Minimum wage shelved as Senate leader warns members of ‘pressure’

SPRINGFIELD — Illinois Senate leaders issued warnings to their members as they packed their bags on Thursday — telling them not to “succumb to pressure” and also to be prepared to vote on a “grand bargain” budget package come Feb. 7.

Also on Thursday, Illinois House Speaker Michael Madigan said he wants a legislative committee to take up one of Gov. Bruce Rauner’s preferred reforms — procurement reform. Madigan earlier this month said he’s pushing for his own “aggressive economic reforms,” which Rauner signaled as an “important positive step.”

Meanwhile in the Senate, where a “grand bargain” budget package is the only comprehensive plan out there, the message from leaders capped a week full of committees and private caucuses in which grievances were aired about several of the bills, which evolved from the work of working groups, and dedicated meetings between Illinois Senate President John Cullerton and Illinois Senate Republican Leader Christine Radogno.

The package — which includes pension reform, gaming and revenue — came together after talks between Rauner and Madigan fizzled in December.

The pressure from some labor groups was enough for the leaders to remove one of the 13 bills, a minimum wage bill that would have raised the Illinois minimum wage to $9 an hour beginning on July 1. It would increase by 50 cents until 2021, when it would reach $11. Some labor groups wanted the increase to reach $15, which halted the bill.

And there’s also concern over elements in the workers’ compensation bill.

Earlier this week, amid pressure from business groups, a penny-per-ounce tax on sugared beverages also was removed from a massive revenue bill. That bill also has evolved amid opposition.

The revenue bill includes a bump in the personal income tax, to 4.99 percent from 3.75 percent. The bill originally had the rate set at 4.95, but Senate leaders were careful not to limit it. That increase is expected to generate more than $4 billion annually.

The bill also includes an increase in the corporate income tax from 5.25 percent to 7 percent, estimated to generate $577 million annually. It also eliminates three corporate tax loopholes, which could generate $145 million a year, according to a Senate analysis.

New additions this week included a “business opportunity tax” ranging from an annual fee of $225 to $15,000 based on payroll. That is estimated to generate $750 million annually.

A new tax on services — including dry cleaning and laundry, storage of cars, boats and property, landscaping, repair and maintenance of personal property, such as cars, and amusement services — could bring in $413 million. That tax also includes an extension of an excise tax on cable and satellite services.

The changes show a clear tug of war among legislators, business groups, labor groups and other special interest groups in the budget package.

Leaders had set a soft deadline of Feb. 1 to pass the package, but it was clear through subject matter committee hearings this week that there were plenty of concerns over the deal — and the fact that all of the bills must be passed together.

“This has been a terrific process thus far. Unfortunately, I don’t think we’re at the point of being able to take a vote. That is by no means a statement that we are backing off this effort. Almost everyone who has been involved with this knows it’s incredibly complicated and the more you try to refine it the more issues pop up,” Radogno said Thursday on the Senate floor.

But Radogno, R-Lemont, said it’s clear senators want to reach a deal.

“It is hard and none of us are going to like this in the end, but we have to get the state on a path with a sustainable balanced budget and the reforms that are going to keep us there,” Radogno said.

Radogno’s self-described “pep talk” also included a warning: “We’re going to have to come here and take some hard votes. . . . There’s going to be a lot of pressure on us when we go home, on you guys from certain elements, on us [the Senate leaders] from certain elements. Don’t succumb to that. We need to do this together for the good of the state.”

Cullerton told senators the problems the state faces aren’t going to disappear. They’re only getting worse.

“When the Senate returns to session on Feb. 7, everybody should be ready and prepared to vote,” he said.

It’s still unclear how the package will play out in the Illinois House. Earlier this month, Madigan said House Democrats would propose their own “agenda” with “aggressive economic reforms” that don’t hurt the middle class. That includes a reinstatement of the EDGE tax credit for businesses to create jobs and increase the earned income tax credit. And it would also include an increase in the minimum wage and a tax on millionaires — which Madigan has touted for years — to fund schools.

In a statement on Thursday, Madigan said he sent a letter to Rep. Al Riley, chairman of the House Government Administration Committee, urging members to vet “Rauner’s proposed changes to the state procurement code, and consider the governor’s proposal to streamline the process and reduce costs.”

“Governor Rauner has proposed a series of changes to the state’s procurement process that could generate savings for the state, and I believe they are worth considering,” Madigan said in the statement. “I want to work with the governor to reduce the cost of state government while maintaining transparent and ethical conduct in contracting.”

The state began procurement reforms in 2009 after Gov. Rod Blagojevich was impeached. It created a system of checks to reduce conflicts of interest, including the use of chief procurement officers, state purchasing officers, procurement monitors and the Procurement Policy Board, according to House Democrats.

Despite those changes, many state agencies, universities and vendors have called the state’s reforms overly complicated. A Senate bill to change procurement — part of the budget package — would expand the ability for the state universities to purchase products without going through the procurement process. It would also let the state enter into purchasing agreements with other governmental units. And it would give vendors more flexibility when registering or submitting a bid.