Marion Chamber members attend IACCE Legislative Summit

Members from the Marion Chamber of Commerce attended the Illinois Association of Chamber of Commerce Executives Legislative Summit on February 8 in Springfield.



Here are some notes from the event:

IACCE/Illinois Chamber of Commerce
Legislative Summit – February 8, 2017 – Sangamo Club
NOTES
 
MISCHA FISHER, Economic Development Policy Advisor to Governor Rauner

• 2nd largest tax burden in the country
• 2^nd highest debt load in the country
• Illinois will be 100% surrounded by ‘right to work’ states
• 1985: $1,400 for every person in personal property taxes; in 2016 real terms it is $2,000 per captita
• Why are we underperforming?
  • Workers’ compensation differential between IL and neighboring states -- $3-10K more per job created than other states
  • 450 license types – 1 in 3 jobs in IL requires a license (300% more licenses that other states); forces required continuing education and ; barrier to statewide labor force
• How well does the state do other things? Frequently, not well
• Operating without a budget is a major challenge
• IL has been fairly successful at addressing issues that do not require a state budget
• Revenue is at an all-time high
• IDES & IDNR: will soon be able to pay unemployment and payroll taxes via a simple portal; trying to remove barriers to entry (unnecessary licenses) and offer digital licensing
• October executive order by Rauner: ‘Cutting the Red Tape Initiative’
  • Internal reviews of regulatory codes
  • Target is an overall 25% reduction in regulation
  • www.illinois.gov/cut
• EDGE job creation tax credit – looking at ways to simplify for businesses of all sizes; currently has employee thresholds that don’t make sense (big difference in how a company with 99 employees is treated vs a company with 100 employees – when there is really no difference between having 99 or 100 employees)
• New THRIVE program that is simpler than EDGE;
• Can the state file bankruptcy? Attorneys say no (although municipalities can); what will happen is that pensions will continue to inflate; current inflow is $33B and outflow is $40B – pensions are about 30% of that
• What policies can help with access to workforce? Single most important is property taxes – we have the highest property taxes in the country (which is an incentive to leave). Number two issues is people leaving because there are better opportunities somewhere else (workers’ comp, regulation, opportunities)
• Capital bill is likely contingent on other negotiations
• The economy only works when people are working
• The economy is in constant realignment (e.g.,
• We can recover if we bring workers’ comp down to the national average; get taxes in check; get violence in check – they are the product of bad decisions mad 20 years ago; best case scenario is that we can fix these issues; worst case scenario is that we don’t
• Good things: we have the 3^rd or 4^th most educated workforce in the country
• Pipeline project will have spillover effects in IL
• IL is underperforming most of the U.S. – federal EPA regulations, occupational licensing and tax reforms can help us, but not as significantly as it would if we were in better shape
• How to balance initiatives of reducing state regulations with municipalities that are being threatened by property tax issues? What prevents municipalities from generating revenue by creating additional licensing requirements, etc? Municipalities go to businesses when they need more money. Layers of government need to shrink – IL is at 6,500, which is twice as much as the next highest state

 
PAUL LaSCHIAZZA, PRESIDENT OF AT&T ILLINOIS

• Broadband infrastructure is critical for economic development
• AT&T’s annual infrastructure improvement worldwide is approximately $22B ($1B in Illinois)
• Fewer than 10% of homes in AT&T’s territory want a dedicated voice line
• Illinois is one of the most competitive entertainment/communications markets in the world, especially in Chicago
• Every business industry requires updated technology infrastructure
• AT&T is seeking support for policy change – 48 states have already adopted the policy change (IL and CA have not)
• 5G LTE is being built by AT&T right now, which is equivalent to a fiberoptic connection – except wireless
• SB 1381 & HB 2535 are being introduced today (2/8/2017)
• HANDOUT: 2017 Illinois Telecom Modernization
• www.updatethelaw.com
• Is there a TV tax in Illinois’ ‘Grand Bargain’? Could make tax on TV service 7% – www.notvtax.com

