July 11, 2017

7-10-17; Hello, Giant IL Tax Increase; Sayonara to WC and Other Reforms; Lilia Picazo on Chicago "Fair Workweek" That May Not Be So Fair to Business; Dan Boddicker on New Iowa EPLI Precedent and more

July 11, 2017/ Eugene Keefe

Synopsis: General Assembly Whacks You and I With Massive Tax Increase; Spending, Workers’ Comp and Other Pro-Business Reforms Dropped. Are We Ready for Even Higher State Taxes Next Year and For Years to Come?

Editor’s comment: Last week, the Illinois General Assembly, led by House Speaker Michael Madigan raised our IL state income tax to 4.95% to raise about $5B in new money from you and I and IL business. Various members of the cowardly IL Republican party crossed over and voted to override Governor Rauner's budget veto. A few legislators mumbled there is still work to be done to reform Illinois workers' compensation. Our suggestion is don’t hold your breath on any future WC or other “reforms.” We are also sad to see all the pressure and stress that came with trying to make some progress and real reforms for our clients and other businesses in this State all came to nothing. We do feel businesses and jobs are going to continue to leak out to our sister states until someone in the super-majority ruling party starts to feel the pain of those growing departures.

House Speaker Madigan was able to bring together the 71 members needed to override Gov. Bruce Rauner's veto. Ten House Republican representatives crossed party lines to work with the Democrats to pass the $36 billion budget. Legislators passed a bill out of the Democrat-controlled House that included a $5 billion income tax increase to pay part of more than $15 billion in unpaid bills. I believe they are also borrowing another $6B we don’t have to insure your great-great-grandkids have to deal with their mistakes.

Gov. Rauner originally vetoed the bill a week ago on Monday, saying the bill didn't reform IL government enough, including changes to workers' compensation and a freeze on property tax, among other things.

The Illinois Senate overrode Rauner's veto within an hour. But the House failed to pass a vote until Thursday evening. The body did not meet on the Fourth of July, and failed to reach a quorum on Wednesday. As the House was readying to go into session on Thursday, the session was delayed when a woman threw an unidentified white powder into the Governor's office, sending the Capital into lockdown for two hours.

Rauner called the override vote "another step in Illinois' never-ending tragic trail of tax hikes,” during a news conference. “(Madigan's budget) is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government," Rauner said during the live televised event. "It proves how desperately we need real property tax relief and term limits." I would point out to our plucky Governor, we now also need income tax relief because of the certainty that tax is going to continue to rise.

Gov. Rauner proposed tougher standards to prove causation in workers' compensation claims and measures that would force IL WC arbitrators to use only American Medical Association guidelines in determining how much seriously injured workers could be paid for PPD. That was later dropped in favor of reducing the medical fees doctors, hospitals and pharmacies can charge for treating injured workers.

Speaker Madigan said while those reduced medical fees saved money, the only group that wasn't seeing any reductions in profits was the Illinois WC insurance industry. We have no idea how he singled out just IL WC insurers for this supposed profit-gouging in one small area of insurance business. He called for IL WC insurance company profits to be regulated. He or his staff also cooked up the confusing idea of having the State of IL form its own tiny WC mutual insurance company to somehow compete with the industry giants using Madigan’s expert government precinct captains, oops, I mean payrollers. We assure our readers all of that silliness and legislative sleight of hand has been dropped. In short, then you saw this state WC insurance company dodge, now you won’t.

Speaker Madigan claims IL legislators would continue to negotiate workers' compensation reforms. I assure my readers it is my opinion such statements are bluffing and balderdash—the 2017 IL WC reforms are over. I do feel there may be a very slight chance medical reimbursement rates may again be cut and recommend our readers in the healthcare industry keep your lobbyists working to give you reasonable reimbursements.

