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Illinois End of Session is Fast Approaching

By Alec Laird, MHA Illinois Lobbyist and Vice President, Government Relations for the Illinois Retail Merchants Association

The Illinois General Assembly has a ton to accomplish with very little time to accomplish it in. This week saw little substantive action on the major outstanding issues. Both chambers have adjourned for the weekend. When they return Monday, we expect they will be in session through May 31st - the scheduled adjournment deadline. It will be a very active final stretch. While other subjects will get done, there are two that must be done. Those two are a state budget and redistricting.

BUDGET

The first must-do is the state’s FY 2022 budget. Last week, the state significantly increased their revenue estimate predicting the state would realize $2 billion in additional revenues. They also increased their FY 2022 revenue estimate by $800 million. Moreover, Illinois received $8.1 billion from the American Rescue Plan Act. However, there are restrictions as to how this money can be utilized.

Last year, Illinois borrowed $3.2 billion from a federal program to assist states during a pandemic. Illinois was the only state to do so. This week, the state announced they were paying off the remaining $2 billion, of the $3.2 billion originally borrowed having already paid back $1.2 billion.

Budget negotiators continue to grapple with an alleged $1.3 billion deficit for FY 22 based off the Governor’s introduced budget. The Governor has attempted to use this alleged deficit to argue for taking away over $900 million in tax credits that benefit employers. He has also continued to advocate for limiting the Retail Discount despite the fact it is a reimbursement for services rendered by retailer to the state and the fact the Illinois Department of Revenue collects higher fees on 24 of the 26 taxes the collect on behalf of local governments. Of the credits the Governor is proposing eliminating, it appears those tied to federal law (net operating loss, foreign source dividend income, and advanced depreciation are still under consideration.

REDISTRICTING

The second must-do is redistricting. Every ten years, pursuant to the Illinois Constitution, the boundaries of legislative districts, House and Senate, must be redrawn to re-balance them for population shifts that have occurred over the decade. Likewise, the boundaries of congressional districts will be re-drawn not only to balance for population but to recognize the fact Illinois must merge the current 19 congressional districts into 18 due to population loss. The new maps are expected to be unveiled at literally any moment although congressional districts may come later. You can expect a vote on the maps before May 31st.

ENERGY

Energy reform has dominated a significant portion of the last year-and-a-half with reliability, cost, and the significant benefits Illinois’ deregulated energy market have brought residential, commercial, and industrial customers at the core of the discussion. A push to have Illinois attain a clean energy generation base by 2050 has driven a great part of the discussion. However, that cannot be done without nuclear power. Exelon is pushing for additional subsidies to keep at least some of their nuclear plant operating. Solar operators are pushing to resolve an interruption in solar subsidies. Other issues have included but not been limited to energy efficiency, low-income subsidies, re-regulation of the market, re-regulation of energy distribution (utilities), electrification including electric vehicle incentives and charging infrastructure, a carbon tax, etc.

Private meetings have been on-going for several weeks. It appears the legislators will resume their legislator-only working group meetings this week. The likely outcome is a ‘slimmed down’ energy bill. Exactly what that will mean remains to be seen but will likely include:  some sort of nuclear subsidy, addressing the solar funding issue, moving away from formula rates for utilities but not completely re-regulating them. MHA has communicated repeatedly that ensuring Illinois’ reliability gains are not lost and our significant economic advantage as a result of deregulation is not sacrificed.

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