The Illinois race for governor


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The Illinois race for governor

  1. 1. The Illinois Race for Governor: Legal Issues that Could Affect Your Business Rodney J. Boyd Partner Dentons St. Louis T 314.241.1800 CLE Seminar for In-House Counsel June 5, 2014 Chicago, Illinois © 2014 Dentons. All rights reserved. Malcolm Weems Senior Advisor Dentons Chicago T 312.876.6102
  2. 2. Illinois Election Day 2014 • I Governor • II Illinois State Senate • III Illinois State House • IV State Budget • V Relevant Legislation • VI Governor's Race, Fall Veto and Other Important Issues
  3. 3. Governor • Incumbent Pat Quinn –D Chicago • Prior Lieutenant Governor and Previous State Treasurer. • Reputation for being a reformer and liberal. • Obtained office from Governor Blagojevich being impeached. Passed pension reform save $500 Million. • Inherited the multi billion deficit, attributable to pensions, workers compensation, Medicaid and health care vendors. Deficit reduced to $4.9 Billion. • Campaign focusing on tax increase, possible revenue shortfall, reducing debt.
  4. 4. Governor • Challenger Bruce Rauner-R Chicago. • Private Sector Businessman • Entrepreneur and Investments • Fiscal conservative. • Defeated Sen. Dillard R-Hillsdale Sen. Brady R- Bloomington & Treasure Rutherford R-Pontiac in primary. • Campaign focused on mandatory cuts across all state agencies & ending tax increase.
  5. 5. Illinois General Assembly • House Democrats have the super majority with 71 seats to 47 Republicans. • House Democrats picked up 7 seats in last election. • Senate Democrats have the majority with 40 seats to 19 Republicans. • Senate Democrats picked up 5 seats in last election. • Key to Democratic success was the re-map of 2010 and strong fundraising campaign from Speaker Madigan & Senate President Cullerton. • Senate lost super majority but still have advantage of 35-24.
  6. 6. FY 2015 Operating Budget for Illinois • Proposed Budget (Quinn) $38.1 billion • Mid-Range Budget (Passed) $35.4 billion • Actual Funding Revenue $34.5 billion • Transfers from Special State Funded $650 million • Transfer funds need to paid back within 18 months • Income Tax increase measure was voted on; currently will sunset on December 31. • Individual rates at 5% corporations at 7%; will fall back to 3.75% and 5.25% respectively. • This will result in a reduction of $1.6 billion in tax revenue.
  7. 7. FY 2015 Capitol Bill • Capitol Infrastructure Comprehensive Plan $1.1 billion. • (SB 3224) Hutchinson & (HB 3794) Madigan provides the requisite bonding and spending authority with a $600 million increase in General Obligation Transportation D bonding authorization and a $500 million transfer in spending authority away from coal development. Illinois Department of Transportation will oversee projects for roads and bridges. • Final $100 million will be allocated to counties ($18.27 million) and municipalities ($49.1million) for local road and infrastructure projects.
  8. 8. Electoral Referendums • The three non-binding questions will ask the public if the state should raise its minimum wage to $10 an hour. • If income over $1 million (millionare tax) HB 3816 Madigan should be taxed an additional 3 percent to generate more funding for school districts; • And if health care plans should be required to cover birth control. All will undoubtedly be used as campaign issues this fall and in efforts to encourage voting.
  9. 9. Relevant Legislation • SB 346 Edge Tax Credit Madigan & Cullerton (Did Not Pass) • New provisions require that any company seeking a special EDGE agreement with General Assembly approval: • publicly disclose confidential tax information which will be posted on a state website and consent authority for the Department of Revenue to confirm the information’s accuracy; • agree to hire new employees either (1) at a location in a geographic area with high poverty or high unemployment or (2) who reside in an area of high poverty or high unemployment; and
  10. 10. Relevant Legislation • SB 346 Edge Tax Credit Madigan & Cullerton (Did Not Pass) • Submit signed affidavits by the company's chief executive officer or chief financial officer attesting that but for the credit, the business would not locate in the state. • Applicants with less than 100 employees do not need to meet the capital improvement requirements. Senate Bill 346 also corrects and extends the manufacturer’s purchase credit through February 28, 2015. However, the Senate did not act on Senate Bill 346. The manufacturer’s purchase credit is scheduled to sunset this August.
  11. 11. Relevant Legislation • HB 397 (Gabel) Soda Tax increase (Did Not Pass) • Impose 1 cent per ounce tax on soda and sugary beverages, • Only received 2 yes votes in a House committee, an incredible lack of support. • Bill was defeated by business groups and chamber of commerce's. • The tax was projected to bring in as much as $600 million.
  12. 12. Relevant Legislation • SB 353 (Hutchinson) Decouple Federal Quailified Deduction (Did Not Pass) • The deduction now provides manufacturers with a 9 percent deduction based on qualified production activities that occur in the United States. • If passed, the elimination would raise taxes on manufacturers by $100 million. • Opposition from the business community caused this measure to fail..
