Tax Relief

Illinois passes $46.5B finances with tax relief, elevated spending

The Illinois General Assembly has approved the state’s spending plan for the next year. It includes $1.8 billion in tax cuts, rebates and holidays aimed mostly at consumers as well as increased state spending and funding for pandemic-related programs through continued federal funding.

In a vote late Friday night, the Illinois Senate approved the plan 34-19-1. Two Democrats, Sen. Suzy Glowiak-Hilton, D-Western Springs and Sen. Rachelle Crowe, D-Glen Carbon voted against the budget. After working through the night, this was followed this morning by approval in the House on a 72-42 vote.

Earlier story:Democrats finalize state budget, focus on crime bills

Though negotiations and appropriation meetings have been happening for several weeks, formal debate over the budget began Friday morning and lasted until legislators approved the budget at about 6 am today, with lawmakers working through the night.

The timeline, and the fact that the final 3,448-page budget was not made public until just before midnight on Friday, caused consternation among Republicans.

“Whoever is in charge of time management around here needs to be fired,” said Rep. Blaine Wilhour, R-Beecher City, just past 5 am today.

The budget, formally HB 900, was passed along with two other bills laying out the state’s finances for the next year. HB 4700 is a bill to implement the state’s budget as well as SB 157, a plan outlining a set of tax relief provisions.

“This is a balanced budget,” said Rep. Greg Harris, D-Chicago, the Democrats’ top budgeteer. “This year we have the largest budget surplus the state has had in a quarter of a century.”

Republicans were sharply critical of the plan, with Senate Republican Leader Dan McConchie and R-Hawthorn Woods, calling the plan’s temporary tax relief efforts “an attempt to buy your vote.”

House Majority Leader Greg Harris, D-Chicago, right, gets a hug from Illinois House Speaker Emmanuel

Illinois residents to see $1.8 billion in tax relief

Illinois’ new budget includes a plan to deliver $1.8 billion in mostly temporary tax cuts.

“Everyone across our state has struggled,” said Sen. Michael Hastings, D-Frankfort, during debate in the early hours of Saturday morning.

“The savings and relief plan prioritizes families, giving them the much needed and much deserved assistance,” he later added.

The plan includes a direct payment to Illinoisans making less than $200,000 per year or $400,000 per year for couples filing jointly. Each taxpayer would receive $50, plus $100 for each dependent, capped at three.

It also permanently expands the state’s earned income tax credit to noncitizens and increases the payment up to 20% of the federal earned income credit, up from 18%.

The plan also includes a property tax rebate for residential homeowners up to $300 per household.

Finally, it provides temporary cuts to some consumer taxes, including a 12-month removal of the 1% sales tax on groceries and a six-month delay to a planned increase on the motor fuel tax. It also suspends the sales tax on items bought for school for 10 days between Aug. 5 and Aug. 14.

The plan was passed with near unanimous support. The House passed it on a 110-0 vote with four lawmakers voting present while the Senate voted 55-1 to approve the plan.

Republicans criticized the balance between the tax relief plan and the overall budget’s spending.

“There was a deliberate choice made not to give people their money back, but to take it and spend it,” said Sen. Chapin Rose, R-Mahomet. Rose pointed specifically to the temporary nature of these tax breaks. He called this use of federal stimulus funds “a missed opportunity.”

Others criticized the temporary nature of the tax cuts and characterized the $50 refund as being too small.

“That doesn’t even buy me a half a tank of gas,” Wilhour said a few hours after voting for the plan. “I can’t even take my kids to McDonalds for that. It’s an insult, an insult to the struggling families of this state.”

Increased spending highlighted partisan divide

The 2023 budget includes several spending increases, according to its architects, Harris and Senate Appropriations Committee Chair Sen. Elgie Sims Jr., D-Chicago.

Some of the largest expenditures are related to what Democrats have characterized as “fiscal responsibility.”

This includes putting $500 million above the required amount into the state’s pension fund, which Harris said would result in $1 billion in savings over time. It also includes paying down $3.2 billion worth of state debts, including a $2.7 billion payment into the Unemployment Insurance Trust Fund, which was $4.5 billion in debt.

More:Financial stabilization or backdoor tax? Lawmakers tackle Illinois’ unemployment debt

The budget also includes $200 million in funding going to law enforcement agencies, $250 million going to violence prevention programs, $5 million going to the attorney general to prosecute organized retail crime and $5 million in grants to police departments, according to Harris.

The budget also directs $1 billion to the state’s Budget Stabilization Fund, a “rainy day” fund which was all but depleted during an impasse lasting more than two years that resulted from failed negotiations between Democratic lawmakers and Republican former Gov. Bruce Rauner.

The budget also includes a slight increase to a state fund which is meant to distribute income tax revenue to cities, towns and other local governments.

This comes after a campaign the Illinois Municipal League began in February. The IML is a group that advocates for local governments at the Capitol.

Since 2010, the state has gradually decreased the percentage of income tax revenues going to local governments from 10% in 2011 to 6.06% last year, according to the IML. The approved budget includes an increase to 6.16%.

This highlighted a sharp divide between legislative Democrats and their Republican colleagues during debate.

“We are in an inflation-based sugar high,” said Rep. Mark Batinick, R-Plainfield.

“Winter is coming and we haven’t prepared in the way we need to prepare,” said Batinick. “We need to be doing that.”

The budget represents a 10% increase in spending, despite having declining revenues, according to Rep. Tom Demmer, R-Dixon. He said the budget was only balanced because of one-time income sources coming from the federal government’s COVID-19 relief plans.

But Democrats rejected this characterization and attacked Republicans for opposing the budget.

“You actually see fiscal responsibility after years and years of complaining about fiscal responsibility and you won’t even lift a finger to vote yes to support fiscal responsibility,” Harris said in a fiery speech directed to Republicans. “You liked it better when you were driving the state into the ground, you liked it better when you had an unpaid bill backlog of $17 billion, you liked it better when we were laying off workers, you liked it better when people were suffering in our communities.”

The budget now awaits approval from Gov. JB Pritzker. Once Pritzker signs the bills that make up the new budget, it will go into effect at the start of the state’s fiscal year, July 1.

Contact Andrew Adams:; (312)-291-1417;

Related Articles