Pritzker Administration Pressed on Proposed Job Creation Tax Credits
Illinois Department of Revenue Director David Harris, a former Republican State Representative, called Governor JB Pritzker’s budget proposal “reasonable” and “balanced” during a testy hearing before a Senate committee Friday.
State Senators pressed the Pritzker administration Friday on plans to eliminate a tax credit for job creation as a part of closing the state’s budget gap.
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While the Pritzker administration has referred to the changes as “closing corporate tax loopholes,” three of the nine tax codes being removed or amended as part of the proposed budget were put into place by Pritzker as part of budget negotiations with state Republicans in 2019.
A phased repeal of the corporate franchise tax, an addition to what properties qualify for the state’s machinery and equipment sales tax exemption, and a tax deduction for creating new construction jobs in the state were added to the budget proposal put forth by Pritzker in 2019 to secure Republican support.
All three provisions would be delayed or removed in the governor’s plan in order to generate approximately $102 million in savings for FY 22
That third provision, branded as the Blue Collar Jobs Act, was meant to go into effect Jan. 2021. At the time of its passage, the bill was touted by both Pritzker and Republicans as a tax credit that would bring more jobs and businesses to Illinois.
However, the construction worker tax credit had its implementation delayed by Pritzker, who cited losses in tax revenue due to the coronavirus pandemic.
Sen. Chapin Rose, R-Mahomet, questioned Sturm, the governor’s budget director, on why a program passed with bipartisan support needed to be cut if the state expected a surplus.
“Here we are at the end of COVID with Illinois as one of the top states in the nation for unemployment, people desperately needing work,” he said. “Why on earth did the administration— did Governor Pritzker— decide, he's now going to back out, back out of, back down from, go back on, his word, his pledge, when he signed the Blue Collar Jobs Act?”
Democratic Sen. Linda Holmes, of Aurora, echoed his concerns.
The Governor’s proposal rarely is kept in tact by the General Assembly. It is unclear what direction the General Assembly will go to pass a budget by May 31.