  13. 13. Relevant Legislation • HB 404 (Nekritz) Motor Fuel Sales Tax (Did Not Pass) • Would transfer 80% of moneys collected from motor fuel and gasohol sales taxes to a new Transportation Reform Fund to pay for highway maintenance and construction, bridge repair, congestion relief, and maintenance for aviation facilities, as well as rail and mass transit. • The current 6.25% motor fuel tax generates $780 million for the state’s general revenue fund used for schools, social services, and public safety. • Passage of the capital projects program forfeited the need for the bill to be called.
  14. 14. Relevant Legislation • SB 3287 (Raoul & Lang) Workers Compensation (Passed) • Overturns a 2012 Appellate Court decision in Mockbee v. Humphrey Manlift Co. and eliminates the workers’ compensation exclusive remedy/immunity relative to service companies that provide safety consulting. • The Illinois Trial Lawyers Association supported the bill, arguing that it clarifies that only the employer or their insurer has protection under the Workers’ Compensation Act and that third party service organizations that provide and sell safety services are not part of the workers’ compensation system.
  15. 15. Relevant Legislation SB 3287 Continued 15 • Opponents pointed out the impact on small businesses that cannot afford full-time safety personnel and use external consulting firms to maintain compliance with OSHA standards and to limit employees’ exposure to injuries. • Removing the exclusive remedy provision will likely result in even more litigation and higher costs for employers. Despite intense opposition from the business and insurance industries, the bill passed both houses, and Governor Quinn will most likely approve the measure.
  16. 16. Relevant Legislation • HB 5701 (Mayfield) Job Applicants History (Passed) • Prohibits employers from inquiries into a job applicant’s criminal history prior to interviewing the potential employee but allows criminal background checks after interviews, following recent EEOC guidelines regarding hiring ex-offenders. • As amended, the bill only applies to businesses with more than 15 employees. The bill has passed both houses. • HB 8 (Flowers) Pregnant Employee's (Passed) • Expands mandated accommodations by employers for pregnant employees beyond current federal regulations, creating a special class of individuals receiving separate and additional benefits. The bill passed both houses and will certainly be approved by the Governor. 16
  17. 17. Relevant Legislation 17 • SB 68 (Lightford) Minimum Wage (Will be a referendum) • Bill would raise the state’s minimum wage to $10.65 an hour by 2016, was not called for a vote this spring. • Illinois’ current minimum wage is $8.25 an hour, the highest in the Midwest and $1 more than the federal rate, but Governor Quinn called for an increase early in the year. • Obviously raising the minimum wage would impact businesses’ operating costs and limit their ability to create new job opportunities. Instead, the legislature voted to put a non-binding advisory referendum on this November ballot, asking the public’s opinion on whether the state should raise minimum wage or not.
  18. 18. Relevant Legislation 18 • SB 3405 (Biss & Williams) Patent Trolling. (Passed) • Help strengthen parameters for patent infringement allegations that will protect employers from patent trolls. • Passed both Chambers. • HB 5622 (Turner & Raoul) Payroll Cards. (Passsed) • The bills allows employers to use payroll cards as an acceptable form of wage payment. • Employee's will given choice of receiving payment by payroll card that can also be used to make purchases, withdraw money from ATM, pay bills. • Employers are mandated to educate employee's about payroll cards and fee's that could be associated with their use.
  19. 19. Relevant Legislation 19 • HB 5564 (Sente & Luechtefeld) Income Tax (Pass) • Mandates that the Department of Revenue must credit any income tax overpayment to a taxpayer's estimated tax liability, either on the original or an amended return, effective January 1, 2015. Under current law, the Department has the discretion of whether to apply to overpayment.
  20. 20. Governor's Race, Fall Veto and Other Important Issues 20 • The outcome of the Governor's race will play a critical roll in what happens to the state income tax. • There was a major tax reform package introduced by the House that was tabled due to election pressures. • Illinois lawmakers failed to pass a progressive income tax measure this year. Efforts to place this issue as a constitution referendum measure failed to pass in both the House and Senate.
  21. 21. Governor's Race, Fall Veto and Other Important Issues 21 • Lawsuit lending legislation. Two bills were filed dealing with lending of funds by a party not involved in the litigation to help pay for the lawsuit in exchange for a share of any settlement or damages awarded. The business community opposed this legislation based on concerns that these lending practices would increase litigation and legal costs. • Supporters of this legislation argue that it will provide more access to the courts for those who could not afford the costs of litigation.
  22. 22. Thank You! We are very interested in your feedback - please take a moment to leave a note about this class and presenters on the back side of your evaluation form. © 2014 Dentons. Dentons is an international legal practice providing client services worldwide through its member firms and affiliates. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please see for Legal Notices. Rodney J. Boyd Partner Dentons St. Louis T 314.241.1800 Malcolm Weems Senior Advisor Dentons Chicago T 312.876.6102