JANUARY 2020 NEWSLETTER To promote, educate and advocate for the Residential Building & Remodeling Industry; providing resources that benefit industry professionals and consumers in the communities we serve. Christmas cheer was over flowing at the HBR / RASI event. Over 200 industry friends gathered to celebrate the season with Santa, delicious food, drinks and smiles all night long. The HBR PWB (pictured right) set up their silent auction with over 70 items that helped raise thousands for scholarships that will be awarded to deserving young ladies. WHATS INSIDE Upcoming Event Registrations 2019 TOP SQUAD Score of 302 Jan 10 - LRRP Lead Paint Refresher Course Jan 31 - Government Official Reception AND Installation of Officers & Industry Awards NEW LOCATION Regency Conference Center Mar 12 - Anybody’s Game, Networking with a Swing NEW PROGRAM: B T-REX Showcase for members to show off their industry craftsmanship and expertise thru trusted HBR promotion. “Great group of folks. They are always welcoming and easy to talk to. There is always functions to attend with a variety of venues so you can easily find common interests and events of interest with other members.” - Marty W, 6 Year Member “What you can learn is a huge benefit to anyone wanting to be successful in the home building and remodeling industry.” - Mark F, 42 Year Member NAHB Legal Support Sewer & Water Tax-Exempt Senate Bill Watch Adjoining Landowner Act - Angry Neighbor case Erosion, Sediment & Storm Water Control Seminar Page 1 Christmas Party photos Membership Updates & Incentives 2020 Annual Sponsorship Registration

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Merry Times For All! Page 4

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Corporate Sponsor Page 7

SPECIAL THANKS TO ALL OUR DONORS Your Kindness & Generosity Helped Raise Thousands of Dollars for our PWB Scholarship Fund 1st National Bank of Waterloo Andrea Cockrell / Raintree Salon AppleBees Art Stumpf AUTCO Home Appliances Beast Craft BBQ Becky Brown Bella Milano Benchmark Title Beth & Scott Jacob Brittney Raysdale Busey Bank Cathy Miller Century 21 Veliz-Vice Team Cherity Freeze Chevy’s Mexican Restaurant Chick Fritz Distributing Color Street, Christina Pirtle Custom Floors and More Custom Marble Dewey’s Pizza Drake Construction Eckert's Far Oaks Country Club Flamentco's - The Place Fischer Lumber Fox Creek Golf Club Freddy's Frozen Custard Gateway Arch Gateway Grizzlies Governors Run Golf Course Great Clips Jacob Family Enterprises Kunz Carpentry Lacy Hartlieb Laura Mergelkamp Page 8 Light Brite Distributing Lockhaven Golf Club Lowes Mark & Mary Ann Drake McAlister’s Missouri Botanical Garden Mungos No Jacks Bar & Grill Papa Vito’s Peel Wood Fired Pizza Porter Paints Red Robin Rodan & Fields Roland Barkau Memorial Golf Course RP Lumber Sawdust and Glitter Scott Gruber Sherwin Williams SLD Enterprises Starbucks Steele Plumbing, Highland Sure Shot, Mascoutah Susie Dedmon/Susie’s Stylin Designs Tamarack Country Club Tastefully Simple Tavern on Main Texas Roadhouse/Twist & Bounce The Edge The Orchards Golf Course The Press Coffee & Tea, Trenton Top Golf Tricia Buehne Turf Bar, Breese Wells Fargo Who Dat's World Wide Technology Speedway

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FRIDAY 28 2pm—8pm SATURDAY 29 10am—7pm SUNDAY 1 11am—4pm Interactive floorplan www.hbrmea.org/ FEB FEB MAR

