Dec 10, 2020

Illinois 2021 Legislative Preview

The Illinois legislature hoped to build on its blockbuster 2019 with a comprehensive energy bill, changes to the tax structure for a Chicago casino to ensure the project’s viability, a worker classification bill for the gig economy, and ethics and lobbying reform. Substantive legislative work for the year had just begun when COVID-19 disrupted these plans. Going from a nearly six-month legislative session to a truncated one of just a few days meant the focus this year shifted to dealing with only essential items like the budget, COVID-19-related matters, and the hospital assessment. Many of the legislature’s 2020 agenda items therefore are expected to re-emerge in 2021.

House Speakership

In the House, following the 2020 elections, Democrats lost a net one seat decreasing their majority to 73-45 (D-R), which is still a supermajority. After nearly four decades leading the House, Speaker Michael Madigan’s tenure may finally be ending. In July 2020, federal prosecutors announced a Deferred Prosecution Agreement with Commonwealth Edison (ComEd), the state’s largest electric utility, related to a bribery scheme involving individuals associated with the longtime House speaker. The agreement states the utility gave contracts, jobs and internships to Madigan’s associates in exchange for favorable legislative action. Subsequently, four individuals including a close confidant of Madigan’s were indicted. Although Madigan has not been charged – and continues to deny any wrongdoing – he is implicated in all but name. Due in part to this ongoing corruption investigation, at least 19 House Democrats, including a member of his leadership team, have publicly stated they will not vote to re-elect Madigan as Speaker when the 102nd General Assembly is inaugurated in January. With 60 votes required to retain his post, Madigan is currently six votes short. With no clear successor and the speaker reiterating his desire to seek another term, it is not clear what will happen. Before committees can be created and substantive business can be conducted, the House must elect a speaker.

Other Leadership Changes

The Senate Republicans have elected a new Minority Leader, Senator Dan McConchie (R-Hawthorn Woods), replacing Bill Brady who took over in 2017. Both Jim Durkin (R-Western Springs) and Don Harmon (D-Oak Park) will continue in their roles as House Minority Leader and Senate President, respectively. In the Senate, Democrats picked up one seat, expanding their supermajority to 41-18 (D-R).

Redistricting

Once 2020 Census data has been received from the federal government, the state legislature is responsible for drawing the boundaries for both state legislative and US Congressional districts. Currently, Illinois has 18 Congressional seats and 177 state legislative districts; however, it is expected to lose one Congressional seat due to population decline. Democratic Governor JB Pritzker, who must sign the new maps into law, has pledged to veto any unfair map. With supermajorities in both chambers, Democrats could override any gubernatorial veto if they chose. Worries among Democratic members about mishandling the mapmaking process and endangering their seats could be an asset for Speaker Madigan in retaining his post as he has decades of experience at this.

Ethics and Lobbying Reform

Ethics and lobbying reform were items the General Assembly was expected to take up in 2020. In 2019, the legislature created a Joint Commission on Ethics and Lobbying Reform, which was supposed to issue a final report by March 31, 2020 with its recommendations. Although the committee met a handful of times, it still has yet to issue its final report. With the announcement of ComEd’s $200 million fine and admission to bribery as well as other indictments, expect to see action on this in 2021. This could include increased lobbyist disclosure reporting and a ban on legislator lobbying.

Energy Legislation

A comprehensive energy package, including nuclear, coal and renewable energy sources, has been a perennial topic at the statehouse. For years, green energy advocates have pushed the state to enact legislation requiring a transition to 100% renewable energy. The Clean Energy Jobs Act would achieve this by 2050, with a carbon-free power sector by 2030 through increased reliance on solar and wind energy. This would build on the changes made in 2016’s Future Energy Jobs Act. These changes would likely be considered with requests from other energy players like an extension of ComEd’s formula rates, a transition plan for coal facilities, and a restructuring of the capacity auction process.  Furthermore, because of the ethical issues that came to light this year, additional scrutiny on utilities is possible. This could include audits, increased reporting of communications with State officials, and limitations on political activity.

Black Caucus Anti-Racism Agenda

Following this summer’s national protests against racial injustice, the Illinois Legislative Black Caucus put together an “Anti-Racism Agenda,” which includes four pillars to address the legacies of systemic racism and ensure equal opportunity for all. These four pillars are: criminal justice reform; education and workforce development; economic access, equality, and opportunity; and healthcare and human services. Among the topics within these pillars are items like enhanced police accountability, abolishing cash bail, ensuring opportunities for Black contractors, and addressing health disparities. The legislation underpinning this agenda was supposed to be unveiled at the fall veto session, which was cancelled due to COVID-19 concerns. The governor, and House and Senate leadership, have all pledged to support the Black Caucus in enacting their agenda, so expect this to be a dominant topic in 2021.

COVID-19 Follow-up

In responding to the unprecedented public health and economic crises created by the COVID-19 pandemic, the legislature created a number of new programs as well as granted the governor extraordinary authority to move money around in an effort to deal with an uncertain budget. With some form additional federal stimulus money likely, expect the legislature to appropriate this money and perhaps add funding to existing programs such as support for businesses or units of local government. To help alleviate the pressure on businesses, Business Interruption Grants were established to provide help to businesses adversely impacted by the pandemic. If businesses remain shut through the first part of this year, additional money may be appropriated, especially if federal funds are allocated for this purpose.

Difficult Budget Choices

In 2020, voters rejected a Constitutional Amendment to abolish the State’s mandated flat income tax and move towards a graduated system. Estimated to raise at least $3 billion each year, this represents a significant defeat for Governor Pritzker who made this his signature legislative initiative. It also presents challenges for the state’s long-term fiscal health. The estimated revenue is equivalent to a percentage point increase in the flat tax on all earners. In his 2020 budget before the pandemic, Pritzker had indicated he would spend this additional revenue on increased funding for schools, additional payments towards the State’s underfunded pension systems as well as its rainy day fund. With a deficit in the current Fiscal Year at $4 billion and in FY2022 at $5 billion, change is necessary. For the coming year’s budget, Pritzker said “painful” cuts will be required. Agency directors were told to prepare 5% for the current year’s budget and 10% for the next. In addition to spending reductions, Pritzker is considering closing a variety of corporate loopholes or eliminating tax credits.

Emerging Industry Issues

As in the past few years, data privacy will continue to be a key issue at the statehouse. Additionally, some form of gig worker classification legislation, which was expected to be a top issue this year, will likely be introduced in 2021. Previous discussion had the bill modeled on a similar one in California, which would require these companies to comply with minimum wage and other benefits standards.