Metro-East News

Pritzker unveils ‘bridge budget’ that relies on new revenue, calls for graduated income tax

Local legislators react to Pritzker budget address

Metro-east legislators react to Gov. J.B. Pritzker’s budget address which called for new revenues and increased education spending.
Up Next
Metro-east legislators react to Gov. J.B. Pritzker’s budget address which called for new revenues and increased education spending.

In a proposal his staff called a bridge budget until a graduated income tax can be put into place, Gov. J.B. Pritzker gave his proposal for the 2020 fiscal year spending plan, which counts on new revenues from taxing plastic bags, sports betting and legalized marijuana, among other things.

Pritker on Wednesday delivered his first budget address to the General Assembly, discussing what it would take to close a $3.2 billion deficit in the upcoming fiscal year, which begins July 1, while also increasing education spending and putting more money into the Illinois State Police.

More than half of the proposal is obligated toward paying off debt, pensions, court-ordered obligations or federally protected programs.

Pritzker again called for a graduated income tax.

“To get to fiscal stability and eliminate our structural deficit, there’s no quick fix. It took decades to get us into this mess. It will take at least several years to get us out of it,” the governor said.

Other new revenue ideas included changing the structure in how video gaming is taxed; a tax on e-cigarettes; increased taxes on cigarettes, and a new tax of 5 cents per plastic bag. New revenues would bring in an estimated $1.1 billion.

He also called for a tax on insurance companies, specifically a managed care organization assessment to help cover the costs of the state’s Medicaid program.

During a background briefing after the address, where staff members asked not to quoted directly, Deputy Gov. Dan Hynes called it a “bridge budget.”

The governor’s office also said the budget is balanced.

However, if the new revenues aren’t approved, there would need to be cuts of 4 percent, the governor’s office said.

When it comes to the state’s unfunded pension liability, the Pritzker administration plans to borrow money and extend legally obligated payments, among other things.

The budget proposal includes extending out the deadline for when pensions need to be 90 percent funded from 2045 to 2052. Pritzker also said revenues from implementing a graduated income tax would help pay pensions, too.

During the speech, Pritzker made a point of mentioning downstate Illinois.

“I want downstate Republicans and Democrats to work together with me on a Downstate Revitalization Plan to encourage the creation of new businesses and jobs and foster the growth of existing ones in struggling communities so they can thrive,” Pritzker said.

Local legislators react to budget plan

Pritzker’s budget includes increased spending on public universities and community colleges, which was one a campaign promise of his last year. There also will be an increase in tuition grants for low-income students.

Southern Illinois University in Edwardsville and other area public schools have been decimated for too long, and stability must be brought back into our classrooms to invest in our state’s economic growth,” said State Sen. Rachelle Aud Crowe, D-Glen Carbon. “I appreciate his effort and for sharing my main priority.”

State Sen. Chris Belt, D-Cahokia was supportive of the education funding proposals.

“I think investing in kids investing in students, you can never go wrong with that. Keeping our best and our brightest home, blocking the borders off, sort of speak, you can’t go wrong with that,” Belt said. “If you’re ever going to invest, I think invest in human capital, invest in our kids, I’m pretty pleased with what he was saying there.”

Pritzker is hoping to avoid a budget impasse, as there was under former Republican Gov. Bruce Rauner. Pritzker will probably have an easier time getting his priorities through as his Democratic Party has a supermajority in both houses.

The governor said there could be money that come from sports betting licenses, but whether those are just at casinos or would allow racetracks has yet to be decided, Hynes said.

The spending plan includes two new classes of 100 cadets each for the Illinois State Police to help increase ranks within the agency, a proposal welcomed by Illinois State Police Acting Director Brendan Kelly, the former St. Clair County state’s attorney.

“This is good news and the right direction!” Kelly said on Twitter after the speech.

State Rep. Charlie Meier, R-Okawville, expressed disappointment in the governor’s spending plan.

“It’s a budget that’s using a lot of revenue that’s not guaranteed, new programs that they’re trying to pass and start are included in there. It’s pushing the pension debt further down the road,” Meier said. “We’re borrowing against our pensions and using it to pay state bills instead of making payments on the pension that we’re required to make.”

Meier said the spending proposal isn’t balanced, saying it counts on revenues on marijuana legalization and sports betting, both of which still need to be passed by the General Assembly and signed by the governor.

“It’s a bunch of smoke and guns again, this (budget) is not balanced, they can show that it is, but it’s on things that aren’t passed yet,” Meier said.

State Sen Paul Schimpf, R-Waterloo, said that nothing is set in stone with Pritzker’s proposal.

“While I appreciate the governor’s stated commitment to provide funding for schools, universities, and infrastructure projects, much of his plan seems to rely on many of the same budgetary gimmicks that got us into the dire financial circumstances that we are in today,” Schimpf said.

“I believe Illinois needs to live within its means, and practice responsible budgeting. We should be looking to trim expenses to match revenue instead of missing pension payments and raising taxes. ... I am hopeful that negotiations can lead us to a responsible, fair, balanced budget, if all sides are at the table.”

State Rep. Katie Stuart, D-Edwardsville, said paying down the bill backlog is a top priority for her.

“Paying down the backlog of unpaid bills is one of my top priorities to get our financial house in order, but I believe we must do so by asking millionaires and billionaires to pay their fair share and responsibly controlling state spending, not by increasing taxes on those who are already struggling to make ends meet,” Stuart said.

State Rep. Jay Hoffman, D-Swansea, who is in House leadership, said Pritzker’s plan helps move the state forward.

“In the days and weeks ahead, it will be crucial for us to identify areas of excessive spending to reduce the debt burden. We need to prioritize the state’s financial needs above partisanship in order to overcome budgetary shortfalls,” Hoffman said.

State Rep. LaToya Greenwood, D-East St. Louis, said the last four years had been tumultous for Illinois.

“We need to rein in excessive spending and carefully account for revenues to get our finances back under control,” Greenwood said. “Moving the state forward is going to require good faith negotiations and cooperation from Democrats and Republicans, and I am prepared to engage with both sides to develop a path forward.

Joseph Bustos: 618-239-2451, @JoeBReporter
Joseph Bustos is the state affairs and politics reporter for the Belleville News-Democrat, where he strives to hold elected officials accountable and provide context to decisions they make. He has won multiple awards from the Illinois Press Association for coverage of sales tax referenda.
Joseph Bustos is the state affairs and politics reporter for the Belleville News-Democrat, where he strives to hold elected officials accountable and provide context to decisions they make. He has won multiple awards from the Illinois Press Association for coverage of sales tax referenda.
  Comments