Illinois Venture Capital Association Illinois Legislative Report
David Stricklin / Stricklin & Associates
Wednesday, March 30, 2022
IVCA BILLS IN THE MIX AS ADJOURNMENT IS IN SIGHT
Legislation championed by the IVCA to improve the diverse investing goals and reporting the results in the Technology Development Account / Illinois Growth and Innovation Fund is on the doorstep of being sent to the governor for signature. IVCA has worked the last 14 months or so to develop a set of requirements for how much any treasurer may invest in emerging funds and at what levels. The changes are designed to foster robust activity with nascent fund managers while establishing guardrails which protect the overall strength of the program. SB 3777 passed the Illinois Senate unanimously, passed the House committee unanimously, and is now waiting to be heard on the House floor. Could happen today.
Meanwhile, the Illinois House Revenue Committee continues its tradition of passing very few tax measures, including SB 2430 which IVCA introduced to resolve an issue with the Illinois Department of Revenue regarding the correct definition of an investment partnership as opposed to a trade or business. The legislature has a few long days of work ahead before the April 8 adjournment and we will continue to evaluate options for making progress on this issue.
TWO PEOPLE LOOK — SEE SOMETHING TOTALLY DIFFERENT
Legislative Democrats and Governor JB Pritzker last week passed and signed into law a bill to use federal COVID relief dollars put $2.7 billion into the Unemployment Relief Fund, make an additional $300 million payment to the pension systems, become current with payments for state health insurance claims, and stabilize the College Illinois program.
Republicans took a decidedly different view, arguing the money should have been used entirely to pay off the UI debt and that business taxes would rise, and benefits would fall as a result.
With the April adjournment date coming closer and closer it seems clear Democrats will work to meet that deadline and get out of Springfield until after the November elections. There will be no bipartisan approach to anything of consequence and it will be left to the voters to sort it out in the June 28 primary and November general election.
MENDOZA DELETES “BACKLOG” FROM VOCABULARY
In the fall of 2017 Illinois had $16.7 billion in bills on a 200 + day payment cycle waiting to be paid to vendors and service providers. Financial firms were created to buy the debt and patiently wait to for the state to pay the bill AND then collect the 12% interest which accompanied it. Not-for-profits and others providing services shared stories of not making payroll, etc.
It can be viewed as a relatively routine accomplishment – paying bills in a short, dependable cycle – however in Illinois it qualifies as “news” when the comptroller declares there is no “backlog” it’s simply accounts payable. The office also says the other-state-funds which were pressed into service to bridge the gap between receipts and invoices have all been made whole.
THREE YEAR LOOK AHEAD
The Illinois Commission on Government Forecasting and Accountability issued a three-year forecast for the state’s finances COGFA. The report spells out the threats (pension payments among them) and opportunities which exist for Illinois policy makers.
Again, voters are going to be asked a lot of questions this fall — crime and safety, social issues, etc. One of those themes will also be the economy, how is your standard of living, is the state on the right fiscal path? Governor Pritzker is clearly putting some stock in the equation that voters will see as appealing that his administration paying down debt, putting extra money into pensions, and earning credit upgrades from the ratings agencies.
GOVERNOR BATTLES WITH LEGISLATURE ON PRB
Governors and presidents run for office on a whole host of planks in their platform, often never mentioning or being asked about a somewhat obscure agency which turns into a hot potato and has the potential to define their administration in the eyes of voters. For Governor JB Pritzker this may be the Illinois Parole Review Board, which is at the center of a mostly Springfield controversy for now but which Republican candidates for governor and other offices are going to make sure the rest of Illinois hears about it.