie Stanley at 800-875-4462, Ext. 3020, or e-mail jstanley@ima-net.org.
Order the IMA's 2006 Annual Compensation Report today
We're sure you'll find the IMA's 2006 Compensation Report to be a valuable tool for determining fair and appropriate compensation levels for your business. If you have questions, contact Janie Stanley at 217-522-1240, ext. 3020 or email
jstanley@ima-net.org. Online access, print, or both, order yours today at . . .
http://www.ima-net.org/reportorder/login.cfm
DATES OF NOTE:
More events may be found at http://www.ima-net.org/calendar.cfm
Tuesday, March 6, 2007
HR Networking Forum
9:30-11:30 am, Holiday Inn,
222 Potomac Blvd., Mt. Vernon
Facilitator: Donna Rogers, SPHR, IMA's HR Consultant. Back by popular demand for the second year in a row, this no fee HR Networking Forum is designed for building relationships with other HR professionals in the manufacturing field. Manufacturing Members and Associate Members of IMA are invited and encouraged to attend. Discuss similarities and differences on current HR issues among peers as well as potential solutions. Finally, provide valuable feedback to the facilitator regarding HR related IMA member services. To register contact: Kim McNamara, 800-875-4462, Ext. 2109, email:
kmcnamara@ima-net.org
Tuesday, March 6, 2007, same location, from 1:00-4:30 pm:
Workplace Trends: Current Issues Affecting Managing Your Employees
Stay up-to-date on the latest employment-related issues facing your organization. IMA's employment law expert Jim Spizzo, Shareholder, Vedder Price Kaufman & Kammholz, P.C., will discuss in depth recent trends, cases and new legislation in this ever-changing field. Bring your personnel/human resource questions! Specific topics to be announced. COST: $125 for IMA members, $100 for additional attendees from same company and $200 for non-members. To register contact: Kimberly McNamara, 800-875-4462, ext. 2109, email:
kmcnamara@ima-net.org
Additional dates for the above mentioned program include:
Tuesday, April 24, 2007
Tuesday, November 13, 2007
Oak Brook Executive Plaza Conference Center,
1225 W. 22nd St., Ste. 140
Oak Brook
To register contact: Kimberly McNamara, 800-875-4462, ext. 2109, email: kmcnamara@ima-net.org
Download this document in .pdf format
Other Executive Memos available online.
Remember, you must have the Adobe Acrobat
Reader software in order to view .pdf documents. Acrobat Reader
can be downloaded
for free from the Adobe Web site.