Susan Mendoza, the IL State comptroller, said it was still unclear whether the shiny new budget would solve our State's fiscal crisis. She indicated businesses and local governments in this State still face one of the highest workers' compensation insurance rates/costs in the country, and we still have numerous underfunded pension systems which continue to threaten to downgrade the state's credit rating.

As I have advised my readers, the General Assembly Retirement System or GARS and the Judicial Retirement System or JRS cannot truly be “pre-funded” as they are currently set up. These retirement systems and possibly some of the other government pension systems are, in my opinion, fake, false and misleading to taxpayers and all IL citizens. In short, a “fake” gov’t pension is a fake promise. I did not see any effort to truly reform IL gov’t pensions in all the budget battles. It is my hope someone in the IL Supreme Court or other members of our judiciary start to question the ethics of their pension funding and their continued participation in such plans and take action to insure the public knows the true and staggering cost of what our government officials, including our judiciary, are and will be receiving.

On a related note, we can all be certain IL income taxes are going up and should go up again and again without any of the work comp or other pro-business reforms bravely sought be Gov. Rauner. At present, state spending is supposed to go down by about half of the 2017 tax increase. In my view, this insures this State is going to have to again start another fight over budgets and tax increases in about eleven months or by June 2018. In short, additional tax increases at the state and local level aren’t going to stop until the reasons for the increases are addressed.

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Synopsis: Chicago Fair Workweek Ordinance May Happen – More Proposed Notice Requirements for Your Chicago Work Sites. Research and writing by Lilia Picazo, J.D.

Editor’s Note: In the wake of the recent Chicago and Cook County Paid Sick Leave laws which took effect on July 1st, Chicago aldermen recently introduced the Chicago Fair Workweek Ordinance citing a need to create standards for more uniform and predictable work schedules for hourly employees in Chicago. The proposed ordinance echoes labor laws enacted in San Francisco, New York City and Seattle and would require employers to:

· Provide new and “expected” minimum work schedules at least 14 days in advance;

· Provide new employees prior to or on the first date of the employment an initial work schedule that runs through the date the next work schedule is posted for existing employees.

The proposed ordinance would also require Chicago employers to pay employees one hour of “predictability” pay if employees’ work hours are cancelled, reduced or changed (including if an employee is requested to extend their shift) with less than 14 days. If employees’ hours were reduced or cancelled with less than 24 hours’ notice, an employer would be required to pay employees up to four hours for the hours employees were expected to work, but did not.

The above notice requirements would not apply to any work schedule changes initiated by the employee.

The proposed “Fair Workweek” city ordinance would allow employees’ a right to refuse any previously unscheduled hours added by an employer with less than 14 days’ notice. A “right to rest” provision would also allow employees to decline work if scheduled within 11 hours from the end of the employees’ last shift. If an employee accept the latter shift, employers would be required to pay the employee time-and-a-half.

The ordinance would also require employers to offer existing employees additional work hours before hiring new or contract employees, including through the use of staffing agencies. Specifically, if the employer expects the duration of additional work hours to exceed two weeks, the employer would be required to give existing employees 72 hours to accept the additional work hours before hiring new employees. Only 24 hours would be required if the employer expects the additional to last two weeks or less.

Penalties for violating the proposed ordinance may result in fines of $500 to $1,000.

There are several fundamental issues we have with the proposed ordinance. For starters, the ordinance would apply to all Chicago businesses. Thus, the law mandates “pooling” the likes of the retail, service, hospitality and other industries together – none of which are the same.

Demands are different seasonally for each industry and with the rise of Amazon® and other online retail providers, brick and mortar shops are already taking a hit for slower traffic in shops. The proposed ordinance would add yet another cost to employers for any changes made to employees’ work schedules despite efforts made by the employer to reasonably schedule employees be it on-call or not for work shifts depending on foot traffic flow.

The proposed Chicago ordinance would further require restaurants and other businesses to abide by a 14-day notice of work schedule and foreseeable work hours, yet does not consider factors such as weather or sporting events which can greatly alter traffic flow. Again, the employer would take the hit and incur costs if additional employees are needed for a shift or if an employee is called off due to slower foot traffic with less than 14 days or 24 hours’ notice.

