GENERAL ASSEMBLY

·        Jim Durkin re-elected as House Republican Leader.  The 57-year-old Durkin has led the House Republican Caucus since 2013. Leader Durkin was re-elected unanimously by his House Republican colleagues in a meeting held in Springfield on Tuesday, November 13. The choice will be finalized when the 101^st General Assembly officially convenes in January 2019.  

With a focus on protecting and strengthening families and communities, Jim Durkin has spent his entire career working for the citizens of Illinois. Following his graduation from law school, Jim served as an Assistant Illinois Attorney General. Jim continued his public service as an assistant Cook County state’s attorney. While working as an assistant state’s attorney, Jim served in the felony trial and narcotics bureaus. Jim currently practices law in the City of Chicago.

BUDGET

·        State revenue up in October.  The monthly report from the Commission on Government Forecasting and Accountability (CGFA) monitors State cash flow and economic trends.  The CGFA numbers depict continued healthy revenue numbers in October 2018.  Personal income tax receipts during the month were up by $145 million from October 2017, an increase of 9.9%.  Sales tax receipts increased by $71 million during the same time-span, a year-over-year increase of 10.7%.  The State’s sales tax numbers reflect receipts from an increasing proportion of retail sales made online to Illinois addresses.  Enforcement of Illinois sales taxes on online sales is now permissible under nationwide sales tax law.  The sales tax law change was approved by the Supreme Court earlier this year in its “South Dakota v. Wayfair” sales tax decision.  The positive numbers in Illinois’ two largest general revenue cash flow streams signaled a continued atmosphere of prosperity and low unemployment in many regions of the state. 

Not all cash flow numbers were positive in October 2018.  Negative numbers were posted in several areas where special excise taxes are levied.  Net proceeds from the Illinois State Lottery dropped by $12 million as gamblers moved to new platforms.  Riverboat casino tax revenues fell by $2 million in further affirmation of the same overall trend line.  Cigarette tax receipts dropped $5 million as Illinois reduced its consumption of tobacco products.  These trends away from so-called “sin tax” proceeds are expected to continue and the overall numbers reflect Illinois’ growing dependence on personal income taxes and taxes on retail sales.  CGFA released their October 2018 report on Friday, November 2.

EDUCATION

·        State Board of Education approves recommendations to expand and diversify highly qualified teacher workforce.  The Illinois State Board of Education (ISBE) has approved specific recommendations to expand and diversify the state’s highly qualified teacher workforce. The recommendations remove barriers and create new avenues of entry into the profession, while maintaining high standards. 

The recommendations stem from a year of study involving focus groups, data analysis, and a review of state and national research. The year of study culminated in the Teach Illinois report released on Sept. 7. ISBE received more than 150 public comments on the report over a three-week period and took each comment into consideration in developing the agency’s next steps and legislative recommendations. 

“Tremendous commitment has gone into the Teach Illinois project over the last year,” said State Superintendent of Education Tony Smith, Ph.D. “We now have a comprehensive set of actions that consider teacher recruitment, educator preparation, and licensure requirements. I look forward to putting infrastructure and energy behind what started as ideas. Now the next round of partnership and dialogue begins.” 

Pictured (left to right)  are Tyler Diers from the Illinois Chamber, Joe Henning, President and CEO of Auroraland Chamber of Commerce, and Rep. Wheeler receiving the Champion of Free Enterprise Award. 

The Illinois Chamber of Commerce has presented State Representative Keith Wheeler, R-Oswego, with their “Champion of Free Enterprise” award in recognition of his voting record during the 2017-2018 legislative session. The Illinois Chamber’s Legislative Ratings tracks votes important to the state’s business community and grades legislators based on their support of pro-business issues during the two-year legislative session.

JOBS

·        Illinois unemployment rate matches record low.  The 4.1% unemployment figure reported by the Illinois Department of Employment Security (IDES) matches the lowest number ever posted for this figure, a widely-cited index of economic health and activity in Illinois.  Preliminary data, which is subject to revision as more numbers come in, indicates that nonfarm payroll total employment increased in the Land of Lincoln by 2,800 jobs in September as opposed to August 2018.  The same figure, when counted on a year-to-year basis (September 2017 to September 2018) showed a net gain of more than 50,000 nonfarm payroll jobs. 

September 2018 job creation was especially strong in education, construction, and manufacturing.  The Illinois manufacturing economy created an estimated 2,300 net new jobs in September 2018 alone, and created 14,600 new factory jobs over the past 12 months.  It should be noted, however, that the Illinois manufacturing sector is not as dominant as it was in February 1999, the last time our State’s unemployment rate was 4.1%.  Illinois’ overall job universe has adjusted over the past two decades.  In line with overall worldwide trends towards automation, many Illinois jobs have moved from factories to offices and service-related employment opportunities.

Illinois’ September 2018 unemployment is slightly higher (0.4%) than the 3.7% national unemployment rate for the same month.  The nationwide trend is towards the 4.0% level that economists refer to as “full employment.”  

ECONOMIC GROWTH

·        Illinois Innovation Network expands to DeKalb County.  Northern Illinois University (NIU), already home to many centers of graduate education and research, has announced plans for a $23 million business-development incubator and innovation center.  NIU will construct the center to serve as a hub of the Illinois Innovation Network, the growing web of broadband-linked innovation centers being set up in locations throughout the state.  Much of the center’s construction cost will be funded by NIU, by gifts made to NIU, and by private investments made by venture capitalists. 

Looking towards new opportunities for economic growth, the General Assembly took steps to provide $500 million in Innovation Network startup seed money as part of the FY19 budget.  Creation of the Illinois Innovation Network, which is being governed as an affiliated partner of the University of Illinois, followed a series of studies by experts on the importance of face-to-face interactions as an essential element in the fostering of technological innovations and job creation.  California’s Silicon Valley is a classic example.  The Innovation Network plans to utilize modern fiber optics to enable a wide variety of contact opportunities, including high-speed video conferencing and terabyte data-transfer, between Innovation Network hubs.  The Innovation Network will encourage its affiliated professionals to concentrate on issues of food systems, water resources, and environmental change.  The Innovation Network has already announced decisions to place hubs in Chicago and in Springfield.   The NIU/DeKalb hub announcement was made on Tuesday, October 9.

BUDGET

·        CGFA releases State revenue numbers for September 2018.  The Commission on Budget Forecasting and Accountability (CGFA) is the nonpartisan budget-forecasting arm of the Illinois General Assembly.  Working with the Department of Revenue and other State revenue collectors, this office monitors the State’s cash flow and determines its balance with the State’s spending patterns and budgeted expenditures.   CGFA’s report on state revenues in September 2018 was published on Tuesday, October 2.     

In September 2018, Illinois continued to enjoy healthy revenue numbers, driven by almost 6.1 million non-farm payroll jobs maintained by Illinois employers in FY18.  Weekly employee paycheck earnings, on which state income taxes are paid, rose by 2.3% over the course of FY18.   September 2018 State personal income tax payments totaled more than $1.8 billion, up $218 million from September 2017.  This jump in September personal income tax receipts made up well more than half of the overall $240 million increase in general funds tax receipts and transfers-in during September 2018 as opposed to September 2017.

Corporate and sales tax receipts also increased significantly.  Other key revenue sources, led by cigarette taxes, liquor taxes, Lottery revenues, and riverboat receipts taxes, were flat-to-down, and there was a sharp drop in overall Federal aid for the month as compared to the year-earlier period.  September 2017 had seen a temporary spike in federal Medicaid reimbursements to Illinois, a cash-flow number that could not be replicated in September 2018.