Week in Review: COVID-19, ethics, taxes & more


All of Illinois now under enhanced mitigation; statewide positive case counts number more than 10,000 per day. The cases are only a small fraction of the tens of thousands of tests run on Illinois residents every day across the state, with the great majority of tests coming back negative. However, the positive case counts as a percentage of total tests run is now greater than 8% in all 11 public health regions of Illinois. Under a policy imposed by Gov. Pritzker and the Illinois Department of Public Health (IDPH), all 11 regions are currently under enhanced mitigation restrictions.
Region 1, which centers on Rockford and includes much of Northern Illinois outside of metropolitan Chicago, is under super-enhanced Tier 2 resurgence mitigation. Within Region 1, all indoor service at restaurants and bars is legally suspended; and, in addition, meetings and social events are limited to no more than 10 guests, and the restrictions apply to professional, religious, cultural, and social group gatherings.

As of Friday, November 6, more than 460,000 cases of COVID-19 have been reported in Illinois, signifying the infection of almost 4% of the population of the state. Well more than 90% of those infected have recovered or are recovering, but the deaths of more than 10,000 Illinois residents have been attributed to the Coronavirus pandemic.

State report shows inadequate help being given to struggling small businesses. The COVID-19 pandemic has had a severe impact on jobs and businesses across Illinois. After the devastating blow felt by Illinois shops and businesses during the spring 2020 “stay-at-home” period, when much of Illinois’ economic activities were locked down, the General Assembly met for a brief emergency special session in May. Many members from both political parties protested against the near-lockdowns, and the Pritzker administration responded with the “Restore Illinois” plan. The plan acknowledged the hit to small business created by the pandemic orders, and promised to help individual enterprises and employers get back on their feet.

The General Assembly responded to the pledge by creating the “Restore Illinois Collaborative Commission,” a panel that is meant to call expert voices, hear testimony, submit questions, and have oversight powers over the Restore Illinois plan. Under the Restore Illinois law, the Department of Commerce and Economic Opportunity (DCEO), reports at the end of every month to the Commission on their ability to achieve Restore Illinois goals and metrics.

The DCEO report for October 2020 was submitted on Monday, November 2. In line with instructions given to Restore Illinois by the General Assembly in May, many individuals within the Restore Illinois program have worked hard to try to limit damage created by the current economic downturn sparked by COVID-19. Many small businesses have had to ‘interrupt’ (partly shut down) or modify their operations, with harsh outcomes affecting the employees of tens of thousands of Illinois small businesses. The Business Interruption Grant (BIG) program was intended to assist struggling small businesses and enable persons laid off by these interruptions to be re-hired.

However, the October 2020 report admitted that as of October only 4,000 BIG grants had gone out. Although $85 million has been distributed through the BIG grant process, the small business community has reported to the Commission that this is not nearly enough to keep struggling small business afloat. When the pandemic hit and “stay-at-home” orders were enforced in March and April 2020, Illinois jobless rates more than tripled from 3.5% into double digits. Many of these jobs have not yet come back. As of September 2020, the most recent monthly number reported by the Illinois Department of Employment Security (IDES), the unemployment rate in Illinois was 9.8%.

Sales tax revenues show rebound in October; major hurdles remain for FY21 budget. Much of the severe sales tax slowdown, seen earlier in 2020, was connected to the “stay at home” coronavirus orders promulgated by Gov. Pritzker and his administration starting in March 2020. These orders have since been modified, some of the laid-off workers have been called back, and the sales of taxable goods and services have rebounded in Illinois.

This means that the State’s sales tax revenues are up a bit: $787 million in October 2020 (FY21), an improvement of $44 million from October 2019 (FY20). This helped to counter other negative changes to State revenues, such as the drop in riverboat casino tax revenues from $21 million in October 2019 to zero in the recently-ended month. The October 2020 revenue numbers were reported by the Commission on Government Forecasting and Accountability (CGFA) on Thursday, November 5.

Unfortunately, challenges remain and are worsening. While the spring 2020 stay-at-home orders, called at the time a “lockdown,” have not been renewed, new mitigation orders have virtually shut down the legal operation of indoor sales of sit-down food and drink at restaurants and taverns. Unlike the food sold in grocery stores, the food sold in restaurants is fully subject to sales tax. The current mitigation restrictions may impose a harsh blow to Illinois’ revenue picture in November 2020.

Democrats postpone Madigan Special Investigating Committee hearing. At the request of House Republican Leader Jim Durkin, the House has convened a “Special Investigating Committee II” to hear evidence regarding an admitted bribery and corruption scheme implicating House Speaker Michael J. Madigan. The Committee chair, Rep. Chris Welch, had previously postponed meetings of the Committee until after the 2020 general election day. The Committee was scheduled to convene on Thursday, November 5.

However, on Wednesday, November 4, Chairman Welch canceled the scheduled November 5 meeting of the Committee. No new date was set for the Committee to meet, examine documents, and hear evidence.

On Friday, November 6, the Daily Herald Editorial Board took Chairman Welch and his Democrat colleagues to task for “Welch’s laughable management” of the Special Investigating Committee, going so far as to call the Democrats’ lack of action a “Sham investigation…”

Deputy Republican Leader Tom Demmer, the ranking Republican on the committee, condemned Welch’s continued stall tactics:

"A petition was filed 66 days ago in accordance with House Rules. The last meeting was 37 days ago, at which time we made a motion to issue subpoenas to key witnesses who have relevant and important information – but the Chairman did not allow a vote on that motion," Demmer said in a prepared statement. "Members of the House of Representatives – in both parties – should be concerned about the way this process is being handled."

Constitutional amendment defeated by voters. The proposed amendment would have erased language in the Illinois Constitution that requires the Illinois individual income tax, and also the Illinois corporate income tax, to be levied as a flat-rate tax. Repealing this constitutional language would have authorized the State to implement a graduated income tax system, increasing taxes on higher-income households. House Republicans unanimously opposed the proposed amendment when General Assembly Democrats voted to place it on the November 2020 ballot, and the constitutional amendment was defeated by Illinois voters on November 3.

Defeat of the amendment means that the General Assembly will not have the power to enact a law to impose graduated individual income taxes in Illinois. Nothing in this defeat prevents proponents of higher taxes from enacting a standard flat-rate tax increase through the conventional bill-enactment process. For example, in January 2011 a lame-duck Illinois General Assembly enacted a major income tax increase, raising the flat income tax rate on individual incomes from 3% to 5%.

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