January FRI PAC Government Official Reception 31 5:30 pm - 6:30 pm Regency Conference Center Installation Banquet 6 pm Reception / 7 pm Dinner Regency Conference Center February FRI Annual Home Show 28 SAT Annual Home Show 29 2 pm - 8 pm Gateway Classic Cars O’Fallon, IL 10 am - 7 pm Gateway Classic Cars O’Fallon, IL March SUN Annual Home Show 01 11 am - 4 pm Gateway Classic Cars O’Fallon, IL THU Networking with a Swing 12 @ Top Golf in Chesterfield 11am - 4pm (Party Buses will depart from St. Clair Square) April THU HBR Spring Social 02 May FRI 15 June FRI 12 Sport Clay Shoot 8 am Registration NILO Farms, Brighton, IL Bury the Hatchett & Archery Attack 2 pm - 5 pm Sure Shot, Mascoutah, IL July FRI Annual Golf Tournament 17 10 am Registration Far Oaks Country Club Caseyville, IL September THU PWB Bowling & Go Kart Event 17 4 pm - 8 pm The Edge, Belleville October THU Member Social at Silver Creek 01 5 pm - 8 pm Belleville, IL November THU Trivia Night / Karaoke 05 5 pm - 8:30 pm VFW, Collinsville, IL December THU Christmas Party 10 5:30 pm - 9 pm Gateway Classic Cars Page 12 5 pm—8 pm Bella Vista Winery, Maryville 2020 HOME BUILDERS & REMODELERS SOCIAL EVENT CALENDAR

RENEWING MEMBERS Bath Fitter - 10 years Carpenters Regional Council - 5 years Remington Properties - 4 years Weyerhaeuser - 3 years REMODELERS COUNCIL Daech & Bauer Roofing Helitech Waterproofing & Foundation Repair PROFESSIONAL WOMEN IN BUILDING COUNCIL First Mid Bank & Trust (2) • • Let your industry friends know why you are a member. • Get them to join the HB&R. Once you have 3 in 2020 your next membership renewal will be FREE. MEMBERSHIP APPLICATIONS AVAILABLE AT WWW.HBASWIL.ORG/JOIN-HBR-TODAY Page 13

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Bipartisan Senate Bill Restores Tax-Exempt Status for Developers’ Sewer and Water Contributions Sens. Jeanne Shaheen (D-NH), Lisa Murkowski (RAK), and Maggie Hassan (D-NH) introduced legislation to address an unintended consequence of the Tax Cuts and Jobs Act of 2017 that increased costs for some builders and developers. For builders and developers working in areas served by a for-profit, corporate water utility, a small tax change in the 2017 tax reform bill resulted in higher sewer and water costs. As part of the new tax law, a longstanding exemption to the tax treatment of contributions in aid of construction (CIAC) was removed to the detriment of housing affordability. Now, in areas served by a corporate, for-profit water utility, when a builder installs new water or sewer infrastructure to support additional housing — at no cost to the existing residents — that infrastructure is taxed by the federal government. In some states, affected utilities are required by the public utility commission to pass this additional tax liability back to the developer in form of a gross-up fee, in certain cases reaching as high as 40% of the cost of the infrastructure. Other state regulators have allowed the utility to add the tax increase into the rates charged to all ratepayers. Although the tax change only affects for-profit, corporate utilities — not municipal or other non-profit water utilities — when the developer is expected to cover the grossup fee, this can add thousands of dollars to the cost of building a home. S. 2942 would restore the exemption for water and sewer CIACs so that they are no longer included in the utility’s gross income. NAHB applauds Shaheen, Murkowski and Hassan for introducing legislation to restore within Section 118 of the tax code the exemption for water and sewer. At a time when the country faces a housing affordability crisis and rising costs associated with aging infrastructure, removing the water and sewer tax exemption made no sense. It is time to fix that mistake, and NAHB urges Congress to pass S. 2942. In Ryan v. City of Chicago, 2019 IL App (1st) 181777, a home builder mistakenly constructed a home within the two-foot setback adopted in the City of Chicago. Even though the new homeowners applied for and obtained a 2.5 inch setback variance from the Chicago Zoning Board of Appeals for the setback encroachment, the adjoining property owner filed a lawsuit against the City seeking an order to require the home to be moved out of the setback. The matter ended up in the appellate court. The appellate court first ruled that statute commonly referred to as the Adjoining Landowner Act relied on by the Plaintiff expressly did not authorize a lawsuit against a municipality relating to enforcement of zoning regulations; and then ruled that the City had authority and discretion in regard to how it would enforce its ordinances; so declined to require the home to be moved. While common sense did win out, in the end, the litigation costs, and the fact that the homeowners and builder would not enjoy the same immunity from the Adjoining Landowner Act as the City was found to have, under-score the need to make sure ordinance requirements are being followed by the construction team. Angry neighbors are no small matter. Page 15