Additionally, work schedules are not necessarily generated by a computer and thought is placed into the creation of work schedules, including past sales trends and foot traffic. Without delving any further into how work schedules may be created, it is fair to say that employees are hired for different positions and are skilled in different areas of work despite working for the same employer. The right of an employee to request a shift trade, for instance, and without penalty despite less than 14 days or 24 hours’ notice to the employer could potentially affect a workday or workweek if the employees seeking a shift trade are not necessarily skilled in the same area.

It doesn’t make sense for an employer making a good faith and reasonable effort to schedule individuals for particular shifts throughout the day or week based on the individuals’ skillset to incur additional costs by means of “predictability pay” to any other employee if the entire workday or workweek is affected by a shift trade within 14 days or 24 hours from the date employee schedules were originally posted.

It also doesn’t make sense for an employer to take the hit when an employee unforeseeably quits, doesn’t show up for work or calls off sick. We understand things happen, but do not agree with the idea that an employer should be forced to incur costs to account for such changes and possibly face penalties if the employer violates the proposed ordinance. Those affected most by the ordinance will likely be the smaller businesses who will have to consider other cost-effective means such as understaffing or cutting back on the number of new hires to account for the potential penalties for violating the proposed ordinance or paying employees for changing shifts with less than 14 days or 24 hours’ notice.

This article was researched and written by Lilia Picazo, J.D. Lilia can be reached for questions or concerns at lpicazo@keefe-law.com.

Synopsis: Iowa Civil Rights Act requires interactive investigation process by employers in disability accommodation decisions. Leave the employee out at your own risk! Analysis by Daniel J. Boddicker, J.D.

Editor’s Comment: A recent Court of Appeals of Iowa decision holds Iowa employers are legally obligated to work with disabled employees in regard to investigation of possible work accommodations.

In the case of John Vetter v. State of Iowa, et al, Iowa Ct. App., No. 16-0208 (May 17, 2017), the Court affirmed a several hundred thousand dollar jury verdict for John Vetter, an employee who was terminated by the Department of Natural Resources for the State of Iowa (“DNR”).

Vetter filed a petition alleging the State violated the provisions of the Iowa Civil Rights Act (ICRA) by discriminating against him with respect to the terms and conditions of his employment based on his disability or a perceived disability, and by failing to reasonably accommodate his disability. The ICRA protects employees from being discharged or otherwise discriminated against in their employment based on their disability. Vetter was required to show he was a person with a disability, he was qualified to perform his job either with or without an accommodation from his disability, and he suffered an adverse employment decision because of his disability. Vetter alleged two different adverse actions to support his claims. He claimed the DNR terminated him because of his disability and alleged the DNR failed to accommodate his disability.

Vetter suffered a back injury in 2011 and was placed on a leave of absence. In January 2012, he returned to light–duty work. The DNR accommodated his disability. In September 2012 a functional capacity exam (FCE) set forth Vetter’s limitation on activities. One year later, the Iowa workers’ compensation administrator sent Vetter’s employer a list of the permanent restrictions recommended as a result of Vetter’s FCE restrictions and asked if it could accommodate them.

The DNR hired two consultants to determine whether it could accommodate the recommended restrictions. The Court stated the determination of whether an accommodation is possible requires an interactive process that engages the employee and employer to work in concert to achieve a reasonable accommodation. In spite of its knowledge of Vetter’s disability, the DNR, and its consultants, failed to include Vetter in the process of determining which accommodations would be necessary to allow him to perform his job duties.

