TMA Members Impact Public Policy

From TMA’s May 2017 News Bulletin – 

“All politics is local,” the late Tip O’Neill is credited with saying as third-longest serving US House Speaker. While state and national politics get the most attention from news sources, most people underrate how powerful local politics can be.

For instance, no one could have imagined the political firestorm Cook County Commissioner Sean Morrison lit when he visited with the Technology & Manufacturing Association’s network of human resource directors in mid-March. Morrison, a business owner himself, shared with HR reps over breakfast the details of two new countywide mandates that would affect every Cook County business: 1. Raising the minimum wage over the next five years to $13 per hour in 2020, and 2. Requiring employers grant each employee 40 hours of mandatory paid time off each year.

Morrison argued against the new ordinances based on an Illinois Supreme Court decision that prohibits local municipalities from setting wage policy between private sector businesses and their employees. Such authority lies with the state alone, Morrison said.

“The state Supreme Court has opined and the State Constitution is very clear on how it grants municipal and or government powers,” Morrison said. “As home rule authorities, we have only two duties: ministerial and public safety.”

The ordinances that will go into effect July 1 do not fall within those categories, Morrison said.

“We don’t have the authority to make an ordinance that mandates what a private business is going to pay somebody and what benefits they’re going to offer,” he said.

Despite Morrison’s arguments, the two mandates passed the Cook County Board along party lines – 13 Democrats for and four Republicans against.

“We do all sorts of things to attract businesses, but these ordinances will drive businesses out,” Morrison said. “Already, we are losing revenue as manufacturers leave the far western parts of Cook County to other counties – this will only make the situation worse.”

Notices of the 40 hours of paid time off after 120 days of employment are to be included in employee paychecks two weeks before July 1st and notices will need to be posted before it goes into effect. It will be the responsibility of employers to find the wording Cook County requires.

Two groups exempted to the new ordinances are government employees and those involved in collective bargaining agreements, if they have an agreement with their unions. Cook County businesses either have to obey the new laws or escape them if the villages in which they are located opt out, and choose to acknowledge authority for such rules to the state.

TMA President Steve Rauschenberger agrees that the role of passing work mandates like PTO (paid time off) and minimum wage is the state’s, not county’s. Hundreds of TMA member companies could be affected by the new county ordinances.

“TMA businesses observe all state and federal laws affecting employers and their employees,” Rauschenberger said. “Our members accept and are willing to administer the laws placed upon them, but it is wrong for local governments to interfere with state and federal laws that affect employers and employees.”

“TMA members compete with manufacturers across the world, and they are placed at yet another disadvantage when local governments require them to provide additional benefits based on local politics,” said the former state senator.

“What they’ll get at those local levels is less employment, and a loss of jobs, not an increase in wages or benefits,” Rauschenberger said. “The vast majority will lose because of less economic activity in their areas.”

Rauschenberger called on TMA member businesses to contact their local village and town officials and encourage them to opt out of the county’s impending regulation before the June 30, 2017 deadline.

One by one, TMA members began reaching out to local officials. Within a few weeks of Commissioner Morrison’s visit at TMA, the Arlington Heights village board scheduled the issue to be revisited at their May 1st meeting. Hearing from Line Group President and CEO Al Panico and TMA President Rauschenberger, they voted to exempt Arlington Heights from the county mandates.

Later, Rauschenberger and X-L Engineering CEO Paul Prikos appeared at north suburban Niles’ public hearing on the mandates, and came away encouraged that the village council would also choose to reject the Cook County Board’s ordinances.

The movement to opt-out before June 30th appears to be growing as the deadline nears.

“I would anticipate many more municipalities will likely opt out of Cook County’s Minimum Wage and Paid Sick Leave ordinances,” Commissioner Morrison told News Bulletin. “That is because allowing these two ordinances to become significant regulatory economic policies for their towns will put them at a tremendous economic disadvantage to surrounding municipalities, neighboring counties and even Indiana border businesses.”

Morrison said that most of the mayors and managers he has spoken with were none too pleased with the overreach by Cook County government and the council’s increasing willingness to pass ordinances which go well beyond Cook County’s scope of authority granted by the Illinois constitution.

