SPRINGFIELD HIGHLIGHTS - JANUARY 6, 2012
Friday, January 6, 2012 at 2:13PM Obama Administration and NLRB
In the course of the past month, the Obama Administration has announced a broadside against manufacturers and the employer community using the National Labor Relations Board. After three years of failing to convince Congress to pass the Employee Free Choice Act, the crown jewel of organized labor, the hand-pointed political nominees on NLRB circumvented Congress and passed rules allowing “ambush elections” and requiring employers to hang posters informing employees of their rights to unionize and strike. Finally, late this week, President Obama used recess appointment powers to appoint three new members to the NLRB despite the fact that Congress is not officially in a “recess.” The IMA strongly opposes these actions that are a clearly political and designed to curry favor with organized labor in an election year. Fortunately, late this week, the Court sided with the IMA, NAM, and other business groups who opposed this rule and provided a delay on implementation of the rule until the court case is decided.
President Obama’s appointments to NLRB come only weeks after the nominees were named and before Congress had the opportunity to schedule hearings. The last-minute appointments came days after Craig Becker’s term expired on December 31, leaving the NLRB with only two members and unable to issue any decisions or opinions.
Several years ago, President George W. Bush was faced with a similar decision and chose not make appointments while Congress was officially not in “recess” in order to avoid violating the law. At the time, Senator Majority Leader Harry Reid kept the Senate in session to avoid allowing President Bush to make recessed appointments. However, in 2012, Senator Reid and other Democrats encouraged President Obama to make the selections while chastising Speaker Boehner and Republicans in the House for not recessing.
The “ambush election” rules would provide employers with as little as 10 days notice to communicate with employees before union elections. In many cases, employers would have far less time to educate their workforce. Additionally, the NLRB’s Specialty Healthcare decision allows the formation of multiple new unions, including small, micro-unions within companies.
This 194-page rule is set to take effect on January 31, 2012, but the National Association of Manufacturers and others have filed suit and asked for a delay in implementation until the case is settled. The IMA is supporting this court case and asking that the U.S. District Court rule that the NLRB has overstepped its statutory authority and ignored Congressional intent.
Illinois’ Bleak Fiscal Outlook
Earlier this week, Governor Quinn outlined budget and revenue projections for the next three years that provide no comfort for the business community and residents of Illinois who have witnessed years of financial mismanagement and poor economic conditions that have left the state teetering on the brink of a financial collapse. Despite an influx of nearly $7 billion in new revenue coming into state coffers as a result of the record 67 percent income tax increase passed in the waning hours of the 96th General Assembly last January, Illinois’ financial position has not improved in the last twelve months and actually appears worse today with little, if any hope, of major improvements in the next three years. At the end of three years, under current law, the majority of Illinois’ income tax increase will sunset at the end of 2015 unless it is extended by the Governor and General Assembly.
Today, despite the increase in the income tax, Illinois faces a nearly $5.5 billion debt that does not include an additional $1.5 billion in Medicaid bills that are being pushed into next year and nearly $600 million in corporate tax refunds owed to businesses for three years. Lawmakers reduced funding for some programs in the state budget and made the full $4.3 billion payment into the state’s pension funds. However, the Governor and lawmakers failed to make the needed long-term reforms to the pension system or truly reform state spending.
As a result, the three-year outlook provided by Governor Quinn, required under the new Budgeting for Results law, indicates that Illinois will have $33 billion to spend on the state budget in 2015 which is essentially the same level of funding that exists today. However, in the next three years, Illinois’ required pension payment is expected to jump by 43 percent meaning that Illinois will have to make an annual payment of nearly $6 billion into the pension system. Additionally, while Governor Quinn’s projections call for no increase in spending, Illinois’ health care costs for state employees and retirees are expected to rise by more than 8 percent annually costing another $700 million according to both Assistant Democrat Leader Frank Mautino (D-Spring Valley) and Republican David Harris (R-Arlington Heights).
While Quinn’s projections call for no increase in spending, his budget director noted that some agencies and programs will be cut ranging from 5 to 10 percent. Even with these reductions, Illinois is expected to have an operating deficit of more than $800 million in 2015 at which time the income tax increase is scheduled to sunset reducing tax revenues by billions of dollars.
Illinois continues to stay afloat on the backs of businesses and state vendors who are owed billions of dollars. Many companies and families have experienced bankruptcies and financial hardships because the state is extremely late in paying bills. While Governor Quinn is again calling for short-term borrowing to pay off this debt, there appears to be little appetite by lawmakers to approve the borrowing measure despite the fact that state government is already “borrowing” from its vendors.
Lawmakers return to Springfield later this month with their eyes affixed firmly to the primary election in March and general election in November. The IMA will strongly be advocating for real spending and pension reforms along with the enactment of economic development legislation to begin setting the state back on a road to solvency.
Enterprise Zones Top IMA Agenda
While the IMA plans to engage on many issues during the spring legislative session including tax reform, pension changes, and lawsuit reform, one of the IMA’s top priorities will be leading the effort to extend Enterprise Zones in Illinois. These economic development zones, currently located in ninety-seven areas around the state, are scheduled to begin expiring in 2013. The IMA’s legislation includes a comprehensive reform and expansion of the program that has been deemed to be one of the best economic development tools by the Department of Commerce & Economic Opportunity. With an unemployment rate hovering around 10 percent, Illinois needs to take quick and dramatic action to provide a sense of stability and predictability to job creators and economic development officials throughout the state.
Last year, according to DCEO, Illinois enterprise zones led to more than $2.5 billion in investment and the creation or retention of more than 23,000 jobs. Illinois needs to continue growing these economic development zones and making it easy for businesses to expand and prosper.
IMA/MPAC Public Affairs Conference – January 26
Mark your calendars for the IMA/MPAC Public Affairs Conference in Oak Brook on Thursday, January 26. This special event will feature individual campaign presentations from each of the four political caucuses who will highlight specific races in both the primary and general elections. Additionally, noted election law attorney Andy Raucci will provide a summary of new Illinois campaign finance and disclosure laws and regulations. Finally, the IMA and our political polling operation, We Ask America, will provide new, hot off the press polling data in key races around Illinois.
The event will be held from 1:00 – 5:00 p.m. and space is limited. Additional details will be forthcoming but you can RSVP now to Christine Sisk at csisk@ima-net.org.