Instead the DNR determined the cost of accommodating Vetter’s disability was unduly burdensome and terminated him. In the letter terminating his employment, the DNR disclosed it was discharging Vetter because the cost of accommodating his restrictions would be unduly burdensome. Those permanent restrictions were issued because of Vetter’s disability. The Court held the evidence supported the jury’s finding the DNR discriminated against Vetter when it terminated him based on his disability. The Court held there to be sufficient evidence to support Vetter’s claim of disability discrimination based on the failure to accommodate his disability. Employers must include the employee in an interactive process or risk serious liability.

This article was researched and written by our licensed Iowa defense team leader, Daniel J. Boddicker, J.D. You can reach Dan at any time for questions about workers’ compensation at dboddicker@keefe-law.com.

July 06, 2017

7-3-2017; IL Gov't to Struggle for Decades Due to Destructive Financial Engines; Chicago "Fair Workplace" Proposed Law Not Fair to Employers and more

July 06, 2017/ Eugene Keefe

Synopsis: IL Gov’t Will Continue to Financially Struggle for Decades to Come.

Editor’s comment: Watching the mess that has gone on and continues in Springfield, one has to wonder if there is any chance it is ever going to calm down and fly along traditional lines of state government. In my view, the worst-run state government in the United States appears to be treading water in a hurricane, not going forward and not falling dramatically back—remember, they remain at the precipice of total economic disaster. In my view, the IL state gov’t debt situation isn’t going to get significantly better without major changes in leadership and law. The problem with getting rid of the bad leaders is hundreds of thousands of current and retired state workers vote, vote and vote for them to insure they keep getting their “fake pensions.” I truly doubt we have people in place with the brains to get things done that strongly need to be done.

The BGA or Better Government Ass’n did a recent article that indicates our State has about 480,000 retirees currently being paid about $17.3B every year with regular higher-than-COLA increases or about $500M every year at taxpayer expense. Both I and the BGA in their own way, promise you most of those pensions are “fake” in the sense the State and other IL gov’t bodies have never set aside anything close to amount needed to insure IL taxpayers aren’t called on to make up the widening shortfall. Whenever I see a T-shirt promising “A pension is a promise,” I always thing “A fake pension is a fake promise.”

I look fondly to the north and Governor Scott Walker of Wisconsin. He has worked hard to cut his State’s annual spending by $5B a year. The savings is being passed along to taxpayers. I am sure he should be able to lower state taxes and not keep increasing them to record levels as our goofy legislators are doing and will keep doing for decades. Gov. Walker has done this by consolidating state agencies and streamlining their systems. We can only wonder if there is anyone in this nutty state who can come to power and do what Governor Walker has done. I assure my readers we try to be as bi-partisan as possible. I don’t care whether a Democrat or Republican leads us from the swamp of over-spending, over-borrowing and crushing debt, I just want someone from our State to do it.

Immutable Engines Guaranteeing Financial Destruction of This State Until Removed

Last week I wrote about the worst-funded IL fake government pension I am aware of called GARS or the IL General Assembly Retirement System. A participant in GARS only has to work four years to become fully vested and entitled to constitutionally protected benefits for life. As I advised, for an investment of about $32K in total, the former legislator may receive several million dollars if they live long enough. Their retirement money will quickly come from you and me when the participant’s contribution, state match and investment income is rapidly exhausted. This financially destructive fake pension program could be ended in only four years by enacting legislation barring it for everyone but current participants.

A similar financially destructive engine is JRS or IL Judicial Retirement System. Participants pay a little more than GARS but the payout is wildly higher. If you aren’t aware, in my view, the IL judiciary is the best paid judiciary in the United State and your local traffic court judge gets paid more money than Governor Rauner, the IL Secretary of State, our Treasurer, any statewide official. Right now, judicial pay starts at over $200K a year and they retired at 85% of their highest salary with guaranteed annual compounded increases at 3%. Here is the math:

· Judicial contribution to become fully vested equals their approximate annual pay or about $200K.

· Return on the investment of $200K is paid at 85% or about $175K in the first year.

· The second year of retirement, they have used up their entire 20-year pension contribution plus the state match and any investment income.

