As we celebrate the 250th birthday of our great country, I believe it is important to reflect on the wisdom of our Founding Fathers.
Benjamin Franklin said, “Democracy is the best form of government, as it allows for the power to be in the hands of the people”.
James Madison remarked, “Democracy requires constant vigilance to ensure that power does not become concentrated in the hands of a few”.
Thomas Jefferson warned that, “A well-informed electorate is essential for a functioning democracy”
While they ultimately settled on a constitutional republic over a pure democracy out of fear of instability and mob rule, their desire for a system of self-governance that maintains order while safeguarding individual rights relied on two important components: accurate information and active participation.
Every month I try to use this opportunity to provide useful information to our business community, and to encourage your participation in impacting the decisions made by our elected officials.
Happy Independence Day! Happy 250th birthday, America! Let’s get to work on year 251!
Local
I would like to take this opportunity to invite you to join our Business Works Committee. We typically meet on the second Tuesday of the month at 3:00 PM. Business Works is our key government affairs committee and is a great forum to learn more about issues with the potential to impact your business. For example, the July meeting will feature a presentation regarding the proposed downtown parking deck near the library. Please feel free to reach out to NACC Engagement Manager Linda Oglesbee or me if you would like to join the committee or attend a meeting.
Business Works will be hosting several of our state senators for an End of Session Recap on July 9th at 3:00 – 5:00 PM at NACC. I urge you to register for and attend this event to take advantage of the opportunity to hear directly from your senators about the recently concluded spring legislative session.
Also in July, we will begin our “Coffee and Conversation” series. The series will feature opportunities to engage in informal conversations with members of the Naperville City Council. Each session will feature 2 council members, with time dedicated to small group discussions with each council member. Many thanks to NICOR Gas for sponsoring these events.
State
Our partners at the Illinois Chamber of Commerce have released their end of session report.
Over the next few months, legislators will be back in their districts preparing for elections in November. I plan to use this opportunity to do a “deeper dive” into specific legislation each month.
Also during this time, NACC is hosting several local state senators for an end of session event. We are also planning a similar event later this summer with local state representatives.
I will begin this month’s deep dive with some overall numbers and the state budget.
In the current general assembly (two years), there have been 10,008 bills introduced – 4,212 in the Senate and 5,796 in the House. Of which, 443 passed out of the Senate, 451 passed out of the House. A total of 395 bills passed both chambers and have been sent to the Governor for signature.
As per usual, the session was a mixed bag for Illinois businesses.
The enormous nearly $56 billion budget (which in raw numbers has increased by about 40% in the last 8 years) includes several business-friendly provisions:
- Extension of the Research & Development Tax Credit
- Extension of the Angel Investment Tax Credit
- Extension of the River Edge Redevelopment Program
- Extension of the Pass-Through Entity (PTE) tax election
- One-year delay of the Interchange Fee Prohibition Act
However, several revenue measures should cause concern including:
- Changes to the Net Operating Loss (NOL) deduction
- New taxes affecting digital advertising
- Digital asset taxation
- Social media platform fees
The Chamber argued these measures could discourage investment and reduce Illinois’ competitiveness.
Overall Illinois Chamber Assessment
The Illinois Chamber characterized the session as producing a combination of progress and ongoing challenges:
Positive developments
- Extension of key economic development incentives
- Continued support for research and innovation
- Transit governance reform
- Delay of the Interchange Fee Prohibition Act
- Investment in infrastructure and workforce initiatives
Primary concerns
- New business tax increases
- Higher regulatory burdens
- Potential impacts on Illinois’ competitiveness
- Continued uncertainty surrounding digital taxation and other new revenue measures
The Illinois Chamber applauded that the state made meaningful investments in growth and infrastructure but warned that the combination of new taxes and regulatory changes could offset some of those gains for employers.
Federal
Permitting reform – The US Chamber is actively engaging on the issue of reforming the speed, transparency, and logic in processing applications for federal permits for business. If successful, the Permit America to Build legislation has the potential to positively impact the economy by streamlining processes for job creators.
Iran – The U.S. Chamber provided an outstanding analysis regarding the reopening of the Strait of Hormuz. It is expected to ease pressure on global commodity markets, but businesses and consumers should not expect prices to return to pre-conflict levels immediately. Although oil and other commodities are flowing again, supply chains will take time to normalize and some costs are likely to remain elevated.
Key Takeaways
1. Oil prices should decline, but gradually
- During the disruption, roughly one-fifth of the world’s oil supply passing through the Strait was affected, driving crude oil prices sharply higher.
- As shipping resumes, increased supply is expected to lower crude oil prices and, over time, gasoline and diesel prices.
- Analysts caution that markets will continue to price in some geopolitical risk until shipping fully normalizes.
2. Energy is only part of the story
The Strait of Hormuz is also a critical route for:
- Liquefied natural gas (LNG)
- Aluminum
- Helium
- Sulfur
- Fertilizer feedstocks
These commodities are essential inputs for manufacturing, construction, agriculture, electronics, and healthcare. Supply disruptions increased costs across many industries.
3. Prices won’t fall immediately
Even after shipping resumes:
- Ports must work through vessel backlogs.
- Shipping schedules need to normalize.
- Manufacturers must rebuild inventories.
- Companies may continue paying higher insurance and freight costs.
As a result, businesses could continue facing elevated input costs for weeks or months.
4. Tariffs compound the problem
The article notes that many businesses have already been absorbing higher costs from tariffs. The Strait disruption added another layer of expense through higher transportation and commodity costs, increasing pressure on retail prices for imported goods.
5. Consumer prices may stay elevated
Products likely to remain under price pressure include:
- Gasoline
- Air travel
- Food (through fertilizer and transportation costs)
- Construction materials
- Electronics
- Apparel and footwear
Even if commodity prices decline, retail prices often adjust more slowly because businesses work through higher-cost inventory.
Implications for Businesses
The U.S. Chamber suggests companies should:
- Continue monitoring energy and shipping markets.
- Prepare for ongoing price volatility.
- Diversify suppliers where possible.
- Review inventory strategies for critical inputs.
- Expect continued uncertainty in global logistics despite the reopening.
Bottom Line
The reopening of the Strait of Hormuz is a positive development that should reduce pressure on global energy and commodity markets. However, because of shipping backlogs, higher logistics costs, and lingering geopolitical uncertainty, businesses should expect a gradual—not immediate—decline in prices. Industries that rely heavily on fuel, fertilizers, industrial gases, and imported raw materials are likely to feel the effects of the disruption for some time even as market conditions improve.