Legislative Session Ends With Victories, Misses for Small Businesses

Date: June 02, 2021

Here’s a recap of this year’s legislative session from NFIB State Director Mark Grant:

The General Assembly was supposed to gavel to a close by midnight on Monday, May 31, but they didn’t quite make it because they saved so many important bills until the last minute. 

Lawmakers didn’t receive the 3,000-page budget bill until only an hour before the vote. One surprise in the $42 billion spending plan: $1 billion in capital projects paid for with federal pandemic recovery funds, mostly in Democratic districts. Republicans protested, but the bill passed as written. 

Still, the state budget is closer to being balanced than it has been in many years because of the federal recovery funds and higher-than-expected tax revenue. 

Small business victories

NFIB supported Senate Bill 2531 sponsored by Sen. Win Stoller. The measure will provide tax relief to small businesses by allowing pass-through entities such as S-corporations and partnerships to bypass the $10,000 cap on the State and Local Tax (SALT). This legislation could help as many as 400,000 business owners save thousands of dollars annually on their federal tax filings but would have no impact on state coffers. 

The legislature also passed ethics reform following the many indictments of lawmakers, lobbyists, and “consultants” over the past several years. Critics say it doesn’t do enough to discourage political shenanigans, but it’s a step in the right direction. 

Meanwhile, many of the bills opposed by Illinois’ small business failed to pass, including: 

  • Mandatory paid leave 
  • A $20 minimum wage for essential workers 
  • Wage insurance 
  • Rent-control preemption 
  • A financial transaction tax 
  • Predictive scheduling 

Pro-small business bills failed to pass 

While we scored some important victories, several good bills failed to make it through the General Assembly. That includes COVID-19 liability protection for small businesses and other employers. The bill, which was defeated in the House Judiciary Committee by a party-line vote, would have shielded employers from pandemic-related lawsuits as long as they followed government guidelines. 

Other important bills that didn’t get very far in this year’s legislative session included workers’ compensation reform, small business savings accounts for capital projects, delayed implementation of the state minimum wage increase, and an independent commission to redraw Illinois’ legislative districts based on the 2020 census. New congressional maps will be drawn later this summer. 

Governor Pritzker’s plan to close tax “corporate loopholes” passed despite strong opposition from the business community, but it was scaled back over the final week of session from $900 million in tax cuts to just over $600 million. The governor also didn’t follow through on his promise to eliminate the state’s onerous corporate franchise tax. 

Proposed amendment would strengthen labor unions

A major issue that was approved with bipartisan support was SJRCA 11. This is a proposed state constitutional amendment that will appear on the 2022 general election ballot.

If passed, it would change the constitution to say that workers have a fundamental right to organize and to bargain collectively. It also would prohibit any law or ordinance that would bar agreements between employers and members of labor organizations.

It would be effective upon approval by 60% of those voting on the amendment or a majority of those voting in the election.

Final analysis 

Small businesses fared better than we expected given the hard push made by the more progressive wing of the General Assembly, but our work isn’t over.  

Lawmakers are expected to return to Springfield this summer for a special session to address unfinished business. The agenda may include an NFIB-supported plan to use federal pandemic recovery grants to replenish the state’s unemployment trust fund. Click here to read more about it.  

 If you have any questions about these or other state legislative issues, contact me at [email protected] or visit the Illinois General Assembly’s website.     

Related Content: Small Business News | Illinois

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