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Next Session dates: House: March 27-29 & Senate: March 27-30
Poll indicates public opposition to Governor's gross receipts tax
The Illinois Jobs Coalition, co-founded by the Illinois Manufacturers' Association, this week announced the results of a poll commissioned to gauge public support of the Governor's $6 billion gross receipts tax. The poll, performed by Public Opinion Strategies, a nationally-renowned firm, indicated that a majority of Illinois residents strongly oppose the Governor's attempt to impose a new tax on employers across the state. While Illinoisans support the need for health care and education, they do not believe that taxing employers is the answer. Rather, voters prefer controlling the cost of government and limiting spending.
The IMA strongly opposes the Governor's tax hike — the largest in Illinois history — that would devastate the manufacturing sector as the tax pyramids through the production process. It will harm companies with low-profit margins and encourage out-of-state purchases. The GRT will lead directly to job loss and increased prices for consumers.
For weeks, the IMA has been deluged by calls and emails from member companies concerned that this new tax will severely damage their business. As a result, for the first time in memory, the IMA Board of Directors has made a special request (visit https://www.ima-net.org/grt/donate.cfm) of its members as the IMA undertakes the largest battle in recent history.
Democrat constitutional officers break from Governor on gross receipts tax
Three of Illinois' constitutional officers including Lt. Governor Pat Quinn (D) have cast serious doubts about the Governor's $6 billion gross receipts tax. Quinn, breaking ranks with Blagojevich, indicated that he could not support the tax because it is "regressive," unfairly targets the working class and provides no tax relief. He later flat-out rejected the tax saying "it's not a good way to go." While opposing the GRT, Quinn did announce a proposal to create a legislative task force, similar to the Compensation Board, to review business tax incentives. Under his plan, the panel could eliminate tax incentives and raise between $1 and $2 billion, unless the General Assembly overruled their decision.
Comptroller Dan Hynes (D) and Treasurer Alexi Giannoulias also sought to distance themselves from the Governor's tax play by raising concerns about taxing every transaction in the state. Hynes expressed concerns about imposing a massive new tax when Illinois faces a $2.3 billion deficit and can't pay its health care providers on time. The newly elected Treasurer indicated that the tax would hurt companies with low-profit margins.
House committee begins economic hearings — includes disturbing testimony
Under the leadership of Chairman John Bradley (D-Marion), members of the House Revenue Committee have begun a series of weekly hearings to help shape budget and economic policy in Illinois. At the initial hearing, testimony focused on the condition of the state's economy including a look at the previous five years and a forecast into the future. In addition, it provided an opportunity to compare Illinois to Midwest states and the rest of the country.
In a shocking statement, a chief economist for the Illinois Department of Revenue indicated that they were pleased that job losses in manufacturing appeared to be moderating. According to their presentation, Illinois is moving to a service-based economy and the Department was happy that manufacturers are losing jobs at a slower rate. However, according to the February jobs number released on Thursday by the Illinois Department of Employment Security, an additional 1,100 manufacturing jobs were lost in January.
In response to this appalling statement, Greg Baise, IMA president & CEO, testified that the manufacturing sector employs more than 675,000 Illinoisans and contributes $74 billion to the state's Gross Domestic Product (GDP) — a whopping 13 percent of the state's total. Manufacturing remains the single largest sector of the Illinois economy. Baise eloquently pointed out that the state should not be happy with any manufacturing job loss.
According to testimony from Baise and Ron Gidwitz, chair of the Illinois Jobs Coalition, Illinois continues to lag behind the Midwest and the rest of the country in job growth. If Illinois had only average job growth in the past decade, the state would have an additional 500,000 jobs.
The IMA applauds Rep. Bradley for undertaking these hearings and appreciates the opportunity to testify and participate in the hearings. Future hearings held over the next several weeks will focus on state debt, gross receipts tax, sales taxes, demographic trends, and alternative tax structures.
