The Illinoize

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Pritzker to Propose One Year Tax Breaks, Republicans Want Long Term Relief

Governor JB Pritzker was scheduled to give his State of the State and Budget address Wednesday in Springfield, though it is unclear if he will proceed after legislators canceled session due to a pending snowstorm.

TUESDAY MORNING UPDATE:

The Senate will gavel in for a little while this morning, otherwise, they have canceled session for the week due to the pending snowstorm, but there has been rumbling that Governor JB Pritzker may still deliver a combined State of the State and Budget address Wednesday. His office hasn’t confirmed, but we’ll keep an eye out. As for now, I’ll go ahead with our initial preview story.

Governor JB Pritzker is expected to lay out a new state budget Wednesday, combining tax cuts with higher than expected revenue and dwindling federal rescue dollars.

The Governor’s office did not share details with The Illinoize, so we turn to the Tribune:

Democratic Gov. J.B. Pritzker’s reelection-year budget proposal on Wednesday will dangle the prospect of delivering relief on food, gasoline and property taxes to voters in a spending plan buoyed by an improved state financial outlook and federal coronavirus relief.

“The governor believes it’s important to focus on the cost of groceries, the cost of gas and the property tax burden and bring relief to families across the state,” Deputy Gov. Andy Manar, one of Pritzker’s top budget aides, said in an interview.

Pritzker’s nearly $1 billion tax relief proposal, which requires legislative approval and wouldn’t take effect until the state’s new budget year begins July 1, would suspend the 1% sales tax on grocery items, freeze the scheduled inflation-based increase to the gasoline tax, and offer homeowners a property tax rebate of up to $300.

Because the sales tax on groceries goes exclusively to local governments, Pritzker will propose that the state make up the difference, at an estimated cost of $360 million. The governor’s office estimates the state would forgo about $135 million in revenue for transportation improvements by freezing the gas tax and would pay $475 million in property tax rebates to homeowners.

While he declined to give a complete overview of Pritzker’s plan, including how much revenue the state expects to collect in the coming year or what total expenditures would be in the proposed operating budget, Manar said the governor will present a balanced proposal Wednesday to lawmakers. The current operating budget is roughly $42 billion.

“We’ve restored fiscal stability to the state budget,” Manar said. “We have balanced budgets. We have paid off debts, and we’ve controlled spending and caught up on our bills.

“That has not been the easiest task over the past several fiscal years. But the governor remains committed to introducing, negotiating and passing balanced budgets that meet his priorities and priorities of the people of the state.”

Republicans likely support temporary tax relief, even if it falls short of the permanent relief they’ve been clamoring for.

Sen. Chapin Rose (R-Mahomet), the Senate Republican budget point man, says he expects Pritzker to paint a rosy picture of state finances filled with fiscal responsibility, but he says state finances remain in perilous shape.

“That seems to be what the Democrat playbook is,” Rose said. “They keep telling people that despite the fact that there’s no food on the shelves, inflation is rampant, and there are no employees to work jobs, that everything’s fine. Everywhere you look, the actual ship of state is collapsing.”

Rose disputes Democratic claims they’ve righted state finances, pointing specifically to pensions and unemployment insurance.

“He [Pritzker] is going to tell you the state budget is balanced, but the unemployment insurance trust fund is underwater by billions,” Rose said. The fund pays out unemployment claims, and some estimates show a negative balance of up to $8 billion.

“At the end of the day, all this has to work as a matter of math,” Rose said. “I’ve sat through enough budget addresses to watch things be invented and wild contortions to try to claim the math works. It rarely does.”

Rose called one year tax relief an election year ploy by the Governor, who is seeking re-election in November.

“We don’t need single year gimmicks, we need long term tax relief for the people of Illinois,” Rose said. “While I think short term, one time relief is a positive step, I think we need to negotiate permanent relief.”

Patrick Pfingsten

@pfingsten1

patrick@theillinoize.com