SPRINGFIELD — At first blush, it could have been mistaken as an April Fools’ Day joke.
Democrats in the Illinois Senate unveiled their $1.8 billion tax relief plan, which included a proposed one-time refund of at least $100 for individual filers making up to $250,000 per year and joint filers making up to $500,00 per year, at a press conference just before 5 p.m. Friday, April 1.
“This is possible because, as a state, we’ve made responsible decisions to balance budgets,” said state Sen. Scott Bennett, D-Champaign. “We’ve paid our bills, we’ve seen our credit rating improve and now we find the state with a sizable surplus. We need to pay that forward by fighting inflation and sending it back to our taxpayers.”
It was peculiar timing to announce a significant tax relief proposal — firmly within the “Friday news dump” timeframe in which politicians typically share unpleasant news hoping that it will be forgotten by Monday.
In fact, it in some ways laid the groundwork for the final week of the spring legislative session in Springfield, where Democrats in the House and Senate publicly laid down their markers for proposed tax relief and measures to address rising crime ahead of what’s expected to be a difficult election in November.
After showing their cards, lawmakers negotiated — navigating election year politics on their way to approving a spending plan for fiscal year 2023 with $1.83 billion in tax relief included along with nearly a dozen proposals to address public safety, including a crackdown on carjackings and organized retail crime.
This is how the week leading up to the legislature’s April 8 adjournment played out:
A short session
This year’s spring legislative session was unique in how short it was.
Due to delays in the delivery of redistricting data last year, lawmakers had to move the state’s March primary election to June 28. Not wishing to be in Springfield just weeks before an election, legislative leaders opted for an abbreviated session instead of the typical May 31 adjournment.
This also happened in part because there simply was not as much for lawmakers to accomplish this year after an extremely active 2021 session that saw them tackle redistricting, landmark climate/clean energy legislation, the distribution of COVID-19 relief and ethics reform.
It is not uncommon for lawmakers to work through the weekends toward the end of session. This year, session days were scheduled for every day between March 28 and April 8.
But, signaling that they could fit everything into a tighter window, the Illinois Senate canceled both its session days last weekend. The House canceled Saturday, opting to return Sunday afternoon.
The House gaveled in around 4:30 p.m. last Sunday.
After adopting a handful of resolutions, including one declaring the week of May 15 as Historic Preservation Week for Decatur, the House adjourned after about 24 minutes.
Early week
Lawmakers eased into the week, not gaveling in until mid-afternoon on Monday.
Senate Democrats left the previous weekend having laid down their marker in budget negotiations. Along with their proposal for direct payments to taxpayers, the caucus proposed a six-month freeze in the state’s grocery and motor fuel taxes and a property tax rebate of up to $300.
Those measures were versions of what Gov. J.B. Pritzker had in his proposed fiscal year 2023 budget, which included one-year freezes of the gas and grocery taxes.
Building off that plan further, the Senate proposed a permanent increase in the state’s Earned Income Tax Credit, which is intended to give tax relief to middle- and lower-income people.
It all seemed to confirm one thing: that in an election year where inflationary pressures are hitting people hard and the state coffers are unusually flush with cash, the only real question on tax relief was “how much?”
Budget negotiations would continue behind the scenes on Monday. But moving to the front burner was the other major issue facing lawmakers: public safety.
Since the beginning of the pandemic in 2020, crime has spiked across the nation, and Illinois is no exception. Chicago saw its number of murders and shootings rise to levels not seen since the 1990s, while several downstate cities, such as Decatur, Champaign and Peoria, also saw unprecedented levels of violence.
Though the rise seems to be part of a national crime wave, Illinois Republicans have blamed the passage of policies they deem “anti-law enforcement” for emboldening criminals and encouraging police officers to leave the profession in droves.
The most prominent criminal justice reform measure the Democrats passed in 2021 was the “SAFE-T Act,” which among other things made Illinois the first state in the nation to abolish cash bail while mandating that all police officers wear body cameras by 2025.
The law also mandates that officers render aid to the injured, intervene when a fellow officer is using excessive force and place limits in use of force. It also offers stricter guidelines for the decertification of officers and would allow people to file anonymous complaints of police misconduct.
Most of its provisions have yet to take effect, but it has been a piñata that Republicans have hit repeatedly since its passage, hoping to bludgeon Democrats at the polls.
And most polling indicates that Democrats are in trouble, with public safety being a top issue for voters.
