Lawmakers head back to the Capitol on Tuesday for the final week of the Fall Veto Session.
Two issues we will be following are the minimum wage bill and the State exchange bill.

I would like to hear your thoughts on the possible increase of the minimum on your
organization. The Care Campaign will be discussing this and our efforts to increase wages
for direct care staff on December 16th. I know the Chicago City Council is also considering
an increase in the minimum wage this week as well.

Story from Chicago Tribune on the minimum wage below.


Social agencies’ minimum wage bind

Providers want to raise staff pay — but fear cutbacks in service if state fails to send cash
to cover increase

BY MONIQUE GARCIA Tribune reporter

SPRINGFIELD — As Democratic lawmakers renew their push to raise the state’s
minimum wage, there’s a key sector of employers that finds itself stuck in the middle —
nonprofit groups that care for some of the state’s most vulnerable, including the elderly
and disabled.

That’s because while they’d like to pay their workers more, many of those agencies
receive the bulk of their funding from the state. Given Illinois’ dire financial situation

— which will only grow worse if portions of a temporary income tax increase expire as
scheduled Jan. 1 — it means they could be on the hook for higher salaries without
getting more money from the state to cover the additional costs.

As a result, groups that have operated on bare-bones budgets for years as government
funding and private donations dried up may be forced to make even deeper cuts and
further scale back services.

“Our opposition to the bill in its current form is not that we oppose direct-support
workers … from earning a living wage,” said Josh Evans, vice president of government
relations for the Illinois Association of Rehabilitation Facilities, which represents
organizations that provide care for the developmentally disabled, mentally ill and those
with substance abuse problems. “It comes down to a simple fact of will the state of Illinois
pay for that?”

Social services groups argue that their concerns have been largely overlooked in the
fight over raising the minimum wage, which has so far focused on Democrats’ desire to
increase the hourly rate against the wishes of business interests who say it will hurt job
growth and make Illinois less competitive than surrounding states with lower wages.

Service providers say they don’t have the same flexibility as businesses to pass on a
wage increase to customers by charging more, noting that they are limited in what they
can spend by the state.

“We are in a bind. What we really want to do morally and ethically is pay the living wage,
but our hands are tied,” said Judith Gethner, executive director of Illinois Partners for
Human Service. “If you increase the minimum wage by law, and you don’t on the other
side increase the money or raise how much we can spend that you give us on overhead,
then you hurt our sector significantly.”

Under the latest proposal, the state’s $8.25-an-hour wage would jump to $10 next year
and to $11 by mid-2017. Teens and new employees in training would earn 50 cents an
hour less, while workers who receive tips would be paid 60 percent of the minimum wage.

The measure has received initial approval from a key Senate panel, though sponsoring
Sen. Kimberly Lightford, D-Maywood, indicated that changes are possible.

It’s yet unclear just what those will be, though Evans is pushing for an amendment that
would require the state to recalculate payments to service providers each year and
provide additional funding to cover any increases in the minimum wage.

Service providers are also backing a push by some business groups to take away
Chicago’s home rule authority to set its own minimum wage, the idea being to prevent the
city from setting an hourly rate above that of the rest of the state.

A proposed ordinance would raise the city’s minimum wage to $15 an hour, which both
nonprofit groups and business owners say they couldn’t afford.

Lawmakers would need a three-fifths vote margin in each chamber to pre-empt home
rule. Lightford says she has enough votes to do that in the Senate.

The fate of a minimum wage hike is less certain in the House, where Democrats have
a large but narrower margin and lawmakers tend to be more conservative. Legislators
are scheduled to return to the Capitol for action in early December.

“We are ready to go in the Senate,” said Lightford, who said she planned to confer
with House Speaker Michael Madigan.

The issue presents an opportunity for departing Democratic Gov. Pat Quinn to score
one more victory or face a final defeat as he pushes lawmakers to raise the wage before
Republican Gov.-elect Bruce Rauner is sworn in Jan. 12.

Rauner has asked lawmakers to put off major votes until then, saying he supports an
increase in the minimum wage, but only if accompanied by business-friendly measures
such as changes to the state’s workers’ compensation system and changes in civil
lawsuit damage awards — two issues unlikely to pass the Democrat-controlled legislature.

Meanwhile, service providers may be left seeking protection from a minimum wage
increase when budget negotiations heat up next spring — a difficult negotiating position
as Rauner faces a $4 billion budget hole when the income tax rate drops from 5 percent
to 3.75 percent Jan. 1.

Rauner has acknowledged the “possibility” that he would have to ask lawmakers to
temporarily raise the rate above 3.75 percent as part of a larger overhaul of the state’s
tax code.

But it’ll be a tough sell among Democrats who are reluctant to make Rauner’s job any
easier, while Republican lawmakers will also be asked to help share the blame — a
unaccustomed position for the GOP’s legislative minority.

Without an increase in revenue, service providers, schools and state agencies are
likely to face large spending cuts, which would only make it more difficult for nonprofits
to absorb a minimum wage increase.

“We don’t want this to be looked at as an unfunded mandate on these folks,” said Sen.
Dan Kotowski, D-Park Ridge, a budget negotiator. “The last thing we want to see is
requiring them to increase how much they have to pay people and the number of staff
diminishes and services are reduced.”

Evans argued that cuts could send people who would normally seek community-based
care to hospitals and state institutions, costing more money in the long run.

“My position is we can’t afford not to invest,” he said.
Twitter @moniquegarcia

Tony Paulauski
Executive Director
The Arc of Illinois
20901 S. LaGrange Rd. Suite 209
Frankfort, IL 60423
815-464-1832 (OFFICE)
815-464-1832 (CELL)