New State Laws For A New Year

With the end of the year approaching, State Senator Pamela Althoff (R-McHenry) said several new measures will become law on Jan. 1 plus there are a number of issues that will come before the General Assembly in the upcoming session. 

Althoff said one of those issues could be a proposal to enact a progressive income tax in Illinois. 

The prospect of Illinois moving to a progressive, or graduated, income tax attracted attention in early September and some lawmakers are still floating the idea to make it a reality in Illinois. Opponents say that the graduated tax discussion is a thinly disguised attempt to increase taxes on most Illinoisans and a way to keep the temporary tax increase enacted in 2011 permanent.

Thirty-four States plus the District of Columbia have graduated income taxes. The national Tax Foundation compiles information on tax rates across the country that can help the public determine how a graduated tax might play out in Illinois.

While proponents of the graduated tax claim that only those earning more than $150,000 a year in Illinois would pay higher taxes, that has not been the case in other states. Taxpayers with incomes of $50,000 or more pay a higher rate than Illinois’ current 5% rate in two-thirds of the states that have a graduated tax.

Imposing a graduated tax would require amending the Illinois Constitution, as it currently prohibits a graduated tax. 

Tax money not used as promised

Althoff said Senate Republicans have warned since the passage of the 67% income tax hike that unless Governor Pat Quinn and his fellow Democrats took major steps to cut spending, the state would face a major financial cliff when the tax was promised to expire.

Although the tax increase was sold to the public as a way to pay off old bills and get the state’s financial house in order, much of the money has instead been used to expand state programs.

Illinois has embarked on a major expansion of Medicaid, including an early and optional expansion in advance of the implementation of the federal Affordable Care Act.

House and Senate Republicans have expressed concerns that the Quinn administration is not aggressively implementing Medicaid reforms needed to save the state millions.

Attorney General’s Christmas toy warnings

Each year the state’s Attorney General releases a Safe Shopping Guide—hoping to address the growing concerns of recalled children’s products being sold on secondhand websites such as eBay, Craigslist and Amazon.

As the holiday season nears, Attorney General Lisa Madigan warns consumers about the dangers of buying toys that have been found by the U.S. Consumer Product Safety Commission (CPSC) to be choking, noise or chemical hazards. Although recalled products must be removed from store shelves, many of these products can be found online – posing risks for children.

The 2013 Safe Shopping Guide features nearly 100 different children’s products that have been recalled due to defective components.

Countdown to new laws

The countdown continues to January 1, when more than 200 new laws will go into effect. But, not all laws going into effect will have a positive effect on the state.

The process of having a criminal record expunged (or wiped clean) is the focus of one controversial new law. During the past week, the problem was highlighted when the Chicago Sun-Times ran a two-part story on a Quinn administration official who holds a six-figure position, despite two dozen arrests and having been fired for lewd and inappropriate emails.

The individual had been able to have much of his criminal record expunged. House Bill 2470, which passed with no Republican support in the Senate would make the process easier for convicted criminals. The measure passed despite concerns raised by the Illinois State Police during committee hearings about its potential impact on public safety.

Small businesses opposed bills

A trio of measures opposed by small businesses also will go into effect January 1. All were approved despite unanimous Republican opposition in the Senate.

Opponents raised concerns because all three measures impose new regulatory burdens on smaller employers, while exempting large unionized companies from having to meet the same requirements.

They fear increased regulatory burdens will further harm the state’s small businesses at a time when Illinois has the second highest unemployment rate in the country and questioned why regulations were being applied unevenly. The state’s major small business organization, the National Federation of Independent Business (NFIB), opposed all three bills.

House Bill 923 requires construction companies to report payments to nonemployees for construction services.  Proponents argued it would ensure that contractors are properly funding workers’ compensation and unemployment insurance by paying related taxes. However, the legislation offered an exemption that can only be met by union contractors.

Kim Clarke-Maisch who is the Illinois State Director for the NFIB, said her organization fears innocent employers could be hurt for honest mistakes.

“Organized labor contends contractors are erroneously making employees independent contractors in order to escape paying workers’ compensation, unemployment insurance and other related taxes.  Unfortunately, the reporting comes with a debarment clause that could put many contractors, which make honest mistakes, out of business,” she said.

House Bill 2649 makes changes to Illinois’ Employee Classification Law and requires hearings for those employers accused of wrongly classifying workers as independent contractors. As with HB 923, proponents argue employers are attempting to evade payroll taxes. But again, the measure was crafted to offer an exemption only to union employers.

House Bill 3223, which requires additional employee information to meet certified payroll requirements under the Prevailing Wage Act, could result in ending an employer’s ability to secure future state work merely for paperwork mistakes, according to Clark-Maisch. 

“The new requirements are troublesome not only for the sheer amount of extra work, but the likelihood that mistakes could be made.  Mistakes under the Prevailing Wage law are costly.  Two violations in five years and a contractor is barred from state work, potentially taking away someone’s livelihood and the jobs they create,” she said. 

Child Deaths Probed

Finally, a special Senate Subcommittee held a hearing in Chicago to quiz the state’s child protection agency on recent media reports that show a record high number of child deaths from abuse and neglect under the Quinn administration.

In the last fiscal year (which ended July 1), 111 children died in Illinois from abuse or neglect, the most since annual records began in 1981. Senators were particularly interested in the cases of 68 children in Fiscal Years 2011 and 2012 who died despite the fact that DCFS had been involved in their cases.