Illinois Democratic leaders discuss budget negotiations, paying off federal borrowing

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SPRINGFIELD, Ill. – Budget negotiations continue behind the scenes as Illinois lawmakers get closer to the last week of session. Budget working groups are trying to find the best option to fill the $1.3 billion hole in the plan.

The big dilemma is whether lawmakers want to fill that hole with revenue or cuts from state agencies. Appropriations committees have spent late nights analyzing each tax incentive the state has in place that Gov. JB Pritzker calls “tax loopholes.”

Pritzker hopes to save nearly $1 billion by capping the discount for retailers collecting sales tax and lowering the tax credit for donations to private school scholarships. Those are only two of the controversial tax breaks up for debate. Republicans won’t support that idea since the governor agreed to several of those ideas in 2019.

However, House Majority Leader Greg Harris (D-Chicago) says the alternative is worse.

“Education will be cut, colleges and universities will be cut,” Harris said Thursday. “Severe cuts to our human services, it’s a very bad scenario.”

Meanwhile, legislative leaders continue to review paperwork and regulations on how states can use the American Rescue Plan funds. They initially hoped to use some of the money to pay off borrowing from the federal government. However, the current rules don’t allow it.

Paying off debt

House leaders worked with Pritzker, the Senate, and Comptroller before agreeing to repay roughly $2 billion using state resources instead. Leaders originally planned to repay the debt over three installments by December 2023. Now, Mendoza will use the recent revenue boost and cash management to pay off the debt within Fiscal Year 2022.

“Since taking office in the middle of a financial crisis, followed by the COVID-19 crisis, I’ve championed the need to be fiscally responsible and pay down our debts while prioritizing vulnerable populations,” Mendoza said.

Pritzker says paying off the debt is an essential step for Illinois to remain on sound fiscal footing.

“The General Assembly has been a critical partner in utilizing the federal dollars to help the most vulnerable get through the pandemic,” said Pritzker. “I also credit the Comptroller in strategically managing cash flow in these trying times.”

Resilience of Illinois

House Speaker Chris Welch says lawmakers will work with Pritzker to create a plan to address disparities with the ARPA funds. Welch hopes to prioritize funding for high-quality affordable housing, mental health and substance abuse services, and upgrades for safety-net hospitals.

“The financial health of our state is incredibly important,” Welch added. “I am grateful for Leader Greg Harris and our budget negotiators for all of their hard work in ensuring our debt is paid off early.”

Senate President Don Harmon said the federal loan was a critical lifeline to keep the state and economy afloat.

“That our economy has rebounded so strongly that we can now pay it off early is a testament to the resilience of the people and businesses of the great state of Illinois,” Harmon explained.

Illinois should receive over $26 billion through the American Rescue Plan. The state can use $8.1 billion of that allotment through Fiscal Year 2024 to help respond to the pandemic and invest in water, sewer, and broadband infrastructure.

News,Region: Peoria,City: Peoria,Central

via HOIABC

May 20, 2021 at 07:27PM

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