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Pritzker's election year budget address promises temporary election year tax discounts

The promised tax breaks are small and temporary, and critics highlighted the election year rhetoric. Still, the Governor's own aides admit finances are at a “tread water point.”
Pritzker's election year budget address promises temporary election year tax discounts

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Pritzker presents annual budget plan amid winter storm

By JOHN O'CONNOR | AP Political Writer

SPRINGFIELD, Ill. (AP) — Gov. J.B. Pritzker presented an annual spending plan Wednesday not amid the usual pomp of a joint session of the General Assembly but to a mostly empty chamber during an onslaught of winter weather in Illinois.[1]

With inflation soaring and drifting snow falling, Pritzker offered an antidote to the pocketbook pinch, suspending or offering rebates for taxes on groceries, gasoline, and property.[2] While the budget address is an official speech prescribed by law, it also serves as an unofficial opening to his campaign for a second term.

Pritzker offered a $45.4 billion general funds budget for the year that begins July 1, a 3.4% decrease from the current year. It includes billions of dollars of debt reduction, giving Pritzker leeway to try to ease the inflation pinch.

Typically, members of both House and Senate would gather in the House chamber to receive the governor’s spending ideas, but the three-day winter storm forced legislative leaders to cancel all three scheduled session days this week.[1:1]

Pritzker instead chose to speak on the same Old State Capitol stage where Abraham Lincoln worked as a representative and then gave the electrifying “House Divided” speech to begin one of the more critical campaigns of his career.[3] He paid tribute to special guests, a group of teachers and medical professionals battling the COVID-19 pandemic who "have showed up to work ... during the worst health crisis our state has ever seen.”

The state of the state, Pritzker said, is “strong, unbreakable and enduring.” So with inflation pushing 7%, the governor wants to lift for one year the 1% sales tax on groceries, freeze the motor fuel tax that goes toward road building at 39.2 cents per gallon, and offering a rebate of up to $300 dollars equal to the property tax credit available on income taxes.[4]

The 57-year-old Democrat believes he's on solid ground because of a stronger economy and his administration's attention to past debt. In November, Pritzker's budget office reported tax revenue in the current year is $1.7 billion higher than anticipated.

Pritzker said the budget balances even without $8 billion in federal pandemic relief. He noted the contribution of Democratic Comptroller Susana Mendoza.

“Painstaking work has been done ... over the last 3 years to diligently and meticulously reverse the irresponsible decisions of the past and ensure that responsible budgeting would become the rule, not the exception," Pritzker said.

But Pritzker's assurance is contrary to the outcry from Republicans vying for Pritzker's job.

A key challenger claimed that increased taxes are inevitable once federal money is spent. Aurora Mayor Richard Irvin reminded voters in a news release that Pritzker sought more revenue by increasing the share paid by wealthy taxpayers through a graduated income tax, which voters rejected in 2020.

“He plans to raise billions more in taxes when the federal money runs out," Irvin, who has yet to appear publicly in his campaign, said in the statement.

Sen. Dave Syverson said the federal money reduces overall spending, but disguises a $2.5 billion increase in operations. Those are costs that will continue even when there's no federal money to cover them, the Rockford Republican said, presenting “a massive cliff after the election that unfortunately taxpayers are going to get stuck with.”

Pritzker's office countered that the $8 billion in federal aid — the current budget uses $1.5 billion and there's $535 million in the proposed plan — has been used for pandemic-related expenses, not ongoing programs, and that they've adjusted for a federal funding dropoff.

Bull Valley businessman Gary Rabine, another GOP hopeful, was unconvinced, saying in a statement that President “Biden paid off J.B.’s Illinois credit cards last year, but we are still in a fiscal death spiral.”

There's no question the plan shows substantial investments in debt long haunting the state. Pritzker intends to eliminate this year the $898 million in past-due bills for the employee health insurance program. What in recent years has been a monstrous backlog of bills due state vendors — $7 billion on Wednesday — will be reduced to $2.7 billion, which aides say puts the balance on a 21-day payment cycle.[5] There's even $900 million socked away in a rainy day fund for unanticipated emergencies.