· Third year, the judicial retiree is back on the taxpayer’s dime.

· In their 23d year of retirement, the first year payout of $175K will have doubled to $350K a year.

· Their pension will continue to triple, quadruple, if they live long enough.

· I feel an IL judge could put in $200K and get $3-7 million back from you and me in fake pension payments.

If you want to be mad at me about reporting this, you are going to have to be mad because I don’t want to pay former judges who are no longer working, as judges. And I promise my math is accurate—if you want to be mad about me about the math, you are clearly blaming the wrong party. Like the GARS program above, this destructive financial engine could be ended right now but would have to continue to allow the current participants to get billions of our tax dollars over the coming years.

What Does This Have to Do With Workers’ Comp in IL State Government?

As I have told my readers for years, I have many sources that indicate there are hundreds of former IL State workers who are getting lifetime “odd-lot” total and permanent disability awards. The cost to taxpayers is well over $100M. Our WC rates for such claims are very high and there is also a COLA component paid for by you and me. This concept could all end very rapidly with an IL State law mandating our State retrain and rehire such workers at sedentary and light-duty state jobs when such jobs open up. There are hundreds of such jobs that are filled every day. While we are at it, why not mandate all police and firefighters getting line-of duty disability pensions also be put back to such work?

In short, we are almost certainly going to be raising taxes and adding new taxes to allow our leaders to “tread water” and pay some bills for now. If we don’t find and block/end these sorts of destructive financial engines, we are going to need to continue to raise taxes and add more taxes to then raise taxes again and add more taxes. The outflow of jobs and businesses to our sister states will continue and may accelerate.

I appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: Chicago's 'Fair Workplace' Proposed Ordinance Needs to be Attacked by Business before Becoming Law—Please Join in the Fight!

Editor’s comment: We just saw Cook County add a stupid “soda” tax because they need money and people will fire them if they hike the County sales tax. What they do with such increases is to pass the law but sort of hide it from us until its effective date that may be months later. When we were getting ready to pay it, a judge blocked it—for now. Our vote on the “Fair Workplace” idea is to fight it before it becomes law.

Under this goofy new law, City of Chicago employers would be required to give workers at least two weeks' notice of their work schedules and pay their staffs extra for last-minute changes. Championed by the local branch of the United Food & Commercial Workers union and three alderman—Ameya Pawar, 47th Ward, Scott Waguespack, 32nd, and Toni Foulkes, 16th—the so-called Chicago Fair Workweek Ordinance mirrors recently enacted laws in New York, San Francisco and Seattle. Proponents of the ordinance cite hourly workers' desire for “predictability” in their weekly schedules, chiefly among employees in the food and retail industries. One has to wonder how such workers survived the unpredictability for the last several centuries in this industry.

Facts about the proposed ordinance:

ü It would require Chicago employers to post schedules 14 days in advance and give employees an extra hour of pay, called "predictability" pay, if schedules are changed with less than a 14-day heads-up.

ü f employees' hours are canceled or reduced with less than 24 hours' notice, employees could get up to four hours of pay for time they were expecting to work but did not.

ü Additionally, a "right to rest" provision allows employees to decline to work scheduled hours occurring during the 11 hours following the end of a shift, and if they do accept such hours they must be paid time-and-a-half.

ü The ordinance also requires employers to offer existing workers additional hours before hiring new employees.

ü Penalties for violating the proposed ordinance, to be enforced by the Chicago Department of Business Affairs and Consumer Protection, could include fines of $500 to $1,000.

I hate when government tries to take over for private businesses, particularly in a State where our government bodies are so badly run. This proposed scheduling rule is just the latest in a series of local government mandates that add to the cost of doing business in Chicago. It follows close on increases to the Chicago minimum wage, which rose to $11 an hour this past Saturday, and new paid sick leave requirements.

