Pritzker promises tax relief, education, pension money thanks to ‘smart budgeting’ — but GOP smells ‘election year gimmicks’
The governor’s top advisers say Pritzker’s new spending plan keeps the state on track to end in the black for back-to-back years for the first time in 25 years. But state House GOP Leader Jim Durkin said, “The governor’s budget address is always a wish-list, and this year it’s clear that the governor wishes to be reelected.”
Gov. J.B. Pritzker painted a rosy picture of Illinois finances during his election-year budget address Wednesday, asserting that his administration has put the state on its strongest fiscal footing “since the turn of the century.”
The Democratic governor’s good-news budget proposal promises $1 billion in tax relief and increased investments in education and law enforcement, all while contributing an extra $500 million to the state’s nearly insolvent pension funds and pumping $200 million into its long-dry “rainy day” fund.
Pritzker outlined the ambitious $45.4 billion spending plan at the Old State Capitol in Springfield during a “State of the State” presentation that he was forced to downsize due to a massive snowstorm socking the state.
The governor had planned to address the entire General Assembly in person but had to opt for a livestreamed version delivered before a much smaller in-house audience after state legislators canceled much of this week’s legislative session.
In a 45-minute speech laying the cornerstones of his reelection campaign, Pritzker announced the state would close out the fiscal year ending in June with a $1.7 billion surplus — its largest in 25 years — and pledged that “smart budgeting” has become “the rule, not the exception” in a state long defined by its fiscal incompetence.
“It’s not political work. It’s just hard work,” Pritzker said. “That is what my administration and the majority of the General Assembly have been committed to doing, no matter how difficult the circumstances, or how unprecedented the times.”
Pritzker’s budget proposal — which will certainly be tweaked but won’t face serious opposition in the Democratic super-majorities of the General Assembly — calls for an extra half-billion dollars to Illinois’ long-neglected pension funds.
That would mark the first time since 1994 that the state would contribute more than its legally required annual payment — hardly a dent in the unfunded obligations that soared over $144 billion in 2020, but a move that will save the state $1.8 billion through interest in the long run, Pritzker said.
As for the $1.7 billion surplus, administration officials said it’ll help chip down the state’s unpaid bill backlog to about $2.7 billion by the end of the next budget year, down from nearly $9 billion in June of 2020.
About $600 million in surplus dollars and $200 million in the latest budget proposal would start shoring up the state’s Budget Stabilization Fund, the “rainy day” emergency account that hasn’t seen a cash infusion in 18 years. Most states keep enough money on hand to operate for 29 days, but Illinois’ could only keep it running for 15 minutes, Pritzker said.
“The past few years have shown us that rainy days do actually arrive,” he said.
The fiscal moves are proposed with an eye toward Wall Street credit ratings agencies that have issued their first upgrades to the state in decades under Pritzker — who would surely welcome another boost heading into a tough re-election battle.
Pritzker’s office says they can do all that while offering almost $1 billion in tax relief for families feeling the “pinch” of inflation. That includes $495 million in combined savings by suspending a 1% tax on groceries and freezing a scheduled increase in the gas tax, while offering $475 million in property tax rebates to homeowners. Roughly 2 million residents would be eligible for those rebates, with direct payments of up to $300 each.
In the spending column, Pritzker proposed increasing education funding by $350 million, and increasing Illinois State Police funding by almost $19 million to hire more cadets. The state’s troubled Department of Children and Family Services would see $250 million more in funding compared to the current budget, a 16% increase.
Administration officials say they can afford the increases because of improved revenue forecasts in the rebounding economy, consolidated leases through the sale of state properties such as the Thompson Center, and savings on health care expenses through negotiations with state worker unions and insurance companies.
But Republicans swiftly dismissed the lofty plan as a series of “election year gimmicks.”
“The governor’s budget address is always a wish-list, and this year it’s clear that the governor wishes to be reelected,” Illinois House Republican Leader Jim Durkin said in a statement. “The people of Illinois deserve a governor who will be honest and work to actually fix things like property taxes and out-of-control crime.”
Aurora Mayor Richard Irvin, the Republican establishment’s pick in the June primary to unseat Pritzker, said in a statement that it’s “no surprise that the Tax-Hiker-In-Chief is attempting to rewrite history today to mislead Illinois voters in an election year with gimmicks that rely on a disappearing federal bailout.”
Other Republican governor hopefuls slammed the plan as well. Referring to federal COVID relief dollars that helped Pritzker’s office make ends meet last year, Xenia state Sen. Darren Bailey said “you don’t go to the bank and borrow money and pretend you’ve got it made.”
Bull Valley businessman Gary Rabine argued that President Joe Biden “paid off JB’s Illinois credit cards last year, but we are still in a fiscal death spiral.” Former Waterloo state Sen. Paul Schimpf waved it off as an “illusion of so-called relief.” Petersburg venture capitalist Jesse Sullivan called the property tax rebate plan “attempted bribery.”
Pritzker pre-empted his rival “cynics’” criticism during his speech, insisting “our state budget surpluses would exist even without the money we received from the federal government.”
“During this budget cycle especially, seats at the grown-up table will be off limits to those who aren’t working in the public’s best interests,” the governor said.
Pritzker’s plan was hailed by allies in teachers unions and medical groups, while leaders of the Illinois Chamber of Commerce and the Responsible Budget Coalition said they were “encouraged.”
Democratic leaders predictably cheered the proposal, including Illinois Senate President Don Harmon, who has had a sometimes icy relationship with the governor but called it “a budget proposal unlike any I’ve seen in my time in the Senate.”
But business and labor groups banded together as the Transportation for Illinois Coalition urged Pritzker to reconsider a freeze on the gas tax.
“Taking $135 million out of the planned construction program now will have a more significant impact over several years, as projects that could be planned with those funds will be delayed,” the group cautioned. “It also could create a political temptation to skip future scheduled small tax increases that will worsen our funding problem.”
A finalized budget is expected to pass the General Assembly by April.
Contributing: Taylor Avery