This has moved the party, which holds supermajorities in both legislative chambers, into a defensive posture and galvanized them to address the topic.
Democrats unveiled a buffet of proposals to address public safety, ranging from community-based initiatives to measures meant to support law enforcement officers.
All agreed that the topic needed to be addressed, but the rollout signaled perhaps a divide, stylistically at least, on how to reduce crime.
On April 1, liberal lawmakers unveiled a package of bills, including one that would establish a co-responder pilot program at police departments in East St. Louis, Peoria, Springfield and Waukegan. These units would coordinate social services with violence survivors.
Another would create a Crime Reduction Task Force, a statewide anonymous tip hotline and boost the state’s witness protection program.
“We have to give law enforcement, but we also have to give communities the actual tools for solving crime,” said state Rep. Jehan Gordon-Booth, D-Peoria.
“We all know that violence is a public health crisis that we have to be smart and tough on. … That is the balance that we are looking to strike,” she added.
State Sen. Robert Peters, D-Chicago, was more blunt.
“I had another shooting on my block a couple of weeks ago,” Peters said. “People are sick and tired of the failed status quo. They are sick and tired of, excuse my language, this bulls–t and I am sick and tired of it, too. Our communities need to be heard. Our leaders must be brave.”
By contrast, another group of Democrats, mostly moderates hailing from areas with significant law enforcement constituencies, unveiled what they dubbed their “pro-law enforcement” package.
The package included measures to recruit and retain police officers, adjust body camera requirements and funding, fund mental health services for first responders and create a grant program for childcare centers to provide after-hours and nightly child care for the children of first responders and other workers working late shifts.
However, the group steered away from proposing any new penalty enhancements for those who commit crimes, a third rail in Democratic politics.
“The old way doesn’t work,” said state Rep. Dave Vella, D-Rockford. “The old way that the people on the other side of the aisle are throwing out doesn’t work.”
But lawmakers weren’t done introducing legislation to address crime. On Tuesday, a pair of bills to address carjackings, a significant problem statewide but especially in Chicago, were unveiled.
One would allow for the creation of “Metropolitan Enforcement Groups,” or cooperatives of law enforcement, to work together to target carjacking. These groups would be eligible for grants to assist in enforcement.
Another would help shield carjacking victims from the fines incurred from red light or speed camera violations after the vehicle has been hijacked.
“Both sides are looking for an answer for this problem,” said Cook County Sheriff Tom Dart, speaking of the House and Senate. “They both specifically targeted this issue. And there’s a need to get something concrete done.”
Dart came down to the Capitol on Wednesday to tout legislation, sponsored by state Rep. Marty Moylan, D-Des Plaines, that would require automakers to set up a 24-hour hotline that law enforcement can use to track stolen vehicles.
In an interview with Lee Enterprises on Friday, Dart said he wanted to get his legislation, which will not see a vote before the end of session, “in the hopper” since it’s a relevant topic.
Dart, long a proponent of criminal justice reform, said he believes technology and enforcement will help solve crime versus additional penalty enhancements being pushed by Republicans and some more moderate Democrats.
“I just don’t see that as being the way we’re going to get out of this,” Dart said. “I just don’t see that. Now, somebody putting a gun to their head and having their car taken, does that deserve a serious penalty? Oh, God, yes, it does.”
“What will deter them is if we’re catching these people within hours,” Dart said. “I mean, it will stop because it’s not working anymore. I mean, they’re very, very pragmatic people.”
By midday Friday, at least 10 crime-related measures had cleared either the House or the Senate.
And a deal finally came together to address organized retail crime.
Under the legislation, championed by Attorney General Kwame Raoul and the Illinois Retail Merchants Association, jurisdiction would be given to any state’s attorney in a county where any element of the organized retail crime took place so that he or she can prosecute the whole crime.
This means if a ring of smash-and-grab thefts stretches across different counties, prosecutors could consolidate charges into one county for all the incidents.
The bill passed both the Senate and House in the waning hours of session.
A budget breakthrough
Late Tuesday night, the House Democrats met for a lengthy caucus. The topic? The budget.
In a surprise move, a $45.7 billion budget proposal was dropped late that night, three days before adjournment. That was unheard of in recent years, when budgets have been routinely released the same day they are passed. This typically occurs on the final day of session.
But much in the way the Senate Democrats laid down their marker on Friday, the House Democrats laid out their priorities as well, including election-year tax relief.
