Pritchard’s Perspective 12/18/17

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Observations and comments about state government by State Representative Robert W. Pritchard.

December 18, 2017

In This Issue:

Making Progress Toward Real ID
Illinois Losing Out on Tax Dollars from Online Sales
The Bicentennial: Make it more than a Birthday Party
10 Reasons to Hire a Vet
Aging and Disability Issues
Unfunded Pension Liability Continues to Grow
Business Continues to Invest in Kishwaukee Education
New Laws for the New Year

Making Progress Toward Real ID
Following the 9/11 terrorist attacks in 2001, Congress passed the Real ID Act in an effort to increase airplane security and set minimum standards for state-issued driver’s licenses and identification cards. Illinois has satisfied 90 percent of the federal requirements and is on track to meet all of the requirements by January 2019.
While many states have already complied with these standards, Illinois’ progress was hampered by lack of funding and legislative interference. A House Resolution in 2007 called for Illinois to ignore the unfunded federal mandate. However, the General Assembly authorized Illinois to comply with the federal law with Public Act 99-0511.
Renewing a drivers’ license or state ID will now take longer so background checks can be completed. A temporary secure paper driver’s license or ID will be issued at the time of application and the permanent license or ID will arrive in 45 days. Until Illinois is fully compliant with all Real ID standards, current Illinois Drivers Licenses and State IDs continue to be acceptable forms of identification for such things as boarding airplanes and entering federal buildings.

Illinois Losing Out on Tax Dollars from Online Sales
Online retail sales are increasingly more popular with shoppers, especially during major holidays, but local units of government are seeing lost tax revenue. The Taxpayers Federation of Illinois in a recent newsletter reported that online retail sales result in a loss of $635 million in local sales and use taxes. You can read the full article here.
Online sales account for at least 8.5 percent of total retail sales in the United States. This has been a significant change in recent years and has made things more complicated for local governments and local tax rates. “Sourcing” for sales tax purposes determines where a sale occurs, which determines who gets the local share of the state sales tax.
Illinois is an origin rather than destination sourcing state, which means the applicable tax rate is where the purchase originates and not its final destination. According to the Federation’s report, Illinois does not have a true sales tax on retail sales. Instead, the state’s sales tax is comprised of four different taxes: the Retailer’s Occupation Tax (ROT), Use Tax (UT), Service Occupation Tax (SOT) and the Service Use Tax (SUT).
Amazon, the country’s largest internet retailer, provides an interesting example. The company has a physical presence in Illinois and is now collecting tax on its sales to consumers in Illinois. The report estimates that there has been an annual increase of some $200 million in state and $52 million in local UT collected as a result of this one company establishing nexus (physical presence in state) and collecting taxes.
I have introduced legislation similar to a Colorado law that levels the taxes paid for on-line versus brick and mortar stores. Action on the bill has been delayed while a court case that could resolve the issue moves to the U.S. Supreme Court.

The Bicentennial: Make it More Than a Birthday Party
As a society we love parties and celebrations but how can we make more out of Illinois’ bicentennial? The clock started the count-down to our 200th birthday as a state on December 3 with flag raising ceremonies around the state.
I am certain that during the next year libraries will feature books and discussions about how the land was settled, our ancestors and public policies that have shaped how we live and work. There will even be building projects to restore life to historic buildings like what the Hinckley Historical Society is doing, but I doubt anyone can afford a new building such as the Centennial Building the state constructed in 1918.
It will also be productive in the next year to think about where we want our state and its citizens to be in the next 100 years. Perhaps we can reflect upon the writings of Thomas Jefferson who helped to frame our liberties, James Monroe who unleashed growth and innovation, and Abraham Lincoln who sought to unite our purpose.
At my Youth Advisory Council meeting last week I distributed an article about author Doris Kerns Goodwin’s focus on our Presidents and the qualities of leadership. Perhaps in the next year we might have a public discussion about the qualities of leadership we desire for the future, how we are developing those qualities in our young people, and electing people with those qualities to lead our state and nation.

10 Reasons to Hire a Vet
Millions of veterans return “home” after their service to an uncertain future. Research shows that 65-80 percent of veterans returning home left the military without a job- but expecting to find meaningful work quickly.
The reality is that many veterans don’t find work because too many civilian workplaces undervalue their experiences. Yet employers say they want employees characterized by punctuality, professionalism, and response to objectives which are taught to military personnel.

The Alcoa Foundation and the Manufacturing Institute recently published ten reasons why manufacturers should hire veterans:

  • Veterans accelerate the learning curve, and can easily learn new skills and concepts.
  • Veterans practice teamwork and understand that this grows out of a responsibility to one’s colleagues.
  • Veterans are proven leaders, and often lead by example as well as through direction, delegation, motivation, and inspiration.
  • Veterans promote diversity and inclusion because they have learned to work side by side with individuals regardless of race, gender, geographic origin, ethnic background, religion, and economic status.
  • They perform well under pressure and understand the rigors of tight schedules and use of limited resources.
  • They have respect for procedure and value accountability.
  • Because of their experiences in the service, veterans are usually aware of international and technical trends pertinent to business and industry.
  • Veterans have integrity and know what it means to do “an honest day’s work.”
  • They’re conscious of health and safety protocols both for themselves and the welfare of others. On a company level, their awareness and conscientiousness translate into protection of employees, property, and materials.
  • They are triumphant in the face of adversity.
  • And if all those characteristics aren’t enticing enough to hire a veteran, federal tax credits are available to many employers that hire qualified veterans. The Work Opportunity Tax Credit (WOTC) ranges from $2400 to $9600 for each veteran hired.

