IVCA Provides Updates for State and Federal Legislative Issues - 08.16.17

IVCA Provides Updates for State and Federal Legislative Issues

UPDATE provided by Stricklin & Associates on August 16, 2017:

Illinois Has a Budget
The Illinois General Assembly approved a budget for Fiscal Year 2018 (which started July 1 2017) with a series of votes over the 4th of July weekend, first approving the budget and an income tax increase then overriding Governor Rauner’s veto of those bills.  A majority of Democrats along with a dozen or so Republican legislators formed the coalition to pass the budget package and then override the veto.
 
SB1719 “Privilege Tax” of 20% on VC/PE earned Capital Gains dead for now
NOT included in the revenue package was the “privilege tax” targeting VC & PE capital gains with a 20% tax.  SB 1719 passed the Illinois Senate May 23 on a 32-24 vote (a vote taken in part to help the Senate Democratic leadership pass the budget bills).  SB 1719 was then approved by the House Committee on Revenue and Finance, but was not called for a vote on the House floor and was not incorporated into the broader budget package.  IVCA members’ commitment to reaching out to House members was extremely valuable in preventing this from happening.
 
SB 1719 has been sent back to the starting line of the legislative process.  We will continue to oppose this bill and its concepts as being unwise policy which would significantly impact the entrepreneurial ecosystem in Chicago and Illinois which is driving an otherwise stagnant Illinois economy.
 
SB1 School Funding still in flux
Unresolved is school funding for this school year and beyond.  The General Assembly included in the 2018 budget a provision requiring school funding to be allocated only through an “evidence based model” as embodied in SB 1.  The governor issued an amendatory veto to SB 1 which the Illinois Senate overrode Sunday August 13, with all Democratic votes plus one downstate Republican in support.  The Illinois House is scheduled to meet Wednesday, August 16 and may consider the override motion or put the governor’s amendatory veto on the floor for a vote.  The House lacks the supermajority of Democratic members which the Senate has to override without some assistance from Republican members, who have so far indicated little interest in overriding the governor’s education veto.  Negotiations to address the points of contention are ongoing.  Meanwhile, school doors are opening across the state and school districts have not yet received their state aid payments.
 
SB 2012 Angel Tax Credit extension awaits Governor’s signature
The Angel Investment tax credit passed unanimously during the Spring Session and was sent on May 28 to Governor Rauner.  Unless the Governor vetoes, which is not expected, it will become law on August 28th.  Illinois governors have 60 days from receipt of a bill to sign the bill into law, veto the bill and send it back to the legislature, or take no action and allow it to become law without a signature.  This is an extremely busy period of time for the governor with a significant number of bills which have been sent to his office which need review and analysis.  We hope to have a specific update on SB 2012 in our next report.