1. Chicago Paint & Coatings Association
February 20, 2018

3. Paint Specific Issues
PaintCare® - trying to advance in Illinois. Having issues with some retailers.
Fees for Lead Abatement, HHW Collection, Window Replacement
Spray Paint Ban in Chicago – ordinance proposed in – work continues
Chicago Area Waterways
New Ozone Standard – 70 ppb
IPC Legislative Reception & Day – May 8 & 9

4. #1 Priority
“No. 1 issue facing Illinois is our inability to adequately compete with other states for jobs and economic development. That drives everything else, economically and fiscally.”
Tim Nuding, Governor Rauner’s Former Budget Chief

5. Facts & Figures
Since the Great Recession began at the end of the fourth quarter of 2007, Illinois ranks dead last in personal income growth - a mere 0.8 percent.
Illinois is third highest, after Alaska and Hawaii, for debt and unfunded retirement costs as a share of state personal income percent.
Total retirement debts across all Illinois governments grows to $267 billion in 2016.
In 2015, Illinois lost close to $5 billion net in personal income from out-migration.
Illinois will lose at least one Congressional District in next remap.
Illinois is now the 6th largest state being recently surpassed by Pennsylvania

11. Credit Rating Lowest Credit Rating of all 50 states
Increased Borrowing Costs
Per capita debt – twice the national average
Even after income tax increase, credit rating agencies have Illinois one notch above junk status

12. Property Taxes
6,963 units of local government – most in the nation – all levy taxes in a vacuum.
2nd highest property taxes in nation in (NJ); 7th in 2005
67.4 percent pays for local schools; 62 percent a decade ago
Adjusting for inflation, government expenditures per capita increased nearly 24 percent in 20 years

13. Income Tax Hike - July 1, 2017
$5 billion Income Tax increase approved in July 2017 over Gov. Rauner Veto.
New personal income tax rate of percent (previously 3.75 percent).
New corporate rate of 7 percent (9.5 percent with the state’s replacement tax) (previously 5.25 percent).
Decouples from the federal domestic production deduction, eliminates the non- combination rule, and the “outer continental shelf” exemption.

14. Unpaid Bill Backlog – Jan.1, 2018
$16.7 billion backlog in unpaid bills in July 2017
State must pay 12% interest penalty on each unpaid bill
FY 2018 budget included $3 billion in borrowing, which produced $8 billion in funds to begin paying off backlog of overdue bills.
Bill backlog as of Jan. 31, 2018 is $8.5 billion

15. Largest Budget Costs @ $1.6 billion Structural Imbalance
Pensions – $7.01 billion
Medicaid - $10.5 billion
K-12 Education - $12.53 B; High Ed - $3.4 B
Total - Pensions, Med. & Educ. billion
Total GRF Budget Expenditures billion
Total GRF Revenue billion

16. Largest State Tax Exemptions
$1.98 billion Food, Drug, Medical (S)
$1.76 billion Retirement & Social Sec. (I)
$869 million Standard Deduction (I)
$568 million Property Tax Credit (I)
$557 million Tax-Exempt Organizations (S)
$284 million Exemption from Trade-Ins (S)
$256 million Farm Chemical Exemption (S)
$234 million Earned Income Tax Credit (I)

17. Largest Business Tax Exemptions
$256 million Farm Chemical Exemption (S)
$169 million Non Motor Vehicle Use (MF)
$136 million Retailers’ Discount (S)
$134 million M & E Exemption (S)
$110 million Gasohol Discount (S)
$83 million Biodiesel Discount & Exemption (S)
- $9.323 Billion Total Impact of All Tax Expenditures
- 87% of all Exemptions are contained on these two pages
- 60% of all Exemptions went to individuals

18. Other Tax Incentives Targeted
Return to 3 factor income tax apportionment for non-service companies                      $70 million
Decouple from federal accelerated depreciation (one-time revenue increase)              $100 million
Require income tax withholding on gaming winnings over $1000 from non-residents    $4 million
Repeal deduction for foreign and domestic dividends received by corporations             $90 million
End deduction for company owned life insurance                                                           $9 million
Tax canned software                                                                                                        $65 million
Extend the insurance tax to industrial insurance                                                              $15 million
Repeal exemption for fuel transported to out of state destinations (Stealth Gas Tax)    $45-90 million
Limit retailers sales tax discount                                                                                   $136 million

19. Solutions Restructure and cut cost of government
Make Illinois more attractive for business and investment – Job Growth (Workers’ Compensation Reform, Property Tax Reform, Tort Reform, Tax Policy)
Increase taxes & fees even more
Tax retirement income
Eliminate exemptions
Expand sales tax base to cover services

20. Elections - 2018 Pritzker, Biss and Kennedy Rauner and Ives
Redistricting –

21. Illinois Paint Council Legislative Reception & Breakfast – May 8 & 9
May 8 – Legislative Reception at Sangamo Club in Springfield, IL May 9 – Breakfast and Illinois Paint Council meeting at President Abraham Lincoln Hotel