* You have to wade through a whole lot of heat to get to the light, but at least there is some in this Capitol News Illinois story, including…
The budget calls for a full pension payment and increases funding for the Department of Children and Family Services by 7.9 percent. Pritzker also asked lawmakers to pass a standalone bill increasing spending for the Illinois Department of Employment Security by $60 million in federal funds for the current fiscal year and called for an added $73 million for the current fiscal year in federal funds. […]
Pritzker’s budget proposal also calls for an 8 percent reduction, or $638 million, in Medicaid expenses. That’s because the federal government has increased its share of Medicaid funding by 6.2 percentage points through the end of 2021 as part of its pandemic response plan.
Local governments also would see a cut in financial assistance they get from the state. The Local Government Distributive Fund, or LGDF, which gives local governments a share of the income tax revenue the state collects, would only be funded at 90 percent, but officials in the governor’s office said they expect that cut to be offset by gains the municipalities would realize through the closing of corporate tax loopholes.
Budget officials also claimed the budget shortfall for the current fiscal year has been addressed through the federal borrowing, $700 million in operational cuts and revenues performing better than projections. The state is now projecting a surplus of $77 million for the current fiscal year, along with the ability to prepay some of the Municipal Liquidity Facility borrowing from the previous fiscal year.
As subscribers know, local government actually comes out ahead in the budget plan. But that isn’t stopping mayors from claiming the sky is falling…
City and county leaders in McLean County said Wednesday one of Gov. JB Pritzker’s budget proposals is a bad idea.
The governor has proposed taking 10% of the income tax money it currently shares with cities, towns, and counties through the Local Government Distributive Fund.
Normal Mayor Chris Koos said the proposal is ruinous.
“This will be crippling to municipalities across the state of Illinois if this is to go through. We’re already seeing a significant decrease in revenues because of COVID-19 and this is just another slap to cities,” said Koos.
I mean, even the Illinois Municipal League admits it…
However, the Governor is also proposing that various tax loopholes for corporations be closed or modified. The Governor’s Office projects that these changes, if enacted as proposed, will provide local governments with an increase of $228 million statewide in LGDF disbursements.
That would more than offset the proposed $152 million reduction.
State Sen. Darren Bailey, R-Xenia, who is expected to announce a run for governor in 2022, said he sat for “30-plus minutes today and listened to a grown man whine, complain and blame absolutely everything — past and present — except himself and his own party, as to the woes and the demise of the state of Illinois.
“This budget remains at least $1.7 billion out of whack,” Bailey said. “And this budget has several provisions that he claimed as corporate loopholes that are nothing but tax increases on business and job killers for the state.”
The Senate Republicans are claiming the budget is $1.7 billion out of balance because politically difficult statutory changes will be required to capture that revenue (corporate loopholes and fund transfers). It’s a legit hit.
But, Senator, now you know how the rest of us feel about your antics.
Click here for a one-pager on the loophole closures. Click here for more on the proposed fund transfers.
* Sen. Terri Bryant in the Southern…
“Just months ago, the voters of this state rejected the administration’s attempt to increase personal income taxes and now that tough decisions have to be made to compensate for the governor’s irresponsible spending, the governor is doubling down,” Bryant said in a statement provided to the newspaper.
“The budget put forth today is $1.7 billion out-of-balance, cuts funding to our Department of Corrections, redirects critical funding from Illinois’ infrastructure and eliminates hundreds of millions of dollars in business incentives.
“At a time when the hardworking families and the job creators of this state need responsible leadership the most, Gov. Pritzker is once again failing them,” Bryant said.
You can’t really say it’s $1.7 billion out of balance if you also claim it eliminates corporate loopholes because that’s where the money is coming from to fill the hole. Also, most of the IDOC decrease is due to phasing out Illinois Correctional Industries. They’re going with a more rehab-oriented system.
Rep. Amy Elik (R-Alton) says it fails to include a plan to pay off $5 billion in unpaid bills.
“And there is no realistic plan to pay of the $4.3-billion the state recently borrowed,” Elik says, as a Certified Public Accountant, she doesn’t believe it’s at all a balanced budget.
The state’s bill “backlog” is indeed about $5 billion. But when it gets to somewhere around $3 billion, the state can pay bills within 30 days. Paying off the complete backlog wouldn’t make much sense at a time like this. Then again, it always seems like we’re having those times.
And the state is budgeting for some debt repayment this and next fiscal year, although payments on some internal debt to special funds is being pushed off.
* The Politico story is kinda all over the place…
Republicans immediately pounced, criticizing the plan for relying on unrestricted federal aid to help fund state health departments and pay off debt. Pritzker’s plan does not include any additional stimulus money from the Biden administration.
Pritzker’s budget will now be dissected by the Democratic-led General Assembly, where lawmakers will have their way with the numbers.
What really sticks in the craw of Republicans is Pritzker’s proposal to pull back on tax loopholes for businesses, which the governor’s offices says would create $1.5 billion in new revenue. They see it as Pritzker seeking vengeance on business groups who opposed the graduated income tax measure that failed in November.
No doubt there’s at least some vengeance here, but you gotta get the money from somewhere.
And it seems like everything sticks in their craw these days.
* The Tribune skipped past most of the budget and went right to politics…
From the story…
“None of these items are loopholes. They are incentives to grow jobs and educate children,” Durkin said.
“Loopholes, on the other hand, are what tycoons use to avoid paying taxes in Illinois, like parking money in the Cayman Islands or using questionable property tax exemptions,” he said, making note of personal tax practices for which the billionaire governor previously has been criticized.
While Pritzker seems eager to blame Republicans for the failure of the graduated income tax proposal, Durkin said, it was rejected by a “tri-partisan effort” of Republicans, Democrats and independents.
“It’s time for the General Assembly to bring the governor back to reality,” he said.