Minimum wage increase will cost taxpayers in all levels of government

Minimum wage increase will cost taxpayers in all levels of government

ILLINOIS (IRN) — While Gov. J.B. Pritzker plans a budget address hoping to tout a minimum wage hike for workers, his administration couldn’t immediately say when the increased taxpayer costs would be calculated.

During a House hearing on the issue, representatives asked staff from the governor’s office if he’ll include the tens of millions of estimated additional costs to taxpayers from an increase in the minimum wage. They couldn’t immediately say.

The Chicago Tribune reports the additional taxpayer cost for state government employee minimum wage hikes in the last half of Fiscal 2020, if the proposed increase from $8.25 to $9.25 kicks in next January, would be more than $80 million. The following year’s taxpayer cost would be nearly $270 million. That does not include the additional cost to taxpayers of minimum wage hikes for local government employees, or the cost to consumers of private sector pay hikes.

Freshman state Rep. Blaine Wilhour, R-Effingham, said there’s too many unknowns.

“How are we going to pay for those increases when we have a budget that’s billions of dollars out of balance currently,” Wilhour said. “To me, that’s just more of the same of what’s been going on. We’re making promises that we can’t pay for and we’re not willing to put the data out there to show that we can.”

Wilhour said he’s hearing from employers, both public and private, that are not happy about the proposed increase in the minimum wage.

The Senate Executive Committee Wednesday passed a measure that would increase the state’s minimum wage incrementally from $8.25 to $15 an hour by 2025.

The House Labor Committee also heard from park districts, social service providers and business owners saying increasing the minimum wage is likely to increase the cost of their operations. There was a mix of opposition and support.

While businesses could increase costs on consumers, Illinois School Management Alliance’s Zach Messersmith said it’s a different story for government units like school boards.

“School districts are mainly funded by property taxes so if there is an increased cost, that might be something that school districts have to look at or maybe some adjustments to program offerings,” Messersmith said.

Illinois Retail Merchants Association Rob Karr said the voice of small businesses outside of Chicago are not being heard in the minimum wage debate, despite the word “compromise” being used around the capitol.

“We seem to be back to the definition of the last four years of compromise, which is ‘I’ll tell you what compromise is,’ rather that what what Webster’s says the definition of compromise is, which is mutual agreement,” Karr said.

Businesses facing increased costs will have to balance increasing prices with the reality that people can shop online or shop out of state, Karr added.

The full Senate could vote on a measure as early as today.

With Democratic supermajorities in both chambers, the measure is expected to pass before Pritzker delivers his budget address Feb. 20.