Gov. J.B. Pritzker on Tuesday signed a $46 billion budget package into law that promises to increase education spending, reinforce the state’s “rainy day” fund and put an extra dent in Illinois’ monstrous pension debt — all while sending $50 checks to millions of Illinoisans in a tough election year.
Republicans slammed the spending plan as an “insulting” effort to buy votes. Pritzker, taking a victory lap with fellow Democratic leaders during a news conference at Chicago State University, said it was the latest step in undoing years of devastating cuts implemented under GOP ex-Gov. Bruce Rauner.
“There’s more to be done to overcome the challenges of the pandemic recession, the fiscal mismanagement of the past and the rising prices caused by worldwide inflation,” Pritzker said. “But we’ve made tremendous progress.”
Education investments in the budget — which passed through Democratic supermajorities in the General Assembly earlier this month — amount to $12 billion, including a $350 million increase in evidence-based funding for K-12 schools.
The spending plan forecasts a rare-for-Illinois budget surplus of $444 million as the economy emerges from the COVID-19 pandemic. Democratic budget leaders are using that windfall to put $1 billion in the “rainy day fund,” the pool of money set aside for emergencies. It had pretty much run dry, catching the state flat-footed when the virus swept two years ago.
On top of that, almost $10 billion will go toward the state’s annual pension fund contribution, about $200 million more than required.
Those moves were made with an eye toward a potential credit upgrade from Wall Street ratings agencies, at least one of which has given an early thumbs-up to the Democratic spending package. A Fitch Ratings analyst previously said it “could support a return to the state’s pre-pandemic rating or higher.”
Democratic Illinois Comptroller Susana Mendoza said in a statement that the budget “sends a clear signal to the credit rating agencies that Illinois is budgeting responsibly and merits further upgrades.”
Pritzker said that “firm fiscal foundation” will come along with $1.8 billion in tax relief, most of it temporary, to address inflation.
The Democratic plan includes a one-year suspension of the state grocery tax, a six-month delay of a 2-cent-per-gallon increase in the gas tax; property tax rebates of up to $300 for many homeowners; and a permanent expansion of the Earned Income Tax Credit from 18% to 20%.
Additionally, Illinoisans who earn less than $200,000 per year will receive $50 checks, plus $100 per dependent. Lawmakers also scheduled a sales tax holiday on back-to-school items and many clothing items from Aug. 5-14.
Illinois Republican Party chairman Don Tracy branded those measures as “insulting temporary election-year gimmicks.”
“What Pritzker’s budget doesn’t do is give permanent tax relief to overtaxed Illinoisans, fully replenish the unemployment trust fund, or construct a path to budget stability for when the federal bailout cash runs out soon,” Tracy said in a statement.
“Pritzker approved a cynical budget that positions Democrats to push for tax hikes in the future and attempts to buy votes instead of providing financial stewardship and meaningful tax relief to working families.”
The governor dismissed GOP barbs of his good-news budget, saying Republicans “seem to prefer spelunking for misery over offering real solutions.”
The spending plan goes into effect July 1.
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April 19, 2022 at 02:31PM