They included the governor’s proposals in addition to pushing for the permanent expansion of the Earned Income Tax Credit. The price tag on the tax cuts was about $1.4 billion.
“For House Democrats, this budget is about turning the corner for our state and turning the corner for our families, as we see our state and our nation turning the corner on COVID,” said state Rep. Greg Harris, the lead budget negotiator for House Democrats, at a Wednesday morning press conference.
With both Democratic caucuses — Republicans were excluded from budget talks — laying out their priorities, the stakeholders could begin serious discussions.
Senate President Don Harmon, D-Oak Park, and House Speaker Chris Welch, D-Hillside, had a “very good meeting” with all signs pointing “toward progress” Wednesday evening, said Harmon spokesman John Patterson on Wednesday.
And just over 24 hours later, Pritzker, Harmon and Welch stood together outside the governor’s office on the second floor of the Capitol to announce they had hammered out an agreement on a $46.5 billion spending plan.
The tax relief top line in the agreement was $1.83 billion, near the Senate’s initial number. The proposal is combination of the three — taking the Senate Democrats’ direct checks plan, though cutting it to $50 per individual instead of $100 and including $100 per child up to three children.
The grocery tax would be suspended for a full year while the gas tax would freeze for six months, basically until just after the November election.
It would also permanently expand the Earned Income Tax Credit from 18% to 20%. There would also be a sales tax holiday on school supplies this August.
The budget puts an additional $1 billion toward the state’s rainy day fund and $200 million extra toward the state’s chronically-underfunded pension system.
Pritzker praised Harmon and Welch for “being true partners in hammering out a responsible, compassionate budget.”
“Over the last few weeks and especially over the last 48 hours, we engaged in a true give-and-take which led to genuine compromise,” Pritzker said.
After the framework was laid out, budget staffers spent Friday putting together language based on the agreement. It took some time.
The budget did not receive a vote in the Senate until about 1:30 a.m. Saturday morning. After handling some other business, the Senate adjourned at 3:22 a.m.
The budget was then sent over to the House, where it passed at 5:51 a.m. Saturday. The House would adjourn a couple of minutes later, likely not to return until after the November election.
At a 10 a.m. press conference in Pritzker’s office Saturday morning, legislative leaders took a victory lap before taking a nap and heading home.
“I’m proud of what we all came together to do here this week — this shortened session,” Welch said. “I’m proud of what we’ve done, I’m proud of what we stand for and I’m proud to go home and tell my constituents what we did for them.”
Taylor Vidmar contributed to this report.
9 things to know about Pritzker budget plan
Pension contributions
Illinois’ largest general revenue fund expenses continue to be K-12 education and pensions. The latter will make up 20.7 percent of the proposed general revenue spending in the upcoming budget, or about $9.6 billion.
The governor has proposed adding another $500 million to the pension payment beyond what is required by law in fiscal years 2022 and 2023.
That’s notable, because previous governors have been widely criticized for shortchanging the pension system – something Pritzker proposed, then quickly abandoned, in his first year in office. Critics often point out that the state law governing pension payments already shortchanges the system from what accountants suggest should be paid into it.
The governor proposed spending $300 million of the surplus from the current fiscal year to pay down pensions, with $200 million added to the statutory payment in the upcoming budget.
The governor’s office estimated the $500 million increase beyond statutory amounts would reduce unfunded liabilities – which sit at about $130 billion – by about $1.8 billion. A pension buyout program previously approved by the General Assembly has reduced that liability by about $1.4 billion, according to the governor’s office.
Higher education
The governor proposed spending $2.2 billion on higher education, a $208 million increase from the current year. That includes a $122 million increase to Monetary Award Program grants to help students demonstrating a financial need attend college.
Universities and community colleges would see their budgets increased 5 percent, or $68 million, while adult education programs would see $2.5 million in new funding and funding would increase for minority teacher scholarships by $2.3 million
Through College Illinois, a state-run prepaid tuition plan that is no longer open for enrollment, the state has about $230 million in obligations that the fund cannot currently meet. Pritzker proposed spending $230 million in general revenue funds to pay down that remaining balance, and his team estimated the long-run savings at about $75 million
K-12 Education
Approximately 21 percent of the budget is dedicated to Pre-K-12 education, an increase of $498 million from one year ago.
That includes $350 million for the evidence-based funding formula for K-12 schools, which prioritizes new money toward the schools furthest from their “adequacy” target, which takes into account class sizes, a local district’s property values and other factors.
