Public Policy Newsletter
|Thursday, August 18, 2016
These are extraordinary times in U.S. presidential politics, with the conventions behind us and the final 82 days of the election well underway. Given the unusually harsh rhetoric, unexpected events and erratic polls, it’s no surprise that the business community is expressing concern.
Last week, the Wall Street Journal reported that “for the first time in this election cycle, most economists surveyed believe uncertainty from the coming vote is crimping economic activity.” Nearly 60 percent of the survey participants said the economy has suffered, at least somewhat. Uncertainty about what to expect in terms of future taxes and regulations under a new administration fuels the pessimism.
In Chicago and Illinois, the business community faces its own unique circumstances of serious challenges – adding yet more layers of uncertainty.
The Chicagoland Chamber of Commerce believes that businesses are now at a tipping point due to the compounding effect of new City property taxes, a re-increased County sales tax, Chicago-only ordinances for a higher minimum wage and paid sick leave, the plastic bag ban, and increased Cook County hotel tax. And it could get worse, as the City ($138 million) and County ($174 million) each project budget gaps for fiscal year 2017 that may again require new taxes and fees.
To put the taxes and fees in perspective, the City of Chicago will have raised well over $1.1 billion the past year, while simultaneously asking the business community to pay for new mandates such as paid sick leave benefits, a $13/hr minimum wage by 2019, and a costly and ineffective plastic bag “ban”.
Our initial conversations with County and City officials have shown the largest driver of the budget gap for both the County and City continues to be wages and benefits. For example, at the Chamber’s recent Tax Policy Council on August 16, the City’s Budget Director shared that more than half of the City’s current deficit, estimated $70 million, is due to an increase in employee wages and benefits. Given these facts, one way the City could best address its structural deficit is to slow the rate of growth in wages and benefits. The Chamber is advocating that future wage and benefit contracts be tied to revenues as projected by the City’s own Annual Financial Analysis, so that taxpayers and city employees know there is certainty in costs and resources.
Now more than ever, the Chamber’s government affairs team is working hard at the city, county and state level on behalf of our members and the business community to question tax and regulatory proposals while forcefully advocating for smart, pro-business policies that encourage economic growth and new jobs.
In addition, the Chamber is talking to our members on some pro-active policies that we will be developing for our 2017 legislative agenda at all levels of government. There are some exciting things to announce over the next several months, and we are looking forward to sharing the news with our members.
See the Chamber’s public policy updates below for the City, County and State:
City of Chicago
City Budget – The City of Chicago announced a $137.6 million budget deficit, its lowest since 2007. The City is not expected to increase property taxes again for additional revenue, however, new water and sewer fees totaling $239 million by 2020 and 2021 to pay for the municipal employees’ pension fund were proposed by the City to be voted on at the next City Council meeting on September 14; plus, the Chicago Board of Education will seek to pass a $250 million property tax increase at its next meeting on Wednesday, August 24, to fund the Chicago Teachers’ Pension Fund.
The Chamber understands that new and dedicated revenues to properly fund the City’s long-standing and neglected pension obligations are the only real option remaining in the City’s arsenal to fix its fiscal challenges built up over decades. But the multiple layer of new taxes and crippling mandates and ordinances will have a profoundly challenging impact on neighborhood-based businesses, the backbone Chicago’s economy. We will continue to fight hard to stop or to minimize the impact of these obstacles to starting, owning and growing a small business in Chicago.
Chicago Employer’s Expense Tax (aka the “Employee Head Tax”)
Alderman Carlos Ramirez-Rosa (35th Ward) introduced the Chicago Employer’s Expense Tax which would charge businesses with 50 or more employees $16 a month per full time employee.
Chamber Action: The Chamber has expressed its opposition to the Mayor’s Office and aldermen. The ordinance now sits in the Committee on Committees, Rules and Ethics. We will continue to follow this ordinance closely and keep members updated.
The next Chicago City Council meeting is Wednesday, September 14 at 10 a.m..
County Budget – The County announced a $174 million budget deficit. The Chamber continues to engage in discussions with Cook County Board President Preckwinkle’s office and County commissioners to reiterate deep concerns about any additional new taxes or fees to fix the budget deficit. Much like the City of Chicago, the cost drivers behind much of the budget gap are wages and benefits.
Drug Take-Back Ordinance
On August 2, the County Committee on Legislation and Intergovernmental Relations held a subject matter hearing on a proposal introduced in March by Commissioner Larry Suffredin (13th District) that deals with the safe disposal of pharmaceuticals. The ordinance would require:
- Prescription drug manufacturers to implement a drug take-back program; and
- Each producer to fund and administer a stewardship plan for the collection, transportation, and disposal of unwanted covered drugs.
Chamber Action: Michael Reever, vice-president of government relations, testified in opposition to this proposal focusing on the additional reporting requirements, costs and fees that would likely result in higher prices for prescription and non-prescription medications.
The next Cook County Board of Commissioners meeting is Wednesday, September 14.
State of Illinois
There are no updates.
The Chicagoland Chamber of Commerce remains focused on our mission to serve our members by supporting pro-business policies that foster a more competitive economic climate for our region and Illinois. Our government relations team works with elected officials at every level of government on both sides of the aisle to protect our member interests. We are working every day at the City, County and State level of government to serve you.
About the Chicagoland Chamber of Commerce
The Chicagoland Chamber of Commerce represents over 1,000 member companies, their 400,000 employees, and over $24 billion in revenue. We combine the power of our membership with our legacy of leadership and business advocacy to drive a dynamic economy. We focus on delivering value for our members, making Chicagoland a world-class place to live and work. Visit ChicagolandChamber.org.