SPRINGFIELD, Ill. (AP) — Gov. J.B. Pritzker on Wednesday signed a state spending plan for the coming year, bragging about a sixth consecutive balanced budget “while putting money back in the pockets of everyday Illinoisans.”
The Democrat’s imprimatur formalized a $53.1 billion fiscal outline, which he pointed out is 1.6% more than what the state will spend this year, but which is $12.8 billion, or 32% higher than his first budget in 2019. It’s $400 million more than Pritzker proposed in February.
The latest plan requires new revenue, and there are $725 million in tax increases in sports betting, video gambling and a continued limit on business operating losses to fill the gap for the fiscal year that begins July 1.
Pritzker continues to remind taxpayers that he took over from a governor and Legislature that could not agree on a spending plan for two years. His budgets since have reduced tens of millions of dollars in debt, kept woefully underfunded pension contributions on track and built a $2.3 billion balance in the so-called rainy day fund that is a hedge against economic downturn.
“We are on a trajectory of sustainable long-term growth, and this balanced budget boosts us further in the right direction,” Pritzker said at a Chicago news conference. “We achieved all this while putting money back in the pockets of everyday Illinoisans.”
The budget eliminates the 1% sales tax on groceries and creates a first-ever child tax credit, as much as $300 for households with children under 12.
The spending plan includes a $350 million boost for K-12 education — the baseline set in a 2017 education funding reform law — plus $100 million for other school programs, a pilot program to address the teacher shortage and initial funding for a new Department of Early Childhood.
Higher education gets a 2% increase, or about $31 million and needs-based Monetary Award Program grants for college-bound students increase by $10 million.
There’s $290 million to fight homelessness, including $75 million for rental assistance.
“You’re going to continue to see we are investing not just for today, not just ensuring that we have balanced budgets, ensuring that we are keeping the trains on time and keeping the lights on. But we’re making investments for the future,” said House Speaker Pro Tempore Jehan Gordon-Booth, a Peoria Democrat who negotiated the budget.
The General Assembly had trouble coming up with the revenue. Despite holding a supermajority, the House pulled an all-nighter, failing on two votes to adopt the revenue package and then suspending their own rules to make a third attempt which won a majority as dawn was breaking on May 30.
It raises $526 million by extending a cap on tax-deductible business losses at $500,000. There’s also a cap of $1,000 per month on the amount retail stores may keep for their expenses in holding back state sale taxes. That would bring in about $101 million.
And there would be $235 million more from increased sports wagering taxes and on video gambling. Pritzker wanted the tax, paid by casino sportsbooks, to jump from 15% to 35%, but it was ultimately set on a sliding scale from 20% to 40%.
Pritzker bristled at a suggestion that Illinois’ tax structure is outsized and its budget, bloated.
“We do not have the highest state taxes. We spend on a per capita basis about 20th among the 50 states, so our spending is not out of line,” Pritzker said. “And we do an excellent job of making sure that we’re addressing the challenges that are facing everyday Illinoisans.”
The law also grants Pritzker’s desire to provide $182 million to fund services for tens of thousands of migrants seeking asylum in the U.S., largely bused to Chicago from Texas, where they cross the border. And it provides $440 million for health care for noncitizens.
That drew the ire of the Senate’s Republican Leader, John Curran of Downers Grove, who said in a statement that “it is grossly unfair for Gov. Pritzker to raise taxes on Illinois families and businesses to pay for the migrant crisis he created.”
Pritzker has repeatedly said a federal solution on immigration reform is necessary to solve the border crisis, but failed attempts at compromise in Congress have Democrats and Republicans pointing fingers at one another.
Another Pritzker victory came in eliminating the 1% tax on groceries. But because the tax directly benefits local communities, the budget plan would allow any municipality to create its own grocery tax of up to 1% without state oversight.
And those with home-rule authority — generally, any city or county with a population exceeding 25,000 — would be authorized to implement a sales tax up to 1% without submitting the question to voters for approval.