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Lawmakers sold the idea of a lottery with the promise the money would go toward education. But in reality, students never see the money. In Illinois, popular lottery scratch-off tickets should come with the feel-good side benefit of helping public school students, right? Wrong: Illinois’ pension crisis guarantees lottery money never makes it to classrooms. When lawmakers were debating the Illinois Lottery in 1973, some of the public opposition was overcome by lawmakers promising “the state share [of lottery revenues] would be used entirely for public schools,” according to The Associated Press at the time. That promise was soon broken when the lottery started in 1974 and profits were deposited into the state’s general revenue fund, which pays for far more than just schools. But in 1985, former Gov. Jim Thompson signed legislation ensuring all lottery proceeds were deposited directly into the Common School Fund, the portion of the state budget that funds education. As a result, lawmakers today can claim most lottery revenues are technically “funding education.” The lottery itself pushes that narrative: “Twenty-five cents of every dollar spent on the lottery goes to fund public education, infrastructure projects, and other special causes.” A closer look shows that is a disingenuous claim. As far back as 1991, the Southern Illinoisan reported that saying lottery proceeds all go to the Common School Fund is “both accurate and meaningless.” More recently, WBEZ referred to the use of lottery proceeds by the state as a “shell game.” The main reason is lottery profits do not typically represent a net increase in state spending on education. Instead, lottery money simply frees up revenue that would have gone to education and allows lawmakers to spend it on other things. Lottery money never really makes it to the classroom. Instead, those revenues are more than eaten up by annual contributions to teachers’ pensions. Pension contributions to the Teachers’ Retirement System are paid from the Common School Fund. For the current budget year, net lottery proceeds after payouts and expenses are projected to be $745 million. Meanwhile, the state’s payment to TRS this year is just under $5 billion. The money is going directly to pensions; students do not benefit from it. This school year, 36% of spending on education is going toward pensions. Spending on teacher pensions has risen 200% while spending on students in the classroom has risen just 20% since 2000. Lawmakers sealed the deal on this broken promise in 2009 when they capped the amount of lottery money that would be deposited into the Common School Fund. All proceeds above 2009 funding levels are now diverted to capital projects. Rising pension costs draw lottery and other funding away from classrooms as well as drive up property taxes, but there is a solution. Lawmakers can agree to amend the Illinois Constitution to protect earned pension benefits while allowing for changes to future, unearned benefits. Pension spending since 2000 has grown 501% as core services have been cut by the state. Illinois’ state and local governments already spend the most in the nation on pensions as a percentage of their revenues – about double the national average, data from the National Association of State Retirement Administrators shows. It is not a matter of Illinois taxpayers failing to pay enough toward pensions. It is a matter of where state leaders place their priorities, and priorities are defined by where they spend money. On Nov. 3, 2020, voters will be asked to amend the Illinois Constitution to eliminate the current flat tax guarantee and give lawmakers greater power to divide up Illinoisans and tax them at different rates. Gov. J.B. Pritzker is pushing a progressive income tax hike as a fix for state finances, but the $3.4 billion he projects from the tax is enough for only about four months of pension payments. Illinois politicians have a history of broken promises to taxpayers, including that the lottery funds education. Overtaxed Illinoisans are aware of that history, which explains why nearly half of likely voters in a recent survey viewed the progressive tax as nothing but a “blank check” for more taxes and higher spending. Pritzker projects $3.4 billion from the progressive tax yet has made spending promises that total $10 billion. Keeping Pritzker’s promises would require a tax increase of $3,500 on the typical Illinois family. So, what are the odds Pritzker and state lawmakers will keep this promise not to use the progressive tax to go after middle-class taxpayers? About the same as winning the lottery. Adam Schuster Director of Budget and Tax Research Page 17

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6100 West Main Street Maryville, IL 62062 Phone: 618-343-6331 E-mail: tbutler@hbrmea.org Web: www.hbrmea.org

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