Aging and Disability Issues
I recently attended the Kane County Legislative Roundtable on Aging and Disability Issues. The event for lawmakers served to increase understanding for the impact of state policies and funding uncertainty upon senior citizen and social service agencies today.
Lawmakers heard about the lasting impact of the budget impasse on non-profits and agencies. They saw how in-home and community-based supportive services keeps people in their homes longer at significantly reduced costs. And they were given examples of how short-term policies to reduce public expenditures may actually increase expenditures over time.
This roundtable gave a better opportunity to build understanding and discuss solutions than rallies at the Capitol in the Spring.

Unfunded Pension Liability Continues to Grow
The Commission on Government Forecasting and Accountability (CGFA) saw no improvement in the unfunded liability for the state’s three largest retirement systems last year. In a review of the actuaries’ latest report, CGFA said unfunded liabilities actually grew by $2.65 billion in FY2017 due to insufficient state contributions.
The unfunded pension liabilities are led by the Teachers’ Retirement System (TRS), the largest state retirement system, whose unfunded pension liabilities were $73.4 billion. The next largest deficit is the State Employees’ Retirement System (SERS) which reached an unfunded liability of $30.1 billion. The State Universities Retirement System (SURS) has an unfunded pension liability of $23.3 billion.
Three factors accounted for the significant spike in unfunded liabilities since the year 2000: poor investment returns, a reduction in the calculated return on investments, and insufficient contributions by the State.
According to the report, unfunded pension liabilities will only continue to increase due to the State’s failure to contribute an amount required each year to pay for the retirement benefit granted to its workers.

Business Continues to Invest in Kishwaukee Education
Enbridge Inc., believes it has a responsibility to help train college students for employment in the pipeline industry. The company started a scholarship program at Kishwaukee College in 2015 to help make students aware of careers in manufacturing and to help fund their education. The college will use the latest gift to provide five scholarships for students interested in engineering and welding.
Enbridge operates pipelines in Boone and western DeKalb Counties as well as natural gas distribution utilities and renewable power generation in other locations. In addition to supporting education, the company also provides grants to fire and police departments in its area of operation.

New Laws for the New Year
Many of the laws passed by the General Assembly this year will become effective on January 1st. Here is a reminder of a few of them.

  • Cybersecurity Training for State Employees . Public Act 100-0040 requires State employees to annually undergo training on cybersecurity. The Department of Innovation and Technology will make the training an online course, and include information on detecting phishing scams, preventing spyware infections and identity theft, and preventing and responding to data breaches.
  • The Drive for Life Act. Public Act 100-0041 allows Illinois residents who are at least 16 years of age to register as organ and tissue donors when they receive their driver’s license or state ID cards. Parents and guardians will still have the right to give or revoke consent until the donor turns 18. Illinois now joins the ranks of 48 other states that already allow for this organ donation.
  • For Sale Signage on Cars. Public Act 100-0346 provides that no person can drive a vehicle with signs, decals, paperwork, or other material on windows that could block a driver’s vision
  • Cyberstalking. Public Act 100-0166 makes it illegal to install, conceal, or otherwise place an electronic tracking software or spyware on an electronic communication device without the consent of all owners and primary users.
  • Barack Obama Day. Public Act 100-0037 designates August 4th each year as Barack Obama Day.
  • Protecting Consumer Statements. Public Act 100-0240 prevents a contract or proposed contract for sale or lease of merchandise or services from limiting a consumer’s right to make a statement about the seller or lessor.
  • Fraudulent Opioid Prescriptions. Public Act 100-0564 requires prescribers of controlled substances to check the patient’s prescription history on the Prescription Monitoring Program Database. This would make it harder for individuals to obtain prescriptions from multiple doctors, a practice known as doctor shopping.
  • Unpaid Liabilities Report. Public Act 100-0552 will require each state agency to report the amount of unpaid bills to the comptroller and an estimate of any interest penalties that have accrued on a monthly basis.
  • Higher Education Credit For Veterans. Public Act 100- 0195 creates a system to award college credit to Illinois veterans for the on-the-job skills they acquired during their military service.
  • Cancer Awareness Program. Public Act 100-0224 requires the Department of Public Health to promote programs and awareness of cancer screenings for veterans.
  • Service Dogs for Veterans. Public Act 100-0084 requires the Department of Veteran Affairs to provide returning veterans with informational on how to acquire service animals to help combat PTSD.
  • Research Dog and Cat Adoption. Public Act 100-000323 directs that research facilities assess the health of laboratory dogs and cats following research trials to determine if they are suitable for adoption and encourage adoptions.
  • Distributing Ashes in State Parks. Public Act 100- 0097 allows the Department of Natural Resources to establish rules for appropriately scattering cremated remains in a State park.
  • Insurance Beneficiaries. Public Act 100-0543 encourages insurance companies to more aggressively search for beneficiaries following the death of policy holders.

As we enter a new year, remember my staff and I are available to discuss your ideas and concerns, to help resolve issues, and be a voice for you in Springfield.

-Bob

Bob Pritchard

http://www.pritchardstaterep.org/

District Office 815-748-3494 or E-Mail to bob@pritchardstaterep.com

3 COMMENTS

  1. Yes, Illinois is under the gun because we don’t pay enough taxes. It’s not a spending issue. I’m glad this turn cloak is leaving office. Us normal folks can’t just vote ourselves a raise when Springfield raises our taxes. We end up with less take home pay because the Legislature can’t life within its means.

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