SPRINGFIELD, IL – Governor JB Pritzker proposes a budget of approximately $ 83 billion for fiscal year 2022 for expenses and income. While the financing remained unchanged in many departments, Pritzker guaranteed the agencies hardest hit by the pandemic a significant upturn.
The governor sent a clear message on Wednesday: Families will not see a tax hike. However, companies in Illinois could suffer a different fate. The administration predicts fiscal year 22 revenue of $ 41.7 billion. Of course, income taxes make up nearly 50% of that number.
Illinois could spend $ 41.6 billion over the same period, according to the governor’s office of administration and budget. However, Pritzker hopes the state could save around $ 932 million this spring by removing the “loopholes” in corporate taxation. He said it was the best option rather than taking money away from those struggling the most.
Pritzker administrative graphic explaining each business void.
“We will not treat people who have been decimated by this pandemic as road kill,” said Pritzker. “The neediest in our most desperate times deserve our help and we cannot let them fail.”
The Chicago Democrat said it had bold plans for the state budget. Even so, Pritzker stressed that the government must make tough decisions, just as families did last year.
“Right now we need to get a balanced budget that strikes the right balance between tightening our belts and preventing further trouble for Illinois people who are already carrying a heavy burden,” said Pritzker.
Republicans fight back
Republican leaders blew up the idea that Pritzker had overturned several tax incentives he agreed to in 2019. Jim Durkin, GOP chief of the house, said Illinois had already “let entrepreneurs reach for straws” to keep their businesses alive on Pritzker’s orders.
“Gov. Pritzker is now proposing a tax hike for everyone and saying they are just gaps, ”exclaimed Durkin.
The Western Springs native believes this is a form of repayment since Pritzker’s tiered income tax campaign has failed.
“Easy to blame Republicans. Well, Governor, I have news for you, ”said Durkin. “The tiered tax failed because Democrats, Republicans and Independents – a bipartisan electoral effort – said no.”
Illinois Comptrollress Susana Mendoza disagrees with Durkin’s logic. She says Republicans shouldn’t “cry badly” after campaigning against the progressive tax plan.
“We said from the start that it was math. Math should never be seen as a payback, ”Mendoza explained. “Either enough money comes in to meet basic obligations or there is no money.”
Senior budget officials told reporters on Wednesday that the General Assembly must approve any changes to corporate tax incentives. This will likely be one of the biggest debates for budgeteers before lawmakers come out with their plan this spring.
Rep. Tom Demmer (R-Dixon) said Republicans in both houses were ready to attend the grant committee hearings.
“However, we ask the governor’s office, the directors of the agencies and the department heads to be transparent about which realities they have identified in their budget, where we can see cost-effectiveness and spending reductions,” said Demmer.
Education funding dilemma
Meanwhile, the governor said he would protect the most vulnerable people in the state by improving child and family services, public health and human services, among other things. Pritzker said he’s also keeping his promise that schools won’t lose funding due to the pandemic. However, the governor noted that Illinois needs more federal funding to protect current K-12 spending levels.
“No school needs to cut its spending,” said Pritzker. “You can instead focus on meeting the needs of students who have tried studying during a chaotic and busy time.”
The Democrat hopes school districts will use the federal funds to follow President Joe Biden’s plan to safely return to face-to-face learning. Senate President Don Harmon (D-Oak Forest) noted that his caucus is always interested in finding educational resources. “This year won’t be any different,” added Harmon.
However, Senate majority leader Kimberly Lightford raised concerns about the education funding plan. While the Maywood Democrat appreciated the $ 543.7 million protection for the Early Childhood Block Grant, she wants to have bigger talks about $ US K-12 education.
“If we follow this plan, it will be the second year in a row that we have failed to meet our commitment to increase funding for public schools in Illinois,” said Lightford. “I understand this is a difficult fiscal year due to the pandemic, but our children and teachers in low-income communities can’t and shouldn’t have to wait forever to see the promised funding increases.”
The administration suggested that the State Board of Education distribute the $ 569.5 million provided from the CARES Act’s Federal Elementary and Secondary School Emergency Relief (ESSER) funds. Schools could receive an additional $ 2.25 billion in relief from a succession plan.
“Live within a real budget”
Republican Senate Chairman Dan McConchie (R-Hawthorn Woods) says Pritzker must face reality.
“He has no real idea what it is to live within a real budget and make real decisions based on real money and completely overhaul the budget. Adopt the reforms that are currently needed to keep us going to embark on a sustainable path into the future, “said McConchie.
Pritzker asked the Republicans about their budget solutions two months ago. However, the governor said he had faced silence. The leaders of both parties will now discuss the “right” steps until the legislature votes on the budget in May. Mendoza says this will be an extremely challenging budget year for everyone, especially with no extra revenue.
“This is not about spending unwise as much as people might want to believe. It’s more of a political topic of conversation. It’s like trying to manage your household and you just don’t have enough money to pay for food. We are there now, ”explained Mendoza. “I have an order book of $ 9 billion, if you include the credit we’ve given. These things require that we live within our means. But it’s tough to do when you come in $ 3 billion less than what you need for just basic government services. ”
Decisions based on justice and empathy
House Speaker Emanuel “Chris” Welch agrees that the legislature and governor have tough decisions to make. The Hillside Democrat said these discussions should include justice and empathy. Welch supports Pritzker’s plan for a standalone $ 60 million finance bill to help the Department of Employment Security. He also pointed to the significant budget improvements in veterans homes and in vocational training.
“To do this, we need to fill gaps in corporate taxes that made it easy for them to avoid paying their fair share. All in all, one thing is clear: we need federal support, ”said Welch. “Over the past year, state and local governments have been burdened with a range of new expenses, including testing, mitigation and vaccine distribution, due to COVID-19. I am glad that we finally have an administration that takes this seriously and understands that this is not a red-blue problem. ”