Gov. J.B. Pritzker is proposing tax increases on businesses just months after they led the charge against his progressive income tax initiative.
Pritzker wants lawmakers’ help in passing a budget that he said “removes corporate loopholes” by clawing nearly $1 billion from Illinois businesses a year after thousands were closed by his pandemic-induced executive orders.
Pritzker gave his budget address Wednesday afternoon. Due to COVID-19 concerns, the governor presented virtually from the Illinois State Fairgrounds in Springfield.
“I had bolder plans for our state budget than what I am going to present to you today. It would be a lie to suggest otherwise,” he said. “But as all our families have had to make hard choices over the last year, so too does state government. And right now, we need to pass a balanced budget that finds the right equilibrium between tightening our belts and preventing more hardships for Illinoisans already carrying a heavy load.”
His $41.6 billion budget proposal includes no new income tax hikes, something he warned would happen if the state didn’t scrap its flat tax protection in the Illinois Constitution.
In revising the revenue forecast up and erasing the budget gap with extended borrowing, Pritzker now estimates the state will have a budget surplus.
The state was facing a $3.9 billion budget shortfall in November. Pritzker said he has closed that gap. They borrowed from the federal Municipal Liquidity Facility fund, Illinois’ treasury funds, and other accounts controlled by the state comptroller. He said a November estimate was conservative and the state plans to pay what’s due in federal loan repayments early. Pritzker expects to end the current fiscal year with a $77 million surplus and increase that to $120 million if lawmakers follow his lead.
Illinois’ Constitution requires lawmakers to enact a balanced budget, but that requirement is often sidestepped with overly-optimistic revenue estimates.
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