Here's what JB Pritzker's election means for Illinois' taxes, minimum wage, health care and more - Chicago Tribune

For the second election in a row, Illinois voters have handed over the governor's office to an ultra-but politically inexperienced businessman who promises to jump-start the state's economy.

But Democratic Gov.-elect J.B. Pritzker, a billionaire heir to the Hyatt Hotel fortune and a former venture capitalist, offers a vastly different approach to boosting investment and job growth than his predecessor, Republican Gov. Bruce Rauner, a multimillionaire former private equity investor.

Rauner, whose agenda is in strong opposition from the Democratic-controlled legislature, focused on issues such as freezing property taxes and curtailing the power of labor, whereas Pritzker aims to boost the state's minimum wage and create a graduated income tax, among other proposals.

Here's where Pritzker stands on issues related to business, jobs and the economy.

Income taxes

Higher-income taxpayers could pay a steeper income tax under Pritzker, who is pushing a taxed income tax through a constitutional amendment.

Illinois is one of only eight individual income tax rates, which legislators raise to 4.95 percent in July 2017, overriding a Rauner veto.

Pritzker favors a graduated tax, with successively higher rates at higher income brackets, like the federal income tax. However, the Illinois Constitution mandates a flat income tax. Changing to a graduated structure would require voters to approve an amendment.

A March report by the nonprofit Civic Federation recommended a graduated income tax rate with a maximum spread of 3 percentage points between the highest tax rates. Pritzker has not proposed specific rates, saying they need negotiation with lawmakers.

The earliest opportunity for voters to say election, halfway through Pritzker's term. There is a de facto graduated rate for increasing and declining income for lower- and middle-income residents. On Wednesday, during a television interview, Pritzker seemed to back off the idea of ​​a short-term fix.

Critics of the graduated tax say that it could prompt wealthier residents and businesses to leave the state.

Minimum wage

Workers earning the minimum wage could be in for a raise under Pritzker, who supports raising the state's minimum wage to $ 15 an hour.

Illinois lawmakers passed a bill last year that would have raised the wage from $ 8.25 an hour to $ 15 by 2022. Rauner vetoed the bill, arguing it would have reduced jobs and hurt workers more than it helped. Advocates said the wage hike would have increased the pay of 2.3 million Illinois residents.

Among economists, the jury is out of exactly what the impact of a minimum wage hike would be. About 38 percent of economists surveyed at the University of Chicago's Booth School of Business in 2015 said they were uncertain about raising the minimum wage to $ 15 per hour.

Chicago Booth professor Steven Kaplan argues that a wage has the potential to find entry-level work, outweighing the benefits.

There is also a minimum wage higher than the average in other states that it would be harder to attract or keep employers with lots of low-wage workers that do not have a compelling reason to locate in Illinois, he said.

Illinois' minimum wage already exceeds the federal rate of $ 7.25 an hour. Chicago's minimum wage, currently $ 12 an hour, is set to rise to $ 13 on July 1.

Health care

Pritzker has said he wants to give every Illinois resident the chance to buy into the state's Medicaid program. The state and federally funded program now serves lower-income people, those with disabilities and many elderly people.

His plan, however, still has many unanswered questions and hurdles to clear before becoming reality.

Currently, many low- and moderate-income Illinois residents qualify for federal tax credits when they buy insurance on the state's Obamacare exchange. Pritzker wants to make those credits available when they pay for part of the Medicaid. Those who are not eligible for the tax credits could still pay to participate.

"It's the right thing to try and do not want some pushbacks," said Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation.

For example, such a plan might not work well for doctors. The amount of money Medicaid reimburses doctors is less than what they get from private insurers, so if Medicaid, doctors could see their overall reimbursements go down, Hempstead said. Hospitals also could struggle financially.

On the other hand, if it were results in more people, that could help hospitals and doctors who did not get paid, Hempstead said.

Many questions remain, including what kind of premiums and deductibles consumers might pay, if the option would be open to residents, and if federal approval would be required.

Organized labor

Pritzker's win is a major victory in the labor insurance, which is felt under attack by the Rauner administration.

"I think unions feel protected" with Pritzker entering office, said Tom Balanoff, President of Service Employees International Union Local 1. "I think they are a governor who respects workers' right to unionize and improve their fate."

Pritzker, who got union endorsements early in the Democratic Primary, is expected to clear the children of policies Rauner pushed – including the creation of local right-to-work zones that the state pay prevailing union wages to contractors on public construction projects.

Bob Reiter, president of the Chicago Federation of Labor, committed Rauner's focus on weakening union power undermined labor-management relations and interfered with the business climate.

With Pritkzer, Reiter hopes labor, business and government can work together on mutualities, including greater investment in worker training programs and a capital infrastructure plan.

"I am optimistic. He has been very engaged with us, "Reiter said.

Labor attorneys are anticipating the Pritzker administration will pass worker-friendly legislation that failed under Rauner. Brian Alcala, a Chicago-based lawyer who represents management in employment cases, expects to support a job that is not a perpetuate gender pay disparities. Rauner vetoed two such proposals.

Development

In places where they invest hundreds of millions, or even billions, or dollars, big commercial real estate investors dislike uncertainty.

That's what they face in Chicago, where Pritzker's election comes as a successor to Mayor Rahm Emanuel, who is not seeking re-election in the spring.

Years into a development boom in and around the city, investors also await specifics of Pritzker's policies.

Many are worried about potential new taxes that could push down on properties.

But there's some optimism that statewide dysfunction that has clouded the future – such as fit budget impasses – can be avoided under single-party state leadership, said Tim Anderson, CEO of Chicago development and construction firm Focus.

"I hope that unified leadership will allow us to tackle our fiscal issues," Anderson said. "It's really in the Democrats' camp."

Pritzker has detailed information about how to use tax incentives to recruit and retain large corporations. Pritzker's administration will use incentives, though selectively, spokeswoman Jordan Abudayyeh said in an email.

"For nearly two decades, J.B. "It is one of the nation's leading technology hubs," Abudayyeh said. "As governor, J.B. will be the state's chief marketing officer, working to bring new business to the state, but any incentives to attract new jobs to our state must be a good investment that yields a positive return for Illinois taxpayers. "

Incentive packages should hold companies to their job creation commitments, she said.

Discovery Partners Institute

The future of the Rauner-backed Discovery Partners Institute, a proposed Chicago innovation center on the undeveloped 62-acre South Loop site, may be in doubt under Pritzker, who has expressed concern over the lack of private funding.

The state approved a $ 500 million appropriation for the public-private project, a partnership with the University of Illinois. Related Midwest, which owns the long-vacant former rail yard, has agreed to donate land for the center as part of a planned mixed-use development.

The institute has an interest in a Chicago office but is not expected to break for a year. It has yet to announce any private funding.

Pritzker, who helped found Chicago technology incubator 1871, said in an emailed statement that he believes in public-private partnerships, but he questions the dearth or private funding.

"I think Discovery Partners Institute has real promise," Pritzker said. "What I criticized was the fact that the governor had promised that he was going to get private resources to match the public resources that he would ask for, but he never did that."

Bill Sanders, who was named interim director in August, said the institute is finalizing the land agreement, designing a building of up to 1 million square feet and seeking private funding.

"We believe that this is very much in line with Gov.-elect Pritzker's priorities, including his founding of 1871," Sanders said. "We're operating under the expectation and intention that this project will move forward."

Chicago Tribune's Robert Channick, Alexia Elejalde-Ruiz, Ryan Ori, Lisa Schencker and Lauren Zumbach contributed.

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