 
TRANSFORMING STATE GOVERNMENT – CONNIE BEARD, DIRECTOR, ILLINOIS DEPARTMENT OF REVENUE

• Rauner administration is making state government more competent
• Statewide transformational reform
  • ERP/SAP agency conversion
    • Transitioning to new system for all agencies (streamlined; currently have 300 different systems)
    • Automates financial reporting, payroll, hiring processes, procurement, and asset management
    • Replaces 120+ redundant, non-standard processes with 1 to 2 lean processes
    • Consolidates 75% of 400+ outdated legacy systems into a single, modern, statewide system
    • Will save IL $52M to $193M annually
  • New Department of Innovation & Technology “DoIT”
    • Consolidates state agency IT services
    • Economies of scale
    • Enhanced IT security (and focus on fraud protection)
    • Retiring expensive and redundant legacy systems
    • Working directly with agencies to achieve strategic goals
    • Provides a more mobile and responsive workforce
    • DoIT, IDES & IDOR working together
      • Data analytics at IDOR – refund fraud detection
        • 2015: $5.7M
        • 2016: $20M (250% increase)
      • Unemployment insurance tax collection: leveraging IDOR’s GenTax System
        • Estimated state savings: $17M
        • Consolidated registration and reporting for business taxpayers
        • MyTaxIllinois.gov – view your business tax information in one location
  • State agency administrative hearing reform – centralized administrative hearings
    • Eliminate case backlogs
    • Reduce dispute resolution time
    • Enhanced ALJ training
    • Consistency in administrative process between state agencies
    • More transparency for taxpayers
  • “Cutting the Red Tape”
    • Executive Order 2016-13: all state agencies are undertaking a comprehensive review of existing rules and regulations to determine which ones are outdated, repetitive, confusing, unnecessary, or harmful to the economy
    • Illinois Competitiveness Council
      • Ensuring that state agencies evaluate their regulations using the guidelines of EO 2016-13
      • Online portal for the public to share ideas for simplifying or reducing regulations
      • www.CuttingTheRedTape.com
  • Lean management training & implementation
    • Lean management seeks to eliminate any waste of time, effort or money by identifying each step in a business process and then revising or cutting out steps that do not create value
      • Ongoing state agency training
      • Team recommendations for change
      • Over 200 managers already trained at IDOR
      • 67 teams already reviewing operations
      • Focus on continuous improvement: the parking lot
  • Other initiatives
    • State employee code of conduct implemented
    • HHS/DCFS/DPH unified system launch
    • IDES claims enforcement/job search requirements – now tracking and verifying that job seekers really are looking for a job
• Service tax: how to construct constitutionally so that winners and losers are not being arbitrarily selected? Fiorito vs Jones (IL Supreme Court in ‘80s). Biggest moneymaker would be on contractor services (this would be devastating to our economy). Looking at WI consumer service taxes, which are set up as separate occupation taxes on those services; will be set up administratively the same as sales tax. Litigation would be expected if IL tried to roll services into the current sales tax.
• Main Street Fairness Act – online purchases are having a significant impact on sales tax dollars; because of Illinois’ position as a distribution state, many of the ‘big players’ (e.g., Amazon) have had to register, and therefore must collect sales tax on online purchases

 
TODD MAISCH, PRESIDENT & CEO, ILLINOIS CHAMBER OF COMMERCE ON STATE OF ILLINOIS ‘GRAND BARGAIN’ AND EDUCATION FUNDING

• Grand Bargain
  • ‘Grand Bargain’ includes 13 bills as one package; IL Chamber is currently opposed; a number of conversations are ongoing to improve the package
  • Healthcare – would like to see a rebalance of Medicare (e.g.,
  • Response to argument that workers’ comp rates are so high because insurance companies are corrupt (Rep. Jay Hoffman): IL has one of the most competitive insurance markets in the country; AND many large companies self-insure (e.g., Caterpillar); costs are way out of line with other states – five times higher than Indiana
  • Service tax – chooses winners and losers; a rate as low as possible and as broad as possible is the best option if a service is inevitable
  • Expect a tax increase
  • Need pro-growth initiative in IL in order to get our economy where it should be
  • Workers’ comp bill that was introduced was not adequate, not a game changer
  • Pro-growth initiative: Small Business Investment Credit, a policy that will help small businesses be successful; a great opportunity to make a stand for small business
  • Data centers – uptick of bringing data centers into Illinois; currently getting our tails kicked by Iowa on data center locations
• Home Rule County Municipality Procedure Act
  • Largely a city of Chicago issue, but for any other municipality that doesn’t have a process for changing rules… they just make the rule and it becomes policy
  • Local chambers look at their municipalities’ processes, see if we can engage in a discussion to ensure inclusive decision-making processes are in place
  • You can make a decision, but we need to require a transparent process that is well thought out; intent is not to dictate everything
• Education Funding (Todd & Katie w/ IL Chamber presented because Senator Jason Barickman went into caucus)
  • IL Chamber established an Education Task Force to conduct research and provide guidance
  • Education Funding Reform Commission delivered their report February 1: no specific funding formula endorsed; want to be certain funding levels are fair; would like to see property taxes drop but don’t have a way to make that happen; this could lead to a bill but it is unknown what that might look like
  • Difficulty with education funding is that it is so localized – how to make it equitable across all districts to provide