Senate change in Joint & Several Liability Law
Legislation (SB 1296) proposed by the Illinois Trial Lawyers Association and sponsored by Sen. John Cullerton (D-Chicago) was narrowly passed by the Senate this week. The legislation, which changes legal precedence, will prevent a jury from considering the fault of a person or entity that settles before trial. As a result, another defendant who may only be partially at fault, could be liable for up to 100 percent of the damages.
The IMA strongly opposes this legislation which will unfairly tilt the playing field. Current law, passed in 1986, is designed to protect parties who are only minimally responsible for an injury. It allowed that a defendant who was less than 25 percent at fault in an accident, would only be liable to pay his percentage share. SB 1296 guts the current law and allows trial lawyers to chase defendants with the deepest pockets.
The IMA applauds all members of the Senate Republican caucus and Democrat Sen. Mike Jacobs (Moline) who opposed this legislation.
Anti-business tort issues alive
In addition to SB 1296, trial lawyers in Illinois are advocating two additional pieces of legislation that will cost the business community. HB 1798 (Fritchey, D-Chicago) seeks to amend the Wrongful Death Act by allowing persons to recover damages for grief, sorrow, or mental suffering. The current Act was enacted to compensate a surviving spouse or next of kin for their financial loss. HB 1798 will change 150 years of history by expanding the scope and increase damage awards. It passed the House Judiciary Committee by a partisan 8-6 vote.
After being unable to pass his original bill (SB 747) from the Senate Judiciary Committee, Sen. Don Harmon (D-Oak Park) has filed an amendment to SB 1027. The language will change the collateral source rule and allow trial lawyers to recover additional damages after a settlement is reached and the injured party is made whole.
The IMA strongly opposed both measures which will be moving through the House and Senate respectively.
Pro-Tort Reform issues stymied
While trial lawyers were successful in advancing their agenda, they were also able to convince Democrat members of the House Judiciary Committee to oppose meaningful tort reform measures suggested by the business community. The IMA and a host of business groups supported a package of legislation that would have imposed qualifications for expert witnesses, set standards for asbestos cases, changed product liability issues, and dealt with venue reform. The Committee defeated the asbestos (HB 1897, Stephens, R-Troy) and expert witness (HB 1896, Kosel, R-New Lenox) legislation on partisan roll calls and refused to consider the other bills.
House committee bans flame retardant
Despite numerous scientific studies, including one from the U.S. Consumer Products Safety Commission, that show it is safe, members of the House Environmental Safety Committee narrowly passed legislation to ban the most common flame retardant in the United States. HB 1421 (Nekritz, D-Des Plaines) would ban the manufacture or distribution of Deca in mattresses, mattress pads, furniture, televisions, computers, and electronic devices. The IMA opposes this legislation that would make Illinois the first state in the country to ban Deca and could result in increased damage, injuries and death related to fire.
Education Committee studies income tax increase
Despite the delivery of a memo indicating that the bill would be subject to a gubernatorial veto, members of the House Education Appropriations Committee listened to hours of testimony on HB 750 (Miller, D-Dolton). The legislation, also introduced in the Senate (SB 750), would raise billions of dollars for education by increasing the individual (3.0 to 4.8) and corporate (4.8 to 8.0) income tax rates and expanding the sales tax to include services. Further, the legislation would repeal a number of business tax incentives (print ink, etc.) while creating a Family Tax Credit to benefit low-income residents. It also provides a small property tax reduction but does not guarantee the savings. The IMA opposes HB 750 — legislation that raises billions of dollars in new taxes but does not address state spending or debt.
Rate freeze extension passes Senate committee
Members of the Senate Energy & Environment Committee overwhelmingly passed an amendment that would extend the electrical rate freeze for residential (not business) customers across the entire state. SB 1529 (Forby, D-Benton) would roll back rates to levels in effect prior to the January 1 deregulation of the marketplace. The sponsor indicated that he will call the bill for a vote in the Senate if negotiations with utility companies stall. According to the transmission companies, the rate freeze would result in a severe financial blow because they are locked into contracts and would be forced to sell power at a loss. The major credit rating agencies have already downgraded their credit status because of the legislation.
