Consumer Wins (and Losses) in Springfield: Our Policy Progress in 2019
This year’s change in the Governor’s Office in Illinois profoundly changed the legislative atmosphere in Springfield. Broadly speaking, collaboration replaced conflict as standard operating procedure “under the Dome.” Among Governor Pritzker’s top priorities, two were actively supported by Woodstock: increasing the minimum wage to $15 per hour and amending the Illinois Constitution to allow a progressive income tax structure to replace the constitutionally mandated flat tax.
The increase in the minimum wage was signed into law by Governor Pritzker on February 19, 2019. Under the law, the minimum wage will increase on January 1, 2020, from $8.25 to $9.25, and will increase each of the following years until it reaches $15 per hour in 2025.
The so-called “Fair Tax” amendment to the Illinois Constitution passed both houses and will now appear on the ballot in the 2020 general election on November 3, 2020. If approved by at least 60 percent of the voters, the Fair Tax amendment will become constitutional law in Illinois. Woodstock, as a member of the Responsible Budget Coalition, helped in the effort to win legislative support for the amendment and will continue to work with the coalition to advocate for passage of the amendment. A Fair Tax would cut taxes for 97 percent of filers and increase taxes for only the wealthiest filers. The increase in income and lower taxes will make it possible for more lower-income people in Illinois to cover immediate expenses and save for the future. It would benefit lower-income residents by both reducing their tax liability and raising $3 billion in revenue that the State could use to fund education and social services on which lower-income residents rely.
A huge win for Woodstock and for our allies was the passage of HB 2237 (Gabel-McGuire), which, if approved by the Governor, will establish a Children’s Savings Account (CSA) program that will automatically deposit $50 into a college savings account for each child born or adopted in Illinois after January 1, 2021.
Woodstock Institute has long supported CSAs. Our president, Dory Rand, served as a co-chair of the Illinois Children’s Savings Account Task Force created by the Illinois General Assembly in 2009, and she administered the first CSA program in Illinois from 2004 to 2007. Since then, a growing body of research has documented the positive impacts for kids and families of these programs. For example, research shows that low- and moderate-income children with college savings under $500 are three times more likely to attend college and four times more likely to graduate college. In past years, the legislative effort has been led by our friends at the Illinois Asset Building Group (IABG). This year, Treasurer Michael Frerichs spearheaded the effort with significant support from Woodstock, IABG, Community Organizing and Family Issues (COFI), Ounce of Prevention Fund, and Voices for Illinois Children.
Another consumer victory was the passage of the Consumer Fairness Act (HB 88; Guzzardi/Martinez), which will decrease the post-judgment interest rate from nine percent to five percent for consumer debt. It will also reduce the time that a debt collector has to collect on a judgment on consumer debt from 26 years to 17 years. Leading the charge on this bill were CARPLS, Heartland Alliance, Sargent Shriver National Center on Poverty Law, Chicago Legal Clinic, Chicago Volunteer Legal Services, and Center for Disability and Elder Law.
Another Woodstock priority, the License to Work Act (SB 1786; Aquino/Ammons), made significant progress this year, but is struggling to make it past the finish line. (I’m a marathoner, so I love racing analogies, and this bill certainly feels like a marathon!) The bill would end the practice of suspending driver’s licenses for failure to pay tickets for nonmoving violations such as parking tickets. Approximately 50,000 Illinois drivers have their licenses suspended each year for failure to pay tickets for nonmoving violations. According to a survey of New Jersey drivers conducted by researchers at Rutgers University, 42 percent of suspended drivers lose their jobs. Based on that research, we estimate that an average of 57 people per day in Illinois lose their jobs because of this ill-conceived policy. Our work on this issue is done as part of a coalition called the Transit Table, which is led by the Chicago Jobs Council and includes Heartland Alliance, the ACLU of Illinois, COFI, the Chicago Urban League, and Revolution Workshop.
In previous years, the Chicago Mayor’s Office blocked the bill from passing based on revenue concerns. We were optimistic that this would change under the new mayor. However, in the words of reporter Melissa Sanchez from ProPublica Illinois, who has reported extensively on this issue, Mayor Lightfoot “opposes the bill as is.” The bill passed the Senate on March 28, 2019, and now sits on the House floor awaiting a vote. Our hope is that the Mayor’s Office will work with us over the summer to make it possible for the bill to be passed during the Veto Session in November 2019.
Woodstock led the effort to keep certain bills from passing that we believe would have been bad for consumers. House Bill 3156 (DeLuca) concerned “Guaranteed Asset Protection (GAP),” an add-on insurance product sold in conjunction with an auto loan that could be characterized as “junk” because it rarely provides any value to the consumer. The bill would have exempted GAP from the Illinois Insurance Code, and thus, exempted sellers of GAP from licensure. House Bill 3393 (Buckner) would have formally legalized the practice of “live check loans” – a type of loan in which a finance company sends to the consumer a check which, if cashed or deposited, becomes a high-cost loan. House Bill 2825 (Zalewski) would have established a regulatory sandbox, which is a regulation-free zone in which companies, without the usual licenses and oversight, could experiment on consumers with “innovative” loans and other financial products. The work to stop the sandbox bill was co-led by IABG.
Not to end on a sour note, but one of our top priorities failed to pass this session. The Fair Lending Act (HB 2468; Welch), which would cap the interest rate on vehicle title loans at 36 percent, passed the House Executive Committee unanimously, but was never called for a vote on the House floor. The coalition led by IABG will re-group and develop a plan to keep pushing for this much-needed consumer protection. The average annual percentage rate on a title loan in Illinois is 188 percent!
All in all, the session was highly productive and resulted in major wins for consumers, thanks to strong and organized consumer groups and a broadly pro-consumer General Assembly.