If enacted, this ordinance would hamper employers’ ability to manage their business to account for seasonal fluctuations and unexpected changes in customer traffic. Employers would be on the hook to pay employees they don't need, or risk running their business short-staffed. When employees quit unexpectedly, business owners would be forced to incur extra costs in altering schedules to avoid being understaffed. The ordinance might also hurt those that it has set out to help, when employees find that they are far more limited in their ability to pick up extra shifts.

It's important to remember that many of the city's restaurant franchise owners, perhaps a group most likely to bear the brunt of any new "fair workweek"—are small businesses. The restaurant industry survives on razor-thin profit margins and is struggling with the increasing costs of doing business within Chicago. What rhymes with automate? If the ordinance is passed, employers in every affected industry will cut back on part-time hires, schedule fewer employees per shift, and offer less scheduling flexibility to employees. That's exactly what a market research firm finds happened in San Francisco, which implemented its ordinance in late 2014.

Our vote for our readers with operations in Chicago—contact your alderman or Chicago Mayor Emanuel and convey how happy you are with such shenanigans.

Synopsis: Who says you cannot deny TTD when an injured employee is terminated before MMI? A brave new world or return to sanity? Analysis and Reporting by Shawn R. Biery, J.D., MSCC.

Editor’s comment: In the recent future post Interstate Scaffolding, we have seen multitudes of cases in which TTD is being paid even after termination for cause based upon the holding which indicated generally that the Appellate Court would not consider the actual details of the cause. In most cases, this was difficult to avoid however we consistently advised clients that certain cases should be considered for litigation back to the Appellate Court to clarify the ruling in particularly egregious cases where payment of TTD really did appear to be unwarranted. Now, we get some case law to support our consistent recommendations to our clients and interested observers.

In Holocker v. IWCC (Komatsu America Corp.), No. 3-16-0363WC, 06/16/2017, the Illinois Appellate Court ruled that a worker who was fired before attaining maximum medical improvement for his industrial injuries was not entitled to temporary total disability benefits after he lost his job.

By way of background, Scott Holocker worked for the Komatsu America on crane duty when a chain broke loose from a crane he was operating September 2012, striking him in the face and chest. The blow knocked out four teeth and caused facial fractures.

Holocker missed one month of work, returning to light duty in October 2012 and full duty in December 2012. However, upon his return, Holocker requested he not be given any crane duties. He was obliged, and assigned to a position as a forklift driver in a building without cranes. Later in May 2013, Holocker was reassigned to a position in the building where his accident had occurred and he reported a panic attack in July 2013 when he attempted to operate the crane which had caused his injuries.

Holocker then asked to be reassigned to a new position, and his employer offered him a janitorial assignment which he refused. In October 2013, Komatsu fired Holocker after he missed three consecutive days of work without calling in sick. While he did undergo dental surgery the next month, his doctor excused him from work between Nov. 13 and Nov. 20 only based upon our reading of the facts.

Holocker proceeded on his WC thereafter and the arbitrator found Holocker was entitled to temporary total disability benefits from the date of his termination through the date of the arbitration but declined to any award of attorney fees or penalties. Both parties appealed, and the Illinois Workers’ Compensation Commission overturned the TTD award however the Circuit court later reinstated the arbitrator’s award.

The Illinois Appellate Court in their decision held the commission’s decision to deny TTD benefits after Holocker’s termination was not against the manifest weight of the evidence even though he had not yet reached maximum medical improvement at the time of his termination and in doing so, the court noted Holocker had been released to full-duty work and was back to work at his old job. It was also noted there was evidence Holocker remained employable, even with his work-related physical and psychological conditions. To quote the court, “Accordingly, there was ample evidence to support the commission finding that, at the time of his termination, the claimant's work-related injuries had stabilized to the extent that he was able to re-enter the workforce, and his injuries had no impact on his employment….”