The budget asks for another $54.4 million to provide early childhood education services to another 7,100 children, and another $96 million in transportation and special education grants for schools.
Another $12 million would be added to the Regional Offices of Education budget to address truancy and chronic absenteeism, and agriculture education funding would increase by $2 million.
Temporary tax relief
The governor cited rising inflation as the basis for creating about $1 billion in temporary tax relief for motor fuel, groceries and property taxes.
The motor fuel tax relief would not lower gas prices, but it would prevent an annual increase to the motor fuel tax that is written into law from taking effect this year. It prevents a hike of 2.2 cents per gallon of gas, according to the governor’s office – a taxpayer savings it pegged at $135 million.
Motor fuel tax money does not go to the general revenue fund, but rather to road construction projects. The tax holiday does not appear to affect a proposed $46.5 billion capital infrastructure budget, which is mostly an extension of the 2019 Rebuild Illinois plan.
The governor also proposed rolling back a 1 percent state grocery tax for the fiscal year, a taxpayer savings pegged at $360 million. The state would reimburse local governments for the effect of the tax holiday.
Illinoisans currently eligible for a 5 percent property tax credit under current law – that is, joint filers earning below $500,000 and single filers earning below $250,000 – would be eligible for another 5 percent property tax credit under the proposal, up to $300. The taxpayer savings is estimated at $475 million.
Rainy day fund
Illinois’ “rainy day fund” at its height contained only about $300 million since its 2001 creation, but that was spent down to almost nothing during a budget impasse under Republican former Gov. Bruce Rauner and Democratic leaders in the General Assembly.
Pritzker’s budget proposes adding $600 million to the fund with a supplemental budget from the current fiscal year, while dedicating $279 million to the fund in FY2023 to bring the balance up to $879 million.
The governor also proposed dedicating $898 million to pay down overdue health insurance bills.
Safety net
The beleaguered Department of Children and Family Services would see a funding increase of $250 million, or 16 percent, to about $1.3 billion from general revenue funds. That includes rate reforms for private sector providers in an effort to address staffing shortages, totaling $87.1 million.
The budget also provides $15.5 million to hire an additional 360 employees to address growing caseloads, improve caseload ratios and continue operations in licensing, monitoring and clinical services.
Funding for nursing homes would increase by $500 million, with lawmakers expected to take up rate reforms and a new provider assessment designed to maximize federal dollars, encourage improvement of care and staffing ratios.
Unemployment trust fund
As of Feb. 1, Illinois owed the federal government more than $4.5 billion for advances received to keep its unemployment insurance trust fund afloat during the height of the COVID-19 pandemic. By Sept. 30, Illinois will owe almost $32 million in interest on that borrowing.
If the state doesn’t take action to pay down the deficit, it could lead to massive unemployment insurance rate hikes on businesses and cuts to benefits for those claiming unemployment.
The budget does not include any money to pay down the borrowing, but the governor’s office said it remains in negotiations with lawmakers and representatives of labor and businesses on a solution. There’s serious consideration of using much of about $3.5 billion in remaining federal American Rescue Plan Act funding to pay down the deficit, according to the governor’s office.
Public safety
Pritzker noted his budget includes an $18.6 million increase to allow for three classes of Illinois State Police cadets. Another $5.4 million will go to opening a new forensic laboratory in Decatur in August.
The budget also includes $4.5 million to fund body cameras for ISP in accordance with a criminal justice reform bill passed one year ago, as well as providing the Illinois Law Enforcement Training and Standards Board with $10 million for distributing grants to local law enforcement for body cameras.
The Department of Human Services budget includes $240 million as part of a two-year, $250 million commitment to the Reimagine Public Safety Act, which aims at investing violence prevention resources in some of the state’s most dangerous areas. Just $5 million of that comes from the general revenue fund, with $235 million funded through the American Rescue Plan Act.
Revenues
The budget does not call for raising taxes to create any new revenues.
The state does expect a 4 percent increase in income tax receipts at $22.4 billion. Corporate income taxes are expected to decline 5.4 percent to $4.4 billion, with sales tax decreasing 1.3 percent to $9.9 billion and other sources netting $3.1 billion.
The lottery is expected to bring in $754 million, legalized gambling $157 million, and adult-use marijuana $142 million. Federal sources account for just over $4 billion.
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April 9, 2022 at 01:38PM
