Gov. Rauner Moves Forward on Pro-Small Biz Agenda

It’s 2015 and Illinois small business owners have a reason to feel optimistic.

Gov. Bruce Rauner promised to “shake things up” during the campaign and, after being sworn-in, he is showing no signs of backing away from his pro-business agenda.

But, before we get too excited we must remember the Governor still has to deal with a super-majority of Democrats in the House and Senate. So while not impossible, Gov. Rauner is going to have to use every skill from his successful business past to get things done. So, let’s preview Gov. Rauner’s wish list and compare it to what Democrats are likely to push in the Legislature.

This is not only one of the top priorities for Gov. Rauner, but it is the top priority for NFIB and many other business groups. While some changes were made in 2011 to Illinois worker’s compensation law, it barely made a dent in what is a huge cost driver for employers in this state. The most important reform is changing our causation standard so Saturday morning softball injuries don’t become Monday morning worker’s compensation claims leaving employers on the hook for medical costs and payouts.

In general, Democrats are reluctant to change Illinois’ causation standard because their key constituency, organized labor, has been adamantly opposed. However, expect this issue to be used as a bargaining chip for something Democrats really want: a minimum wage hike.

Senator Kimberly Lightford (D-Chicago) has been pushing a minimum wage hike for the last several years. She passed a bill out of the Senate last year raising the wage to $11, but it never received a vote in the House. Speaker Michael Madigan has publically said he doesn’t have the votes in the House to pass the wage hike. Former Gov. Pat Quinn made a lot of noise about raising the wage but never had the cache to get it done and faced fierce opposition from the business community. In the meantime, the city of Chicago passed an ordinance raising its wage to $13 per hour, which has caused further friction on the issue.

Gov. Rauner has left the door open to raising the wage but only if it is tied to several business reforms, like changing the causation standard under worker’s compensation, tort reform and unemployment insurance reform.   

There is some thought that Rauner might be able negotiate a dual track bill that will give Democrats a minimum wage hike while reducing business costs for employers. Of course the question for the business community is whether the added cost of hiking the minimum wage is offset enough by reforms pushed by the Governor.

A perennial favorite of liberal leaning Democrats, this idea has been introduced over the last several years but stalled out by both political sides concerned with costs for employers. However, President Barack Obama in his State of the Union Address once again highlighted and elevated the issue.  

It is very likely we will be debating this issue more seriously here in Illinois. While Gov. Rauner is likely a veto, nothing stops the Democrat majorities from passing a paid leave bill out of their respective chambers and giving their left flank a win all the time knowing Gov. Rauner will veto it.

This is where a lot of fireworks are expected. Gov. Rauner has not been shy about touting a service tax as he believes it better reflects today’s modern economy. He argues Illinois, and many other states, no longer have a manufacturing base but that the growth is in the service sector and this shift should be reflected in our tax code.

Illinois only taxes a handful of services, and this has been one of the few bright spots in our state’s tax code along with our flat income tax.

However, with the massive debt the state has rung up over the last several decades it is highly anticipated Gov. Rauner will seek to reform our current tax code. NFIB members have time and again opposed a service tax. If Gov. Rauner is serious about overhauling our tax code he will need to ensure small employers that they will not be left holding the bag.