FEB 03, 2022
A budget pitch for voters: Pritzker announces new spending, temporary tax relief thanks to budget surplus
Gov. JB Pritzker gives his annual State of the State and Budget Address at Illinois’ Old State Capitol in Springfield Wednesday. The in-person address in front of the General Assembly was cancelled because of the snow storm. [Blue Room Stream]
With just over nine months until he stands for reelection, Gov. JB Pritzker touted fiscal progress his administration has made while offering a positive outlook for the state’s future and announced a series of spending increases and tax cuts in his annual State of the State and Budget Address Wednesday.
With fresh bragging rights from a rare $1.7 billion budget surplus in Illinois for the current fiscal year, Pritzker proclaimed his administration was cleaning up the mess left behind by the state’s two-year budget impasse from 2015-17. Pritzker announced the state’s strong revenue performance was allowing him to propose some measures of tax relief to ease the burden of the pandemic and inflation on residents.
“As we move on to tackle the questions of what vital current priorities our government should fund, know that we start from a place where our bills are paid, our most pressing short-term debts are nearly gone and our most critical long-term financial liabilities are in the best fiscal shape they have been in since the turn of the century,” Pritzker said.
Pritzker is proposing four areas of tax relief for residents in his Fiscal Year 2023 budget: pausing a 1 percent grocery tax, pausing the annual inflation-based gas tax increase expected to be about 2 cents more per gallon, pausing license fees for healthcare workers and bars and restaurants and a 5 percent property tax rebate for qualifying owners. The relief amounts to about $1 billion in savings for taxpayers, while the state will pick up the tab on the lost revenue for municipalities in these areas, administration officials said.
“Whether it’s supply chain interruptions or increasing oil prices, inflation is squeezing Illinois families,” Pritzker said. “Government ought to do more to ease the pain and put more money into the pockets of hard working Illinoisans. Our budget success gives us the opportunity to do just that.”
All four proposed tax breaks are set to last for a single year.
While revenues are up this year, administration officials acknowledged they do expect fiscal year 2023 revenue to be lower. They are expecting a general revenue fund surplus of $458 million but predict corporate income tax revenue will decrease 5 percent and sales tax revenue will decrease 1 percent as the economy stabilizes.
Pritzker’s $112.4 billion budget proposal, which he says is balanced, also makes several investments aimed at tackling criticisms of Illinois’ financial state and complaints from Republicans.
The proposal would boost Illinois’ “rainy day” fund by $879 million from a combination of 2022 and 2023 revenue and some cannabis tax revenue.
The most recent report from Illinois Comptroller Susana Mendoza showed about $19.9 million in the state’s rainy day fund — a “pathetic” sum that could bankroll about an hour’s worth of state government operations, Mendoza told The Daily Line’s CloutCast podcast last month.
“The past few years have shown us rainy days do actually arrive,” he said.
Pritzker is also hoping to make significant investments in education and noted how much his administration has increased funding for education since 2019. Education spending would increase by $500 million under his proposal, leading to a $1.1 billion cumulative increase in Evidenced-Based Funding for school districts since Pritzker took office, according to administration officials.
Funding for MAP Grants for college students would also increase next year under his plan, amounting to a 50 percent increase since 2019, according to administration officials.
Pritzker also aims to address a point of recent criticism from Republicans with investments in public safety. His proposal calls for adding grants for law enforcement to purchase body cameras, which is required for departments under state law, along with funding for 300 new Illinois State Troopers. An additional $300 million would be allocated for violence prevention and youth job creation programs.
His spending plan also includes the creation of a Gang Witness Protection Program.
“If we want people to speak up without fear of intimidation, we need to give law enforcement the resources they need to protect victims and witnesses that want to do the right thing,” Pritzker said.
Funding for the Department of Children and Family Services would also increase by 16 percent next year under Pritzker’s proposal in an effort to add staff to the department. The department has recently faced criticism for failing to properly place youth in care, whichDirector Marc Smith has partially attributed to not having enough staff.
Pritzker also said his budget would make a historic payment toward pensions by contributing the legally required $9.6 billion plus an additional $500 million. He said it would be the first time since the 1994 “Edgar ramp” pension plan was enacted that the state will pay more than required toward pensions.
With an election coming up, Pritzker took several shots at critics he said are “spelunking for misery.”
“There have long been people in Illinois state politics who have cared more about promoting their own propaganda than they do about what’s best for your pocketbooks,” Pritzker said.
Pritzker tooted his own horn on his handling of the pandemic and the state’s ability to get people vaccinated. He said Illinois has created a “national standard” for keeping schools open during periods of high COVID-19 transmission with widespread testing in schools. He also took credit for getting the state’s economy back on track after the April 2020 recession.
He pushed back on political positions expressed by Republicans around the country, arguing Illinois is a state that will not restrict abortion, voting, teaching racial issues in schools or deny the science behind masking and vaccinations.
The first-term governor closed with a pitch to voters on his leadership philosophy.
“Leadership in times like these does not dance idly wherever the wind might blow,” Pritzker said. “Leadership in times like theses means having the courage to stand on the deck while the waves crash around you and you keep the ship pointing toward home.”
The line drew Pritzker his longest applause of the speech.
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