SATURDAY SPECIAL UPDATE: Senate Dems propose election year tax breaks...Crime update...Unemployment Insurance Trust Fund
April 2, 2022
Good morning. It’s nice to be writing this with a cup of coffee in my hand instead of in the middle of the night.
The House and Senate are OUT today. The House returns tomorrow at 4. The Senate comes back Monday. The Governor has nothing on his public schedule.
Here’s a quick rundown as the legislature takes (most of) the weekend off.
And, if you aren’t a paid subscriber, here’s our obligatory ask for you to join us for just $7.99 a month or $75 for a year.
Let’s get to it.
SENATE DEMS PROPOSE TAX BREAKS
Seemingly out of nowhere Friday, Senate Democrats announced a package of $1.8 billion in tax breaks, including direct checks to taxpayers.
Much of the package is in addition to breaks Governor JB Pritzker laid out in his budget proposal, but many of the tax breaks are temporary.
It includes direct checks to families making under $500,000 per year, a holiday on sales taxes on schools supplies and clothing, as well as a a six-month cut in the grocery tax and a motor fuel tax.
Top budget writer Sen. Elgie Sims (D-Chicago) said the proposal is being written within the new state budget and won’t require cuts in existing programs or tap in to federal American Rescue Plan funds.
“As we were going through the budgeting process, additional revenues had been made available,” Sims said. “We've looked at those revenues. We looked at the governor's budget that was proposed in February. There was a billion dollars in tax relief that was planned there. So the tax relief that was planned, we've built on that, based on the new revenues which are available.”
Republicans were skeptical of the plan. Senate Republican Leader Dan McConchie (R-Hawthorn Woods) called the proposal a “disingenuous gimmick.”
“The Senate Democrats’ proposal appears to be just another election year stunt,” McConchie said in a statement. Under their plan, checks and relief will arrive right before the election and then will expire right after the election. This is not the real reform the people of this state want and need, and Illinoisans will see right through this disingenuous gimmick.”
CRIME PACKAGE MAY NOT INCLUDE PENALTY ENHANCEMENTS
A group of liberal lawmakers said Friday they want public safety dollars to be used to include youth programs and funding a witness protection program.
More from our friends at Capitol News Illinois:
Sen. Robert Peters, D-Chicago, said the investments outlined in the proposals are aimed at addressing a “30- to 40-year Groundhog Day-like history” of what he called the “failed tough-on-crime status quo.”
“Fundamentally, I'm of the belief that I wish we did a lot yesterday and yesterday and before that and before that decades ago,” Peters said. But the goal now, he said, is to “turn the boat around,” from “a deep state of crisis.”
Their proposals were largely appropriations-based, requesting nearly $240 million in funding increases from the current fiscal year for intervention programs such as early childhood education and after school programs.
But they also included a grant program for establishing anonymous tiplines across the state in an effort to help solve crimes, as well as a program aimed at expanding a witness protection program for those involved in bringing violent criminals to justice.
Those programs, according to House Assistant Majority Leader Jehan Gordon-Booth, D-Peoria, would have the most immediate impact on crime reduction of the measures mentioned Friday at the Capitol news conference.
“We have to be mindful that when we're seeing crime and violence, oftentimes, the majority of the time in all of our communities, the crime is being perpetuated …(by) a small group of folks,” she said. “If we give law enforcement the tools to be able to solve the crimes, and we're able to get these small group of folks off the streets, that produces a significant turnaround that we see in communities relatively quickly.”
I’m told law enforcement has not been included in, or even made aware of, any sort of legislation that would increase penalties or specifically target the rise in crime in the state. Lawmakers who helped draft the criminal justice reform bill passed last year have been tight lipped so far.
UNEMPLOYMENT INSURANCE TALKS
We told subscribers about this yesterday:
Democrats in the legislature will admit that when they passed a plan spending $2.7 billion in federal bailout dollars toward the around $4.5 billion hole in the Unemployment Insurance Trust Fund, it would be up to business and labor to figure out the rest.
The Unemployment Trust Fund is the pot of money used to pay unemployment claims and is paid for by business and payroll taxes. The fund went heavily into the red during the pandemic, especially with an unknown amount of money being paid out in fraudulent claims.
The legislature has tasked business and labor to reach an “agreed” bill to settle the remaining balance. When the legislature knows it has a controversial topic that could make a lot of people on either side angry, often they will defer to both sides of an issue to hammer out an agreement that is acceptable to all sides, though nobody is ever truly happy with the final solution. That typically allows a more bipartisan vote and keeps the heat off of incumbents when it comes re-election time.
Business interests and labor are all at the table. Business wants as few new taxes on employers as possible, though they admit it was unavoidable in the current situation. Labor interests want as few benefit cuts for unemployed workers as possible. A combination of the two (among with a plethora of complicated, less significant options) are likely part of the solution.
It also seems as if Republicans we’ve spoken to will be unwilling to put votes on any bill that increases taxes on employers. Some Democrats may be reticent to support any sort of benefit cuts because they feel the $2.7 billion of federal dollars was a de facto tax credit for business. So even an agreement has a hard time getting legislative approval.
Both sides appear to be talking, but none of the sources we spoke to Thursday were particularly positive about the status of the negotiations. Though, to be fair, nobody said it’s a lost cause, either. But it doesn’t sound like they are not close to an agreement.
Illinois Retail Merchants Association President and CEO Rob Karr, one of the point people on the business side of discussions, told me last night that he didn’t want to discuss negotiations while they are ongoing. An AFL-CIO representative did not comment on negotiations.
That’s all we have for this morning. Follow us on Facebook and Twitter. Or drop me a note with any questions or comments you may have at patrick@theillinoize.com.
It’ll be a crazy one next week.