Week in Review: Sept. 22-26

Springfield- The last day for those seeking licenses to grow and sell medical cannabis to submit their application materials and fees was early this week, said State Senator Jason Barickman (R-Bloomington), while in other news Illinois continues to rank at the bottom of the nation when it comes to the state’s business practices.

Also, information from the state’s Dept. of Central Management Services (CMS) reveals state retirees will eventually see almost $60 million in refunded health insurance premiums.

Medical Marijuana Update

Monday, September 22, was the deadline for companies to apply for licenses to grow and sell medical cannabis under the state’s new medical marijuana pilot program. A spokeswoman for the program said that most applicants waited until Monday to apply.

Applicants for dispensaries were required to submit a non-refundable, $5,000 per-applicant fee, while those seeking to run a cultivation center anted up a non-refundable fee of $25,000; both were required to provide significant amounts of associated documentation. However the pricey fees didn’t discourage applications—state officials reported there were 158 applications for cultivation centers and 211 for dispensaries. As a result, the state has already collected $5 million in fees from the program.

The Dept. of Agriculture is responsible for reviewing applications for cultivation centers and the Dept. of Financial and Professional Regulation (IDFPR) is responsible for reviewing the applications for the dispensaries. Eventually the state is expected to authorize 22 cultivation centers across the state (one for each state police district and two in Cook County) and 60 dispensaries, which will be geographically dispersed around Illinois.

It’s unlikely that applicants will learn who has been licensed to sell medical marijuana until December, at the earliest. The program is not expected to be fully functional with operating cultivation centers and dispensaries until early 2015.

Illinois’ medical marijuana law is considered to be the nation’s most restrictive and heavily regulated.

State retirees to receive a $59 million refund

Following a recent court ruling, long-time state retirees will eventually see a more than $59 million refund that had been collected for health insurance premiums following a 2012 law.

Prior to the 2012 law, retired state and university employees, judges and General Assembly members, with at least 20 years of state service, received health care insurance from the state at no cost. However, state budget woes prompted the passage of legislation to rescind this free health coverage. The law allowed the state Dept. of Central Management Services (CMS) to deduct premiums from state retiree pension checks to pay part of their retiree insurance costs.

In response, retired state employees and their representatives took the issue to court, arguing that the change was a violation of their constitutionally-protected pension benefits. In July 2014, the Illinois Supreme Court sided with the plaintiffs, ruling the law was unconstitutional and confirming the health care benefits must be protected.

The pension systems have been deducting premiums from annuitants’ checks since July 13, 2013, though in light of the court ruling deductions will cease on October 1, 2014.

CMS confirmed that almost $33.4 million is owed to members of the State Employees Retirement System (SERS); premiums collected from SERS retirees has been held in an escrow account while the court case was pending, which will allow the state to eventually reimburse the money once court proceedings are concluded. Another $25.8 million is to be returned to four additional state retirement systems for the judiciary, legislators, some downstate teachers and university employees; CMS has confirmed that the state will make these refunds available when the final court judgment is delivered.

The reimbursement amount per retiree varies dramatically, and is dependent on the size of their pension.

Study shows Illinois is second-worst state for businesses

The nonpartisan American Economic Development Institute has released its yearly list of best and worst states in which to do business, ranking Illinois as the 49th worst out of 50 states. 

The study examines 32 factors related to the states’ efforts to be “pro-business,” considering issues such as tax rates, workers’ compensation, and burden of litigation matters. Illinois scored dismally in many of these areas, receiving a failing “grade” in matters such as the unemployment rate, workers’ compensation, corporate tax index, property taxes and the state’s regulatory and litigation environment.

One notable area for improvement in the state of Illinois is the “marketing/website response to new and existing employers” in which the state received an “F.”  Also concerning in a state known for its diverse transportation infrastructure, Illinois received a “D” in this area.

Illinois did score a “B” on matters such as average teacher compensation, cost of energy and college-completion rates. The state also excelled in the area of funding per college student, earning an “A” in that area. 

Though sparsely populated states such as Utah, Wyoming, and Nebraska register as the top three pro-business states, neighboring Indiana and Missouri were ranked in the top ten by the study as the seventh and eighth, respectively, most pro-business states. Indiana has been proactively encouraging Illinois employers to “jump ship,” having launched an advertising campaign specifically to lure businesses out of the Land of Lincoln and into the Hoosier State.

http://aedi.us/data/documents/Monograph-AEDI-Pollina-Corporate-Full-Report-of-Top-10-Pro-Business-States-for-2014.pdf

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