CHICAGO (AP) — Gov. J.B. Pritzker signed a $42 billion spending plan for Illinois on Thursday that includes $2.5 billion in spending from a multiyear federal relief package.
“Illinois has taken a giant step forward toward true fiscal stability,” Pritzker said during a celebratory news conference Thursday, a day after legislators approved a correction on effective dates in the plan that he deemed were “inadvertent.”
However, Republican leaders deemed the error as a clear example of problems with last-minute budgeting in Illinois and have asked for more transparency in the process.
The budget came together after Pritzker issued dire predictions for coming fiscal pain last fall. Voters soundly rejected his proposed constitutional amendment to scrap the state’s flat-rate income tax in favor of a graduated system that took a greater chunk from wealthier residents.
He framed it as a “fair tax” that meant that 97% of Illinoisans — those making less than $250,000 — would pay less or the same amount in taxes while generating $3 billion extra per year from more affluent taxpayers. Conservatives panned the plan as a money grab by tax-and-spend liberals.
Pritzker unveiled in February his fiscal outline for the budget year that begins July 1 with a $2.6 billion deficit. But tax revenues, battered for a year by the COVID-19 pandemic, rebounded much more quickly than expected and by late last month, lawmakers found the hole they needed to fill had shrunk to about $1 billion.
Pritzker closed the bulk of that gap by reversing three business tax-incentive programs worth $636 million per year. They were among eight programs that were part of negotiations with minority Republicans in 2019 over Pritzker’s $45 billion infrastructure plan. He touted the programs then but this year called them unaffordable tax loopholes, angering GOP lawmakers who contended he was reneging on his deal.
But the improved revenue also allowed him to reinstate a $350 million boost to K-12 education that was deemed an annual necessity when the General Assembly overhauled the school funding law in 2017. The ugly financial picture brought on by the pandemic in 2020 forced officials to skip the payment last year and Pritzker had proposed skipping it again this year.
That brings public-school funding to $9.2 billion. There is $7.4 billion for human services, $1.9 billion each for higher education and public safety, and $1.4 billion for other state operations.
While the American Rescue Plan Act approved by Congress set aside $8 billion for Illinois, the budget spends only a portion of the multiyear package. Construction projects — reserved only for Democrats, who hold supermajorities in both houses of the General Assembly — will be $1 billion of the money to give a boost to the long-term Rebuild Illinois construction program, whose revenue sources lagged because of COVID-19.
Another $1.5 billion has been reserved for helping the tourism and hospitality industries recover and for one-time infusions of money for programs to help the homeless, prevent suicide, counsel schoolchildren through the last year’s trauma, and provide assistance to front-line health care and other workers worn down by battling COVID-19.
While Pritzker also proposed cutting local governments’ share of state income tax revenue, the total was restored, and there’s money for a $9.4 billion payment to the state’s woefully underfunded pensions programs.
By SOPHIA TAREEN and JOHN O’CONNOR