Capitol Report | Summer 2019
Illinois’ New Government Goes to Work
With partisan gridlock largely dislodged, Illinois’ new governor and General Assembly score early victories in their first legislative session.
Marty Green, Esq.
ICPAS VP of Government Relations
In my spring column
(at the beginning of the spring legislative session), I openly questioned
if newly installed Gov. J.B. Pritzker would maximize the “honeymoon” period and goodwill
associated with being a new Springfield politician to pass his comprehensive legislative
program aimed at balancing the state’s finances. I got my answer. Pritzker easily scored early
victories, signed executive orders, and muscled an impressive legislative agenda through the
Democrat-controlled House and Senate.
Included in the governor’s victories are passage of Senate Joint Resolution Constitutional
Amendment 1, which allows for the amending of the Illinois Constitution to move from a flat
income tax rate to a graduated income tax rate; Senate Bill 687, which establishes income tax
rates if Illinois voters approve amending the Constitution in November 2020; House Bill 62,
which puts in motion a $45 billion vertical and horizontal capital infrastructure program; Senate
Bill 262/Senate Bill 1814, which establish the state’s FY 2020 “balanced” state operating
budget; House Bill 1438, which legalizes recreational cannabis; and Senate Bill 690, which
expands gaming and sports betting throughout the state.
The General Assembly also passed legislation to pay for Pritzker’s $45 billion infrastructure
plan with the passage of Senate Bill 1939 and House Bill 142, which raise the gas tax and
vehicle fees to pay for the horizontal program of roads and bridges. The vertical portion will
be funded through the expanded gaming legislation, which restructures taxes on video gaming
terminals and allows for expanding gaming terminals throughout the state and building six
new casinos. This is an impressive list of monumental accomplishments for a first-term
governor, let alone it all came during Pritzker’s first legislative session.
The Illinois CPA Society also had a good legislative session with the passage of Senate Bill
1806, an ICPAS initiative to amend the Municipal Audit Act, County Audit Act, and the
Governmental Audit Act. This trailer legislation updates the cited audit acts to reflect
contemporary accounting and audit practices and terminology and follows ICPAS’ success in
the 2018 spring legislative session where legislation was passed to grandfather units of local
government who use cash basis accounting for financial reporting to the Local Government
Division of the Illinois Comptroller’s Office.
We also monitored over 6,000 bills filed during the spring session. Here are a few highlights:
• Senate Bill 1379 – Cook County Assessor Data Reporting –
A coalition of stakeholders
attempted to work with the Cook County assessor to address our concerns about terminology
and confidential taxpayer information and proposed making the data reporting program a pilot to evaluate the legislation’s impact. Downstate counties would have
had an opt-in option. Ultimately, the stakeholder coalition prevented
this legislation from being called for a vote.
• Senate Bill 1881 – Local Government Recapture –
this comprehensive legislation would allow counties and
municipalities to contract with third-party vendors to perform
analysis on business sales tax payments to the Illinois Department
of Revenue and remit it to local governments. The third-party
vendors would have gained access to confidential taxpayer
information. ICPAS worked with a large stakeholder group,
including the Taxpayers’ Federation of Illinois, Illinois Retail
Merchants Association, State Chamber of Commerce, Illinois
Department of Revenue, and the Chairman of the House Revenue
Committee, Mike Zalewski, to include adequate safeguards for
taxpayer information, registration of third-party vendors, and
creation of a certified audit program for businesses to utilize in
rebutting IDOR referrals. There was a general agreement on
legislative language during the closing days of the spring session
when the proponents filed a last-minute amendment changing the
effective date, thus moving us and the stakeholder group from
neutral to opposed. The bill was not called for concurrence of the
amended language in the House and was not passed.
• House Bill 2975/Senate Bill 1829 – Arbitration –
introduced, provisions in these bills would have prohibited pre-employment
arbitration agreements. Many firms use arbitration
clauses to resolve employment disputes and client disputes. The
U.S. Supreme Court also has recently opined that states cannot
place restrictions on arbitration agreements. In both instances,
ICPAS worked with respective sponsors to generally preserve
arbitration as a venue for resolution of employment disputes.
• House Bill 2127/Senate Bill 1326 – State Procurement Vendor
These bills would require firms and professionals who
provide services to the state through the procurement process to
install spyware on their IT systems. The spyware software
monitors computer keystrokes to measure the amount of time a
vendor employee spends on a state contract. It is our position that
this legislation is a solution looking for a problem (i.e., to ferret out
procurement fraud). There are adequate safeguards to address
procurement fraud in state contracting. This legislation is also
opposed by the Computing Technology Industry Association,
National Association of State Chief Information Officers, and Illinois
State Chamber of Commerce. This bill was not called in committee
for a hearing.
The business community also got a win with Senate Bill 689. This
legislation gradually repeals the Corporate Franchise Tax and
expands the Manufacturing Machinery Credit Exemption and other
specific tax credits.
Initially, it was doubtful that the General Assembly would be able to
pass this long list of transformational legislation. However, Pritzker
and the legislative leaders did something we haven’t seen in some
time — they collectively worked together. They passed an imperfect
but balanced state operating budget and other legislation that
marks the end of partisan gridlock under the Capitol Dome. Now,
let’s hope that the passed transformational legislation will allow the
governor to restore fiscal stability in Illinois and position the state
to be a Midwest leader again.
Author’s Note: This column includes my personal observations of the evolution
of the legislative environment and are not necessarily the views of the
Illinois CPA Society.