SPRINGFIELD – A bill to raise Illinois’ minimum wage passed the state Senate on partisan lines Thursday after Gov. J.B. Pritzker made a personal appeal to Democratic lawmakers at a private caucus before the vote.
Senate Bill 1 received only Democratic votes as it passed by a 39-18 margin, putting the onus on the Illinois House to get the bill to Pritzker’s desk by his requested deadline of Feb. 20, when he is scheduled to give his budget address.
Although no Republicans voted for the bill – and several spoke against it on the floor, citing concerns about businesses leaving the state, unforeseen costs on schools and universities and the potential for job loss for low-wage employees – Pritzker said conservative voices helped shape the legislation.
“I talked personally with several senators to make sure their ideas were incorporated. I talked with many of the interest groups that represent businesses, and Republican interests, to incorporate those into the bill,” Pritzker said during a news conference in his office at which no elected Republicans were present.
Interest groups are expected to continue to lobby for changes when the bill is heard in the House – particularly for an amendment to include a regional rollout of the minimum wage for lower rates downstate. But Rep. Will Guzzardi, D-Chicago, who is SB 1’s House sponsor, said as far as he’s concerned, his chamber should approve the current version.
“I feel very confident that we will pass Senate Bill 1 as the Senate passed it,” Guzzardi said. “I don’t see the need for us to make any further changes to the legislation right here before us.”
Details of the bill
If approved as is, the minimum wage will be phased in over six years, starting with an increase from $8.25 to $9.25 on Jan. 1, 2020, before increasing to $10 on July 1, 2020, and $11 on Jan. 1, 2021. After that, it would increase by $1 every year until it hits $15 in 2025.
Kimberly Lightford, a Maywood Democrat and the bill’s Senate sponsor, said compromise is reflected in the six-year rollout and in a small-business tax credit that won’t affect Chicago businesses until the wage exceeds Chicago’s minimum, which is $12.
The tax credit is available to businesses with fewer than 50 “full-time equivalent” employees, which means businesses that pay less than 2,000 employee hours in a one-week period.
The credit would start at
25 percent of the difference between the current minimum wage and an employee’s wage in the final quarter of the previous calendar year. It would decrease by 4 percent each year until it hits 5 percent in the final two years.
Employers with 2,000 or fewer employee hours will be able to take advantage of the credit for seven years, while employers with 200 or fewer employee hours will be able to take advantage of the credit for eight years.
Senate Republicans said those assurances are not enough for businesses, and the wages would force property tax increases by increasing costs for K-12 schools, as well as lead to greater requests for state appropriations from colleges and universities.
Sen. Jason Barickman, R-Bloomington, said he was told by Illinois State University that the bill would cost $600,000 in the first year alone because the campus employs 5,000 to 6,000 student employees.
“That same story, I believe, is going to be told by countless community colleges and four-year institutions around our state,” Barickman said.
Sen. Chapin Rose, R-Mahomet, said that when fully implemented, the wage increase would represent a
17 percent cut to the general revenue fund for Eastern Illinois University and a 12 percent cost for the University of Illinois systemwide, with a
$57 million effect on the Champaign-Urbana campus alone.
But Pritzker said during his news conference that higher wages for people in college towns will increase economic activity, and Lightford said universities are in poor financial situations as a residual effect of a budget impasse presided over by Republican Gov. Bruce Rauner.
Sen. Dale Fowler, R-Harrisburg, said he surveyed about 15 companies from his district and invariably heard three words: layoffs, closures and cutbacks.
Local officials react
“Businesses and nonprofit social service organizations agree: An aggressive one-size-fits-all minimum wage for a state as economically diverse as ours will lead to fewer jobs for the poor and unskilled, and serve as another incentive to move business out of state,” said state Sen. Dan McConchie, R-Hawthorn Woods. “Rather than being a leg up, this proposal will result in increased automation, decreased service and countless layoffs.
“The business and nonprofit communities offered to negotiate a workable solution, but that has so far been rejected in favor of politics. If the majority doesn’t want to further bankrupt the state and accelerate the exodus, it should be reconsidered.”
McConchie and state Sen. Don DeWitte of the 33rd Senate District voted no on the measure, while Sen. Craig Wilcox of the 32nd Senate District was listed as not voting.
“The last time Illinois raised its minimum wage was in 2006, and by 2007, Illinois lost 50,000 jobs,” DeWitte said. “When you raise the minimum wage, the first jobs to go are the vital entry-level ones, and the businesses most impacted are our small businesses.
“According to the governor’s own numbers, a $15 minimum wage will increase annual state payroll by $1.1 billion, which doesn’t even include the costs that would be placed on state universities.”
Wilcox said he was not in attendance for the vote after breaking his arm and returning to McHenry on Monday night.
“Had I been there, I would most certainly have been with the Republican caucus on a no vote,” he said.
Two weeks ago, Wilcox said he was holding out optimism that bipartisan compromise was where the Legislature was headed, but he said Thursday’s vote indicated that the Democrats’ minds were made up.