“They felt that such ordinances like this only serve to cause additional harm and further contribute to the negative economic climate being felt by municipalities in Cook County through over-taxation and over-regulation,” Morrison said.

At least 19 other Cook County localities have rejected the mandates: Barrington, Rosemont, Oak Forest, Mount Prospect, Tinley Park, River Forest, Schaumburg, Palos Park, Elmwood Park, Streamwood, Wheeling, Elk Grove Village, Palatine, Bartlett, Hanover Park, Hoffman Estates, Western Springs, Rolling Meadows and Bedford Park.

News stories show that 21 more village boards are considering opting out: Berkeley, Buffalo Grove, Berwyn, Bellwood, Des Plaines, Elgin, Northbrook, Oak Lawn, Park Ridge, Palos Hills, Prospect Heights, Niles, Worth, Harwood Heights, River Grove, Morton Grove, Norridge, Cicero, North Riverside, Orland Park and Evergreen Park.

Only five Cook County municipalities thus far have officially accepted the board’s mandates: Countryside, Evanston, Franklin Park, Oak Park and LaGrange.

Every business within Chicago proper will be required to implement the ordinances. Similar policies proposed at State Capitol While the state’s 101 other counties are not affected by the Cook County mandates, Chicago-based lawmakers at the Capitol are busily promoting their enactment statewide.

While the state has functioned without a budget for two years, Chicago lawmakers are trying to levy in two employer mandates similar to those that will go in effect in July for Chicago and Cook County businesses.

TMA lobbyist Jay Shattuck is keeping TMA’s Government Relations Committee up to date with the ever-changing Capitol environment, but as the session’s May 31st deadline approaches, the political climate intensifies at the Capitol. Shattuck explains why TMA is opposed to the paid sick leave mandate: “One size does not fit all. These bills disproportionately hurt small manufacturers that survive on the slimmest of margins and often have highly fluctuating revenue as well as staffing needs,” Shattuck says. “They have far less means to handle the increased costs that will certainly come with this mandate.”

“Unless a manufacturer offers a paid time off equivalent at the option of the employee or has a collective bargaining agreement explicitly waiving the mandate, they will have to change their benefit structure to accommodate the legislation,” Shattuck says.

Another bill being considered in the waning days of the session would raise the state’s minimum wage to $15 per hour – higher than any of the states surrounding Illinois.

“Now’s the time to contact state lawmakers as they cast votes on tax hikes, minimum wage, mandated paid time off and workers’ comp changes,” Rauschenberger said. “As a former state senator, believe me, what the people that elected me said always mattered to me.”

National business policy heads in opposite direction Tax reform and health care insurance policy are at the top of the “to-do” list in Washington D.C., and the US House and Senate have been busy the first three months of the Trump Administration reversing policies that the previous administration set into motion during its last days.

House Speaker Paul Ryan of Wisconsin explained in an op-ed that 14 times Congress used a law enacted in the 1990s called the Congressional Review Act. The law gives Congress 60 days to repeal regulations from the previous administration with a simple voting majority.

“In just four months, Congress overturned 14 harmful Obama-era regulations — those rushed through in the 11th hour of his presidency,” Ryan wrote. “These dictates were poorly crafted, complicated and created massive uncertainty. They made it difficult for businesses to grow and threatened tens of thousands of jobs. They unilaterally grabbed power from the states and gave it to bureaucrats in Washington. They were bad for our economy and our culture.”

“Repealing some of the most harmful, last-minute Obama era regulations was the first step in undoing Obama’s big government policies and fulfilling our pledges to the American people,” Ryan said.

Now that the Congressional Review Act time limit has expired, the president and Congress are focusing on major changes in the federal tax code and the health care insurance system. One of the hot topics in tax reform is the border adjustment tax (BAT) that is discussed in detail in this month’s TMA News Bulletin. There are varying opinions on the proposal, even among TMA members.

TMA’s GRC Committee Chairman Zach Mottl testified in a congressional hearing on his support for the BAT, while other TMA members say the concept would be detrimental for their businesses.

The good news is that there is overall optimism that tax change can occur within the next year – and input from manufacturers will weigh heavily among decision makers.

Sure, Tip O’Neill was right. “All politics is local.”

Take that first step and let your representatives to the village, county board, state legislature and Congress know how their votes could affect your business.