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No tax hike in slimmer Illinois budget, reliance on fed aid

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SPRINGFIELD, Ill. (AP) — Democratic Gov. J.B. Pritzker on Wednesday presented a slimmer state budget with no income tax increases.

But the budget relies on federal relief from the COVD-19 pandemic, transfers from other funds and elimination of hundreds of millions of dollars of corporate tax breaks needing legislative approval.

"I admit, I wish the last year had been about all the normal problems of government – lowering taxes and fixing roads and making college more affordable – instead of once-in-a-lifetime problems like hunting for N95 masks, and building covid testing from scratch, and constructing a fair and science-based strategy for mitigating a new and deadly disease. This budget proposal reflects that struggle," said Gov. Pritzker. 

The $41.6 billion operating budget for the fiscal year that begins July 1 is a 4.2% decrease from its predecessor.

The proposal is a far cry from the dire predictions doled out last fall by members of the administration who were campaigning for Pritzker’s top priority, a graduated income tax that hit the wealthy harder.

Illinois Republican Party Chairman Don Tracy released the following statement in response to Governor Pritzker’s Budget Address:

“Spurned by the progressive tax defeat last November, Governor Pritzker is taking his anger out on the people of Illinois with his latest budget proposal. Despite a global pandemic that has forced families and businesses to cut costs to survive, Pritzker’s plan, riddled with accounting gimmicks, spends the same record amount as last year at the same time cutting funding for public schools, eliminating scholarships for poor children, and hiking taxes on small businesses. Other than front-line healthcare workers, no one has sacrificed more during the pandemic than small business owners and our school-age children. This budget hits them the hardest. It’s quite simple - Pritzker is a sore loser who has proposed a truly nasty budget.”

Illinois State Comptroller Susana A. Mendoza released the following statement regarding the governor’s proposed budget for fiscal year 2022: 

“Today, the governor presented a cautious but morally responsible plan that recognizes the predicament Illinois finds itself in at this time, without seeking to balance the budget on the backs of working families. I’m pleased he’s prioritizing health care and human services, because they are vital to helping people survive the ongoing COVID-19 pandemic. The last thing we need right now is to shred our social safety net again to save money. And I’m happy he is keeping his focus on prioritizing repayment of our COVID-related debt. I am optimistic Illinois will get the federal help we so desperately need. As we all know, nearly every dollar coming into Illinois is already spoken for. I hope lawmakers will remember this as they begin budget discussions and work together to pass a responsible budget for the state.” 

Following Governor Pritzker’s budget address, Illinois Federation of Teachers President Dan Montgomery released this response.

“We remain hopeful that Governor Pritzker will increase funding for schools in FY22 if revenue projections continue to improve and that he will fully fund EBF and higher education in future years. The IFT will continue to advocate for additional sources of state revenue and increased funding for schools, colleges, and universities."

Illinois Chamber President and CEO Todd Maisch released the following statement on Governor Pritzker's Budget Address.

"The Illinois Chamber is opposed to the massive tax increase proposed by the Governor’s budget plan under the guise of "closing corporate loopholes." We understand that the state has fiscal problems to address, however, the Governor’s plan will have a long-term negative impact on job creation and tax revenues for the state as it produces an unfair increase on taxpayers after they resoundingly defeated the graduated income tax. This not only will expand what will get taxed, but will also reduce key tax credits for vital sectors of the economy." 

"We know the administration faces a tough fiscal task. However, these tax increase proposals will only paper over our short-term problems but accelerate Illinois’ long-term economic crisis. In particular of the many problems in the Governor’s proposals, a particular concern is the elimination of the single sales factor in assessing Illinois income tax. This misguided proposal has the impact of increasing taxes on Illinois based businesses at a time we can least afford it.”

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