Northwest Side legislators discuss proposed 2022 budget – Nadig Newspapers – Northwest Side Local Newspapers

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by JASON MEREL

Several Northwest Side legislators discussed Governor J.B. Pritzker’s $41.6 billion budget proposal for next year that holds the line on spending, proposes no tax increases, and closes corporate tax loopholes.

Pritzker said his proposed budget did not include increases to the income tax, spent $1.8 billion less than the fiscal year 2021 budget, sought to fully pay the state’s pension debt obligations and held the line on spending. He said he was able to balance the budget by closing approximately $932 million in corporate tax loopholes.

“I had bolder plans for our state budget than what I am going to present to you today (Feb. 17),” Pritzker said in a nod to his failed graduated income tax proposal that was rejected by voters.

The budget will keep spending at its 2021 levels for most departments, with the Department of Children and Family Services getting a 7.9 percent increase, or $1.5 billion more than last year. Of the $41.6 billion in expenditures, 17.3 percent is allocated to human services, 20.8 percent to PreK through twelfth grade education, 21.9 percent to pensions, 17.3 percent to health care, 8 percent to government services, 4.7 percent to higher education,4.5 percent to public safety, 5.1 percent to statutory transfers, 0.2 percent to economic development, and 0.1 percent to environment and culture, according to the budget.

The $41.7 billion in revenue is expected to come in from 48.3 percent in income taxes, 22.8 percent in sales taxes, 7.3 percent in corporate income taxes, 9.5 percent in federal sources, 4.4 percent in transfers in and 7.6 percent from other receipts, according to documents.

Democrats in the General Assembly expressed optimism toward the proposal but echoed a shared disappointment that the budget did not include additional funding for education.

“While the governor’s general approach is commendable given the circumstances, I’m disappointed that he has outlined a plan that doesn’t deliver schools the annual increase in evidence-based funding, nor an increase to the Early Childhood Block Grant to protect the early care and education workforce during a time when they have shown up every day to serve students and young children,” Senator Cristina Pacione-Zayas (D-20) said in a statement. Zayas was recently appointed to serve out the term of former Senator Iris Martinez, who was elected new Cook County Circuit Court clerk.

One issue noted by Senator Ram Villivalam (D-8) is that per capita Illinois is in the top five states as far as money going to the federal government and in the bottom five states as far as money coming back.

Villivalam said that Illinois needs to look at ways to expand access to federal healthcare for more residents to bring that federal money back to the state. He said federal transportation and infrastructure grants are another way the state can capture more federal dollars.

Pritzker proposed the state “decouple” from some of the tax incentives established in the 2020 CARES Act at the state level. He projected that the decision would give the state the ability to save as much as $500 million during a future budget crisis and the immediate savings amount to approximately $932 million.

Of that $932 million, $314 million would be saved by capping corporate net operating loss deductions at $100,000 per year, $107 million would be saved by treating foreign-source dividends as domestic-source dividends, $214 million by rolling back Tax Cuts and Jobs Act 100 percent accelerated depreciation, $107 million by accelerating the expiration of exemptions for biodiesel, $73 million by capping the Retailer’s Discount at $1,000 per month, $56 million by removing production-related tangible personal property from the MME Sales Tax Exemption, $30 million from the reverse repeal of the corporate franchise tax, $16 million by eliminating a new add-on income tax credit for construction job payroll expenditures and $14 million saved by resetting the tax credit for private school scholarships at 40 percent.

Some Republican lawmakers seized the opportunity to criticize Pritzker’s proposed elimination of nearly one billion dollars of corporate tax incentives and characterized the closure as a tax on already-hurting business owners.

“Governor Pritzker’s budget proposal included hyper-partisan rhetoric that has no place in our discourse at this time. Illinoisans want legislators to do what they were elected to do: solve the State’s issues, not draw deeper lines in the sand and dig in,” state Representative Brad Stephens (R-20) said in a statement. “Governor Pritzker going back on business reforms he negotiated with House Republicans in 2019 and calling them ‘loopholes’ smells of retribution to General Assembly Republicans because the people decided they did not want his graduated tax amendment. Instead of digging us further into the financial hole the State is in with partisan rhetoric, we must find common ground in the middle that addresses the State’s current financial issues. We must also do this while we continue to create jobs for people in a safe environment, fund education, and find a way to hold a line on taxes.”

Senator Robert Martwick (D-10) said he has no patience for when Republicans criticize without presenting actionable solutions.

 “Their calculators must work differently than mine does,” Martwick said. “If Republicans say that they are against closing these tax loopholes, then I want to know what cuts they’re proposing and who the tax burden will shift to?”

“For too long, Republicans have been the party of No,” Martwick said. “No cuts, and no tax increases. You can’t continue to spend and at the same time hand out sweetheart tax deals to the wealthiest corporations. This is the sort of fiscal irresponsibility that has forced the burden of massive debt upon the shoulders of every citizen in Illinois and has directly led to our high tax burden. If Republicans truly care about taxpayers, they need to start by being honest about our finances and offer solutions.”

The Illinois House of Representatives voted on decoupling in January but the vote stalled and the matter was held for a future legislative session.

State Representative Lindsey LaPointe (D-19) said the vote likely stalled because there was a lot of surrounding information for legislators to digest. She echoed other Democrats that the proposed budget isn’t perfect but it is a starting point.

“Making sure we’re maintaining those services that protect people on the brink is the moral thing to do,” LaPointe said. “The challenge will be to meet all of our obligations without overburdening taxpayers, especially after this pandemic year.”

Editor’s note: Several other Northwest Side legislators were contacted for the story but they did not respond.

Feeds,News,Region: Chicago,City: Chicago

via Nadig Newspapers – Northwest Side Local Newspapers

February 24, 2021 at 09:19AM

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