Pritzker Says No Tax Hike, No Federal Bailout to Close Budget Hole, but Unclear on Specifics
Governor JB Pritzker told selected media Tuesday he did not plan to increase income taxes to close an expected hole in the state budget for the next fiscal year beginning in July. Wednesday, he also says the state will balance the budget without a federal bailout, though his office offered few specifics.
After consistently saying for months he would raise income taxes on every Illinoisan if voters shot down his proposed graduated income tax in November, it appears Governor JB Pritzker is backing off his pledge.
Pritzker’s office sent a “budget outline” to selected media members and some legislators Tuesday. The Illinoize was not given the document even after requesting it Tuesday, but were provided it by a source Wednesday morning.
In it, the Governor’s office says it will present a budget that increases funding for the Illinois Department of Public Health, Department of Children and Family Services, Illinois Department of Employment Security “and others,” though they intend to keep spending in the next fiscal year flat from the current year, which was estimated to be $4-5 billion out of balance.
Pritzker is scheduled to give his State of the State and Budget address next week, but hasn’t announced how it will be presented as the legislature canceled nearly all session days in the month of February.
The proposal will also include what the Governor’s office calls closing “corporate loopholes,” or tax breaks to businesses around the state. In January, Pritzker proposed a plan to decouple the state from $500 million in business tax credits, but the legislature rejected the proposal at the close of the last General Assembly. It is unclear if the new proposal will be similar to the original decoupling measure.
It appears the Governor plans to reinstitute so-called “fund sweeps” across state government. One the memo from the Governor’s office appears to plan to raid is the cigarette tax, a portion of which is set aside for paying back part of a $45 billion infrastructure bill passed in 2019. Other cigarette taxes pay for things like the common school fund and long term care facilities.
Pritzker was roundly criticized in May when he supported a budget which lawmakers left a wide hole anticipating a federal bailout which never came.
Asked Wednesday at a news conference in Quincy if his proposal would include a federal bailout, Pritzker said no.
“We’re gonna have to make some painful cuts in state government in order to balance the budget,” Pritzker said. “It’s also reflective of the fact that the economy, actually, in Illinois has done better than people had expected. Businesses are up and running. We’ve lost fewer jobs anyway than people expected. The result of all that is more revenue to the state.”
An Illinois Commission on Government Forecasting and Accountability report in November showed the state actually had higher than projected tax payments in FY2021, but that was because the income tax deadline was moved from April to July in the new fiscal year. Pritzker used some of the revenue to pay off federal loans early.
It is unclear how the legislature plans to address budgeting this year, as a legislative schedule remains unclear and the House has a new Speaker, changing Democratic leadership for the first time in nearly four decades.