While we are thrilled to see a common sense decision be made even though it is employer oriented, we also believe it could have been as easily noted that work was available and refused and find it to be an even stronger decision of the Appellate court which we hope is a signal that fair play is back with regard to legitimate issues surrounding disputes on return to work. In cases where an individual is committing theft, threatening co-workers or simply refusing to comply with offered accommodated work offers, we suggest there is new hope that you do not need to simply lay back and accept the non-compliance.

This article was researched and written by Shawn R. Biery. If you have questions about your return to work program or any cases with non-compliance regarding return to work or accommodations, please contact Shawn via email at sbiery@keefe-law.com or via phone at 312-756-3701.

June 27, 2017

6-25-17; Will Democracy be a "FAIL" in Illinois This Friday?; Shawn Biery on Important New Ruling on TTD/MMI; Important Ruling on AG's WC Decision-Making by John Karis and more

June 27, 2017/ Eugene Keefe

Synopsis: Will Democracy be a “FAIL” This Friday in Illinois State Government?

Editor’s comment: As I have told my readers and several national news sources/blogs, our IL State Government has until this Friday, June 30, 2017 at midnight to cook up an annual IL State budget for the coming fiscal year that starts at 12:01am on July 1 and runs until next June 30. If they can’t strike a deal, all sorts of greasy, nasty things will start in relation to our State Gov’t on this Saturday and the days, weeks and months thereafter.

Three Obvious and Immutable IL State Government “FAIL” issues:

1. If they don’t cobble up a budget, the State’s credit rating is going to move to what Wall Street calls “junk status.” This means the State is basically going to have to pay a giant vigorish or loan-shark-interest-rates to continue to borrow to pay their many pipers, as they have been doing for decades. It is also possible they won’t be able to borrow at all. If you are not sure, the State’s unpaid bills are over $15 billion, yes, billion dollars. Their pension debt is over $130B. When the City of Detroit went to “junk status,” they couldn’t borrow and ended up in Federal Bankruptcy Court and still haven’t emerged years later. The State of IL can’t end up in Bankruptcy Court but the impending inability to borrow is going to stress all relations with all vendors and at some point, they may not be able to make payroll.

2. Both IL U.S. Senators Durbin and Duckworth have written to confirm federal funds for IL road projects will end to the tune of more than $1B. IL State road jobs are going to shut down but not the site maintenance costs that will come with managing the shut-down work. Road-builders across the State will be laying off lots of workers who are going to then file for unemployment, at a cost to the State and the employers.

3. Our State is getting kicked out of all the interstate lotteries. This is again going to cost the State of Illinois millions of dollars they need to run our nutty State government.

More Democracy FAIL Issues—Lack of Any Accountability

If you don’t like to see things go to heck in a hand basket, please remember IL taxpayers can’t get rid of the leaders and members of the General Assembly who caused this crisis. These leaders have given away jobs and benefits and more benefits to anyone who worked or now works for them. As one example, Speaker Madigan comes from an Hispanic community near Midway Airport in Chicago. To my knowledge Speaker Madigan no habla espanol but he does give his loyal constituents/supporters and their families two, three and four jobs and an equal number of fake government pensions per family. I am not blaming these constituents who use the system to their benefit, I am pointing out we need to get back to some semblance of what other states call “democracy.” We have what I call a “benefit-ocracy” where State government provides state workers benefits and jobs our taxpayers can’t possibly afford.

On a similar note, do you remember the last time the State of Illinois laid anyone off or had to deal with a union strike? I don’t—the reason why is what I feel is the basis of a benefit-ocracy. When our legislative leaders are using high benefits and unnecessary jobs to cull votes out of present and former government workers, whatever they want is what they get. You don’t lay off your best voters. You also don’t allow your best voters to go on strike—you give them what you want at high cost to IL taxpayers.

