SPRINGFIELD – Illinois lawmakers worked until the early hours of Saturday to pass a $46.5 billion spending plan for the upcoming fiscal year, as well as a $1.8 billion package of mostly temporary tax cuts that Democrats said are intended to soften the impact of inflation on working families.
The final proposals surfaced around 9 p.m. Friday, the same time the bills were being discussed by the Senate Executive Committee. Republicans took issue with the late filing of the more than 4,700 pages of legislation outlining spending and tax policy for the upcoming fiscal year that begins July 1.
“Everybody in this room knows it’s damn near impossible to know what’s actually happening here without a bill being filed,” Sen. Chapin Rose, R-Mahomet, said at the hearing that concluded after 10 p.m. “How do you possibly begin to ask questions about something that doesn’t yet exist?”
Democrats didn’t directly answer, but the numbers discussed at the evening hearing and later in floor debate were generally the same ones announced by Gov. J.B. Pritzker and Democratic leaders in the General Assembly during a Thursday afternoon news conference.
“This budget funds education, health care, public safety, it funds our pension liabilities, and it continues investing in our priorities,” Sen. Elgie Sims, D-Chicago, said during floor debate Saturday morning.
Lengthy negotiations between the governor and the leaders occurred throughout the week. A House proposal containing a budget framework was introduced Tuesday night and brought to a House committee Wednesday. But it was not the package that passed by the time lawmakers adjourned.
After 3 a.m. Saturday in the Senate and 5:30 a.m. in the House, lawmakers approved HB 900 appropriating funding, HB 4700 as what is called the budget implementation bill and SB 157 laying out the tax relief proposal and revenue-related measures.
Tax relief plan
Sen. Michael Hastings, D-Frankfort, in the Senate Executive Committee hailed the tax relief package as “probably one of the largest savings to taxpayers that we’ve seen in the last decade.”
All but a handful of Republicans voted for the measure, but the GOP criticized it for consisting of mostly temporary tax relief.
The package includes $50 checks sent to Illinoisans earning less than $200,000 annually for single filers and $100 checks for those filing jointly and earning less than $400,000. Families will also receive $100 per dependent up to three.
It permanently expands the earned income tax credit to 20 percent of the federal credit, up from 18 percent, at a cost of roughly $100 million per year. It also extends EITC eligibility to non-citizens who have an individual taxpayer identification number rather than a Social Security number.
It also calls for doubling the property tax rebate to qualifying homeowners, up to $300 per household, suspending a 2-3 cent motor fuel tax increase for six months and suspending a 1 percent grocery tax for a year.
The motor fuel tax is the main funding source for road construction projects, so revenues lost from it would be replaced from other state funds.
The budget will also suspend the sales tax on back-to-school items and qualifying clothing items for a 10-day period, Aug. 5 to 14.
The portion of the state’s income tax going to local governments will increase from 6.06% to 6.16%.
Sims said the budget also includes an increase of $80 million in the Criminal Justice Information Authority, $90 million to fund three state police cadet classes to provide an additional 300 state troopers, $33 million for a law enforcement camera grant program and $10 million for a newly created law enforcement officer recruitment retention pilot program.
The budget also directs an investment of $235 million in federal American Rescue Plan Act funding to the Reimagine Public Safety Act aimed at early crime intervention.
It directs $1 billion to the state’s “rainy day” fund, which had been spent down to essentially nothing during a two-year budget impasse between Republican former Gov. Bruce Rauner and legislative Democrats. Another $929 million was dedicated to paying back interfund borrowing.
The stronger-than-expected revenue performance created a surplus for the current year and led to increased projections for the upcoming fiscal year that begins July 1.
That was due in part to pandemic-triggered shifts in consumer behaviors that led to more spending on taxable goods than services that are not taxed in the state, increased federal unemployment benefits that are taxed at the state level and increased tax revenue due to higher-priced consumer goods relating to inflation.
Those and other factors led to higher performance of sales tax and both personal and corporate income tax revenues, according to a presentation last month from the Illinois Department of Revenue.
Previous debt relief
That plan includes $1.4 billion to pay down state debts and allocates $2.7 billion in federal funds to partially pay down a $4.5 billion hole in the Unemployment Insurance Trust Fund.
The budget approved Friday adds another $200 million to the pension fund beyond statutory requirements, bringing the total added investment this session up to $500 million.
Still, the proposal left an unaddressed $1.8 billion hole in the Unemployment Trust Fund, and lawmakers did not take major action to address it. They did, however, push back major insurance premium hikes on employers and benefit cuts to people collecting unemployment until January to allow more time for negotiation.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government that is distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
via Chicago Sun-Times
April 9, 2022 at 01:31PM