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Pritzker signs $46.5 billion budget, $1.8 billion tax relief plan

Gov. JB Pritzker signs the Fiscal Year 2023 budget into law on April 19, 2022.
Gov. JB Pritzker signs the Fiscal Year 2023 budget into law on April 19, 2022.(Mike Miletich)
Published: Apr. 19, 2022 at 9:07 PM CDT
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SPRINGFIELD (WGEM) - Signed, sealed, and delivered over a month before the usual adjournment date, the Fiscal Year 2023 budget is law in Illinois.

Gov. JB Pritzker and Democratic lawmakers celebrated the $46.5 billion budget Tuesday morning at Chicago State University. Leaders from the majority party claim Illinois is in the strongest financial position in a generation.

While the spending plan makes significant investments in education, human services, and public safety, many will notice decisions made to address financial obligations. Democrats said their plan creates a $444 million surplus for general funds, which would be the second straight fiscal year with a budget surplus.

Their budget uses $2.7 billion in federal funds to pay off a chunk of the $4.5 billion of debt in the state’s unemployment insurance trust fund. It will also contribute $1 billion to the rainy day fund to help Illinois in any future emergencies. Democrats also put a combined $500 million toward pension obligations.

“These are just some of the kind of priorities that we can invest in when our state is governed responsibly, with a focus on working families and those who have, too often, been left out and left behind,” Pritzker said.

Many noted that the 2023 plan prioritizes children, families, and their communities. One of the key features is a $1.8 billion family tax relief package. It suspends the state’s 1% grocery tax for a year and freezes the gas tax for six months. The tax relief plan also provides $520 million for a one-time property tax rebate of up to $300 per household.

“We are slowly recovering from the most severe public health crisis that our state, country, and the world has seen in the last century,” said Sen. Michael Hastings (D-Tinley Park). “It is crucial that we prioritize families by providing them with much-needed, and deserved, relief to ensure Illinois’ economy keeps growing.”

Democrats included $685 million in tax rebate checks for individual filers making under $200,000 and joint filers making up to $400,000. Those checks will be $50 per person and $100 for up to three children per family.

“I’m very proud of that,” Pritzker said. “Hundreds of dollars will go back into people’s pockets that otherwise they wouldn’t have had as a result of our balancing this budget and maintaining a surplus.”

The tax relief plan also permanently expands the Illinois earned income tax credit from 18 percent to 20 percent of the federal EIC. That expansion creates first-time eligibility for low-income workers 18 to 24-years-old without children, adults 65 and older, and undocumented immigrants.

“After years of organizing, it’s official: Illinois’ tax system will no longer exclude immigrant and childless workers from tax relief,” said Amber Wilson, the statewide campaign manager at Economic Security for Illinois. “We applaud Governor Pritzker for signing into law an expansion of the Earned Income Credit that will benefit more than 4.5 million of our neighbors by putting more cash directly in their pockets.”

Although, Republicans argue most of the relief in this budget is nothing more than a campaign tool for Pritzker and the Democratic party as we inch closer to the 2022 election. Senate Republican Leader Dan McConchie called the plan “gimmicky gamesmanship” designed to help the Democratic rank and file members win re-election in November.

“It’s temporary tax relief, checks that show up right before the election and expire right afterward,” McConchie said. “And only in small bits, little bits, here and there. That’s why we found this so unfortunate as to really miss this opportunity to do some real good in this state.”

The budget invests $12 billion in PreK-12 and higher education, including $7.9 billion in evidence-based funding for schools. $598 million is set aside for early childhood education and $300 million was earmarked for Strengthen and Grow grants to help childcare providers across the state.

Democrats also included $601.5 million for MAP grants to help 24,000 more college students with a maximum award covering 50 percent of their tuition.

“The doors that will be opened, the opportunities created, demonstrate that we believe in every child in our state and we want them to know what’s possible for their future,” said Lt. Governor Juliana Stratton (D-Illinois).

This spending plan appropriates $8.8 billion for human services and $8.1 billion will go to health care services. The budget provides $240 million in tax relief for hospitals and hundreds of millions of dollars in additional grants for safety-net hospitals. Lawmakers also appropriated $180 million to expand and preserve the health care workforce in underserved and rural communities.

The budget prioritizes $230 million for community-based mental health care and substance use treatment providers. It also allocates $70 million for the 988 call center to properly respond to people experiencing mental health crises. The plan includes $8 million to distribute Naloxone to first responders helping reverse opioid overdose. $2 million is set aside for mobile treatment units and $3 million will go to a new Illinois State Police diversion program to provide mental health and substance use services for crime victims.

“We’re trying to lift up all families. We’re trying to lift up our businesses,” said House Majority Leader Greg Harris (D-Chicago). “We’re trying to grow our businesses and we’re trying to create more jobs. I’m just proud to be here with the folks who made it happen - who voted yes on the budget, who voted yes to move Illinois forward.”

Democrats also highlighted a $2.2 billion investment in public safety. That includes $1 billion for violence prevention, youth employment, and diversion programs. $240 million will help implement the Reimagine Public Safety Act and $30 million was allotted for local law enforcement body camera grants. Meanwhile, $10 million is set aside for local law enforcement retention efforts and a separate $10 million was earmarked for the co-responder pilot program to have mental health professionals alongside officers.

“That sound you hear is bills being paid. That sound you hear are investments being made,” said Sen. Elgie Sims (D-Chicago). “That you hear is hope again here in the state of Illinois.”

Although, Republican lawmakers argue Democrats shouldn’t celebrate a budget based on revenue from a massive federal bailout and inflation. Rep. Tom Demmer (R-Dixon) noted Democrats raised spending by 10 percent while the state’s true revenue has declined by five percent. Demmer said the plan is not responsible or sustainable as revenues continue to drop.

“Just a year and a half ago, Gov. Pritzker was spending millions to convince Illinois voters to approve his $3.5 billion tax hike—threatening them with draconian cuts or across-the-board tax hikes if they didn’t approve. His tax hike was rejected by the voters, but the Governor continues to spend as if voters said yes,” Demmer said.

Still, the state’s top financial officer said this is the state’s most responsible budget a governor of either party has signed in decades. Comptroller Susana Mendoza (D-Illinois) said this is the result of hard work from the General Assembly and her office, paying down the state’s unpaid bills. She also appreciated lawmakers keeping some money aside for potential problems in the future.

“We paid the state’s old bill backlog down from $16.7 billion to $3 billion last year before a penny of the federal stimulus money landed in state coffers,” Mendoza said. “The state’s two credit upgrades likewise happened before the federal stimulus got here last year. This budget sends a clear signal to the credit rating agencies that Illinois is budgeting responsibly and merits further upgrades.”

The Fiscal Year 2023 budget takes effect on July 1.

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