On top of that, the “worst” or least funded fake government pension in Illinois is GARS or the General Assembly Retirement Scam, I mean system. This fake retirement system allows a member of the IL House or Senate to contribute as little as about $30,000 in four years of part-time work to then get literally millions of dollars from IL taxpayers the rest of their lives. Notable participants in GARS are former President Barack Obama and former Chicago Mayor Richard M. Daley who each served less than 10 years under Speaker Madigan and are both in line to basically win this version of the IL Lottery to collect millions of dollars from taxpayers over the coming years. It is hard to imagine anyone contradicting or disagreeing with Speaker Madigan when you have a fake and defunded gov’t pension with real gold coming at the end of your short term with the General Assembly.

IL State Democracy FAIL Number Three—Higher Taxes and More New Taxes May Be Coming with No End in Sight

We were mildly surprised to read a letter from Todd Maisch, the brilliant and hard-working President of the IL State Chamber who basically wrote his membership and anyone who will read it to let them know the State Chamber is okay with the IL income tax being raised to around 5%. With respect to President Maisch and the IL Chamber and I am a supporter of the Chamber, he didn’t say “but.” Ii is my view that is shared by lots of veteran State government observers, I don’t feel IL State Government can tax its way out of these issues. IL taxpayers need more than higher and higher taxes and lots of new taxes without something in return—long term change/reduction in State government. To my understanding, the highest income tax rate in the U.S. is California at 13.3%--do we want to keep letting our goofy legislative leaders continue to make gigantic increases in our taxes with no promise to seriously cut spending and make any financial sense of what they are doing?

Our State Government has been aware of numerous ways to save tax dollars. I am not in a position to truly analyze State government but would do so for free. I think our State wastes literally zillions of tax dollars every year. Here are some easy examples:

· We have 88 State agencies that we could consolidate to half that number or less. All these agencies have directors and assistant to the directors and HR managers and other redundant and unnecessary costs.

· The late Judy Baar Topinka confirmed the Office of the IL Treasurer and the Office of the IL Comptroller do exactly the same thing and are unquestionably redundant. To get rid of one or the other would save over $10M—what do we need to do to save that money?

· Last year, we automated one small section of the IL Tollways—our State Government spends over $100M on paying humans to collect road tolls. Why not automate all State tollways right now?

· Do we need a Lieutenant Governor? Should we give that person an actual job with an actual job description?

· IL State government has “remote offices’ that are do-nothing jobs that should have been closed decades ago.

My message to President Maisch and all his members and all my readers—if you are going to jack up our taxes or agree to others jacking up our taxes, someone please tell me we are going to start the process of making IL State government efficient, effective and for the lack of another term, cheaper. If you don’t do that, taxes are going to continue to rise and rise until the last person leaving IL should be asked to shut off the lights.

How Do These Democracy FAILS Impact Workers’ Comp?

If you are watching the news, there are a few new IL WC reform proposals that will save IL business a couple of bucks in the years to come. I have literally no idea which one may come through the bigger battles in Springfield. If you want the skinny, read next week’s KCB&A Update.

In the interim, remember in the last year or so, Hoist Liftruck moved more than 500 manufacturing jobs to Indiana last year. .Machine-maker DE-STA-CO moved 100 jobs to Tennessee. Bunge North America shut down its plant in Bradley, Illinois, and laid off 210 workers. General Mills pulled the plug on its manufacturing plant in West Chicago, terminating 500 workers. Mitsubishi Motors closed production facilities near Bloomington ending 918 jobs there. Mondelez (makers of Oreos and Chips Ahoy) laid off 600 manufacturing jobs at its Chicago facilities. Kraft Heinz laid off 700 jobs at Kraft’s Northfield facility. Motorola Mobility cut its workforce in Chicago by 25 percent, eliminating another 500 jobs. More recently, Caterpillar is laying off 800 workers in Aurora, IL and Kellogg is laying off 258 in Woodridge.

When employers and jobs leave because of rising and new taxes, they may never, ever come back. In my view, if we continue to run this hillbilly, dysfunctional State Government, we will lose more jobs and workers. In that setting, our mildly high WC costs aren’t going to be that big a deal.