From the IMA President and Board of Directors . . .
Join the IMA in our effort to defeat the Blagojevich tax plan
Gregory W. Baise, President and CEO of the Illinois Manufacturers' Association has a message for you describing the intensive efforts the IMA is about to undertake to defeat Governor Rod Blagojevich's ill-advised gross receipts and universal health care tax proposals. He is also asking for your help in achieving this goal. Log on to http://www.ima-net.org/video/jointhefight.cfm to hear the IMA's message, and then join us in the fight. Working together, we can defeat these proposals and move towards governmental policies that encourage the growth of state revenues by creating additional manufacturing jobs and expanding the tax base.
Are you dazed, confused and stunned about new utility rates? The IMA can help. Contact Mark Frech at 217-522-1240, ext. 3022, or e-mail mfrech@ima-net.org.
Illinois Manufacturers' Association Business Day 2007
Help defeat the gross receipts tax and the payroll tax proposals
Wednesday - May 2, 2007 - President Abraham Lincoln Hotel - Springfield, Illinois -
Business Day offers the opportunity for you to meet with your elected officials to help drive home our message of job growth and prosperity. With your participation, legislators can more completely understand the impact of their actions on the employers of Illinois.
Schedule of Events
12:30–2:00 pm - Business Day Luncheon
Keynote Speaker: Neil Newhouse, Public Opinion Strategies (invited)
Neil Newhouse is a partner and co-founder of Public Opinion Strategies, a national political and public affairs survey research firm whose clients include leading political figures, Fortune 500 companies and major associations. For its work in the 2002 elections, Public Opinion Strategies won the "Pollster of the Year" Campaign Excellence Award from the American Association of Political Consultants. Neil has worked in the field of public opinion research for more than twenty years, has directed the research for thousands of individual projects, and has experience in every aspect of opinion research, including focus groups, "dial" groups, one-on-one interviews, and quantitative research.
2:00–3:30 pm - Breakout Sessions
1. TAXES — A billion here, and a billion there and soon you're talking real money. The General Assembly is considering a gross receipts tax that could cripple the business community and curtail future economic development in Illinois. Find out how you can protect your business from the tax man in this session.
2. HEALTH CARE — Affordability? Access? The Governor and legislature are looking at creating a universal health care system in Illinois. Stop by this seminar to see how it may impact an employer's ability to offer health care benefits to its employees and whether a payroll tax will be imposed on employers to pay for the program.
3. ENERGY — Are you in shock over the price of your electric bill? Attend this seminar and find out how your company can manage its costs in the new competitive marketplace.
3:30–5:00 pm - Lobby your Legislator
Make an appointment to meet with your state legislator at the State Capitol
5:30–8:30 pm - Annual Business Day Reception
Enjoy an evening with your colleagues under the tent at the IMA Springfield Headquarters.
2007 sponsors
Abbott Labs
Bowmark Consulting
Caterpillar, Inc.
Commonwealth Edison
Deere & Co.
Exelon Generation
Exxon Mobil
Illinois Manufacturing Extension Center
State Farm Insurance
Vedder Price, Jim Spizzo
HOTEL INFORMATION
A block of hotel rooms have been reserved for the night of May 2nd. The discounted room rate is $102 and you should mention the IMA when making your reservation. Call the hotel directly at 217-544-8800. The cut off date for reservations is Tuesday, April 3rd. Visit their web site: http://www.presidentabrahamlincolnhotel.com. Register Today! Visit the IMA web site for additional information and to register: http://www.ima-net.org.
Questions? Call Kimberly McNamara at 800-875-4462, ext. 2109 or email kmcnamara@ima-net.org
Other Springfield Highlights available online