And the leviathan hole in state employee pension funding, about $140 billion, will get an additional, if small, contribution. After years of underfunding, Pritzker and his two predecessors have been forced to put billions of dollars more into five retirement systems to catch up with a state law requiring substantially paid-up coverage by 2045. The $9.6 billion put toward pensions in the coming budget still isn't enough to stay on track with a law requiring substantially paid-up coverage by 2045. Pritzker is bumping that up by $500 million to reach what aides call a “tread water point.”

There is additional program spending as well. The Department of Children and Family Services would get a 16% increase, or $200 million, in part to hire 360 more employees to fill vacancies and improve the caseloads of existing child welfare workers. Diedre Silas, a 36-year-old child protection specialist, was stabbed to death during a home visit in January, prompting calls to better protect caseworkers.[6]

The Department of Human Services would get $95 million more to care for residents with intellectual or developmental disabilities in a continued effort to meet the demands of a federal court order and to increase reimbursements for services as recommended by a key study released two years ago.[7]

The $350 million annual increase for K-12 education promised in a 2017 public education overhaul is there and the needs-based Monetary Award Program to assist with college education will increase to $600 million, a 28.5% increase.

Rising crime will be a major issue in the campaign. Pritzker would put $800 million into prevention programs, recruit 300 additional state police officers, put $50 million in cannabis tax revenue toward communities with crime problems and increase funding to prevent gang crimes, hate crimes and increase staff at forensic crime labs.

Pritzker will continue to portray himself as the governor who put the state's finances in order following years of partisan rancor that forestalled approval of any budget for two years, leaving in its wake debt and devastation to social services. But the billionaire philanthropist and equity investor has expensive challenges ahead.

His 2018 campaign was the second-most expensive gubernatorial race in U.S. history, in part because of support for his opponent from the state's richest man, Citadel CEO Ken Griffin. Griffin has pledged up to $300 million to defeat Pritzker, and a slate expected to win his support has been assembled, led by Richard Irvin, Aurora's first Black mayor, who announced his candidacy more than two weeks ago but has yet to make a public appearance.

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Follow Political Writer John O’Connor at https://twitter.com/apoconnor

Notes & References

  1. Press, Associated. “Weather and Risky Travel Cancels Legislative Work.” Chicago Journal. Chicago Journal, February 1, 2022. https://www.chicagojournal.com/weather-and-risky-travel-cancels-legislative-work/. ↩︎ ↩︎

  2. Mcdonald, Joe. “Asian Stocks Follow Wall St Higher with China, Korea Closed.” AP NEWS. Associated Press, February 2, 2022. https://apnews.com/article/coronavirus-pandemic-health-business-asia-financial-markets-63b3b4b7966b672d15e540c042dbca55. ↩︎

  3. “Indoor Work Complete, Old State Capitol Reopens to Tours.” AP NEWS. Associated Press, October 9, 2021. https://apnews.com/article/illinois-state-legislature-legislature-senate-elections-31a2c6e805cd0c23677d3002bc6d2af2. ↩︎

  4. Press, Associated. “Pritzker's Budget Includes $1b in Sales, Property Tax Relief.” Chicago Journal. Chicago Journal, January 31, 2022. https://www.chicagojournal.com/pritzkers-budget-includes-1b-in-sales-property-tax-relief/. ↩︎

  5. “Breaking down the Bill Backlog.” Susana A. Mendoza - Illinois State Comptroller. Accessed February 2, 2022. https://illinoiscomptroller.gov/financial-data/fiscal-information/archive/breaking-down-the-bill-backlog/. ↩︎

  6. Chicago Journal. “DCFS Worker Fatally Stabbed during Welfare Check.” Chicago Journal. Chicago Journal, January 6, 2022. https://www.chicagojournal.com/dcfs-worker-fatally-stabbed-during-welfare-check/. ↩︎

  7. O'connor, John. “Court Order Boosts Funding Plea as Lawmakers Build Budget.” AP NEWS. Associated Press, April 25, 2021. https://apnews.com/article/health-business-coronavirus-e78e0d07b979c2ed8ddcc07e91e57b93. ↩︎