Illinois Venture Capital Association Illinois Legislative Report
David Stricklin / Stricklin & Associates
Wednesday, May 31, 2023
PARTNERSHIP AGREEMENT GETS THE GREEN LIGHT
IVCA sponsored legislation to better define an investment partnership was included in an omnibus revenue package which passed the Illinois General Assembly at the end of session and will soon be on the desk of Governor JB Pritzker.
For several years IVCA has worked with the Illinois Department of Revenue and the Illinois General Assembly to repair the existing language which resulted in the department defining PE funds as a “trade or business.” Our initial agreement with IDOR easily cleared the Illinois Senate but was held up in the House. At the beginning of 2023 IDOR pivoted to a different approach which was vetted extensively by IVCA members and their tax and legal experts. Without the contribution of expertise by these members and their advisors we would not have been able to reach a satisfactory result.
The legislation is SB 1963, house amendment 2, pgs. 313-316:
If you have any questions about the legislation and its application, about the process which culminated in this result, or any other aspect of this campaign, please let us know. Thanks again to IVCA leadership who rallied time and time again to help us achieve a reasonable result.
And thanks to our legislative champions, Leader Bill Cunningham in the Senate, and Revenue Committee Chair Kelly Burke and Vice-Chair Curtis Tarver in the House.
Legislators worked an extra week and overnight Friday into the early hours of last Saturday to produce a budget which passed on party line votes in both chambers and will soon be signed by the governor.
Democratic leaders and the governor point to added millions into pension payments, paying off existing debt, and a general theme of fiscal responsibility, while still pouring additional dollars into K-12 and higher education, hospital rate increases, and other human services:
House Republicans protested about being shut out of the process, while House Democrats argued they were never going to vote for the budget regardless of what was included.
Republicans cited several concerns with the budget, such as its continued funding of Medicaid-like health care for undocumented immigrants aged 42 and over, which has grown well past original projections. GOP members also objected Democrats’ refusal to address the Jan. 1, 2024 sunset of a $75 million tax credit program that funds scholarships for private and religious schools.
Republicans also disapproved of the budget package’s allowance for the automatic inflation-determined growth of lawmakers’ base salary for next year from $85,000 to nearly $90,000 – a cost of living adjustment that McCombie argued violates the Illinois Constitution. They also criticized the budget’s failure to address needed funding for pay raises for state workers whose union contracts are up for renewal in the upcoming fiscal year.
The budget plan Croke supported includes millions more for early childhood education, childcare and higher education grants that allow more people to pursue a degree. As part of the state’s evidence- based funding model, schools will see a $350 million funding increase. First responders will receive $100 million, while another $138 million is headed toward the state’s rainy-day fund to prepare for future challenges. On top of the state’s statutory requirements, another $200 million will further assist pension funds and create greater long-term stability.
On the Senate side, Republicans and Democrats did share ideas but not sufficiently to garner any Republican votes for the package.
Instead of providing better services to the developmentally disabled community, the FY24 budget prioritizes a program that provides free healthcare to undocumented immigrants, costing taxpayers hundreds of millions of dollars. The spending plan also includes more than $300 million in Democrat-only projects and a $400 million slush fund for the Governor but fails to provide the necessary incentives to retain the state’s employers and bring new businesses and jobs to Illinois.