 
KEVIN COURTOIS – U.S. CHAMBER OF COMMERCE GREAT LAKES REGION

• Regulatory reform: presidential executive orders; Congressional Review Act; want to make structural changes to Administrative Procedure Act via the Regulatory Accountability Act (passed House)
• Tax reform: House Republicans ‘Better Way Agenda’ designed to simplify processes; lower corporate tax code to 20%
• Healthcare: expecting ‘Obamacare Repair’ because Republicans are realizing how complicated our health care system is – it’s difficult to repeal; can only repeal items that have a budgetary impact; expect Medicaid and liability reform; expect discussions of state high-risk pools
• Infrastructure: Trump’s $1T proposed infrastructure package; president sees it as a business issue – presidential pet project; possibility for bi-partisan effort; focus on multi-modal large iconic projects like telecom, rail; the list currently circulating in D.C. is fluid; contact members of Congress now with projects in your area
• Trade: took a hit; U.S. Chamber is not moving TPP forward; focus on enforcement of existing trade agreements; U.S. Chamber is for free trade, wants encourage moving into additional markets;

 
ADVOCACY/GOVERNMENT AFFAIRS PANEL MODERATED BY MIKE PAONE, IOM – JOLIET AREA CHAMBER OF COMMERCE & IACCE GOVERNMENT AFFAIRS COMMITTEE CHAIR, NATHAN HOFFMAN – ILLINOIS CHAMBER OF COMMERCE, KEVIN CORTOUIS – U.S. CHAMBER OF COMMERCE

• IACCE has a strategic goal of encouraging and assisting local chambers of commerce
• What is a good first step in advocacy involvement?
  • KC: U.S. Chamber has a government affairs advocacy training program, through which local chambers can have U.S. Chamber staff come and do a presentation to: identify key issues; establish a broad policy agenda (the more specific you go, the less latitude you have to act); inform elected officials and the community via op-eds, white papers, etc.; build out grassroots networks; follow up and thank elected officials who vote in favor of your positions – and hold accountable the ones who don’t; the chamber brand is strong – use that to your advantage
• How to formulate a letter, make a phone call to an elected official?
  • NH: keep letters brief and to the point; don’t bog it down with language that is technical; have an eye-catching and creative subject line that will encourage the recipient to open the email (e.g., “Stop the tax on jobs” is good); include our position, why it is important, and ask where the issue stands; approach depends on the relationship you have with your local, state and federal legislators; always convey economic impact and how many members strong you are
  • KC: a phone call is still a very effective way to communicate – it’s personal and establishes a relationship; you’re communicating with the either the decision-maker or the person who has direct access and influence with the decision-maker
  • KC: 100% of legitimate policy concerns will get a response; it is all tracked, and the messages do get through – this is why activating members via grassroots efforts is critical; tally based on ZIP code
  • NH: someone will always answer the phone; but someone won’t always see or take the time to read email correspondence – but they will notice volume; try to mobilize businesses to make calls as well – eventually the volume will make an impact
  • Also communicate policy positions via social media
• How to take time to talk about possible legislation vs. actual issues that have turned into bills – real bills vs possible bills?
  • NH: if a bill is in concept form rather than real form it is difficult to demand action – in this case it would be better to educate an elected official
  • KC: if you’re talking to staff, especially at the federal level, it’s good to educate; there are a lot of young people on the Hill who don’t know much about the issues they’ve been asked to work on for their legislator – take that opportunity to provide education and your perspective; be early – if you’re not at the table, you’re on the menu
• What is the importance from legislator perspective on in-person visits?
  • NH: in a world where communications are electronic, in-person meetings with legislators are very important, and a great way to begin building a relationship; meetings in Springfield are hard to get due to scheduling, so be sure not to waste their time and make your comments concise
  • KC: D.C. fly-in program through the U.S. Chamber; there is a dedicated staff person for when chambers of commerce visit Washington; D.C. visits help communicate to members the value of advocacy
• What is the balance between ‘being nice’ on legislative visits and holding their feet to the fire? A Springfield legislator told a chamber executive that she was ‘too soft’ on a lobby day visit.
  • KC: it all comes down to preparation
• Political Action Committees (PACs)
  • NH: having a PAC is beneficial because when legislators are champions for things we value, you can reward them; when it’s the opposite, you can work to run a candidate against the incumbent; opportunity to let people know the chamber is watching; everyone has someone in their membership who would be interested in running for office at some point, so chambers can play a big role in identifying good candidates
  • KC: a good next-level move is candidate engagement; it’s a lot easier to get policy agendas through a legislative body when legislators are like-minded; a PAC is a very strong tool to advance issues; recruitment of candidates; candidate recruitment; host mixers
• What are the main goals? How can we measure the impact and success of our advocacy efforts?
  • KC: measure victories – building relationships is a win; identify issues and ‘keep score’ on votes – this can be used to reward legislators and decide whom to support; use advocacy as a selling tool
  • NH: there are literal ways to quantify success – track email open rates and clicks; first, realize you won’t win anything, but you can judge success based on engagement with members – even if you lost, you may still have won