* Dave McKinney last year…

With tax season approaching, millions of Illinoisans won’t be seeing a bump up in a widely used state tax credit known as the standard exemption after lawmakers throttled a planned increase in the credit for the 2023 tax year.

Tucked within a 558-page revenue package, the little-noticed tax change came about last spring with passage of the state budget omnibus package approved by the Democratic-led General Assembly and enacted by Democratic Gov. JB Pritzker. […]

Prior to the 2023 tax year, the standard exemption increased 10 times under an automatic escalator tied to inflation put into effect in 2012 by former Democratic Gov. Pat Quinn, who served as the state’s chief executive between 2009 and 2015. The change roughly a decade ago had overwhelming bipartisan support in the legislature.

But the standard exemption will remain flat this tax-filing season at $2,425 for those who declare adjusted gross income of $250,000 or less individually or $500,000 or less for married couples.

* Dave McKinney this week…

An inflation-indexed tax credit that millions of Illinoisans receive would rise for the 2024 tax year under a $93 million proposal by Gov. JB Pritzker, but the increase is short of what current law dictates and what legislative Republicans and former Democratic Gov. Pat Quinn want.

The possible increase in the standard exemption from $2,425 to $2,550 per person was included within Pritzker’s proposed $52.7 billion budget proposal he outlined Wednesday.

Pritzker’s proposed change would amount to slightly less than $25 in savings for a family of four over 2023 tax year levels, according to calculations by WBEZ. […]

When Pritzker and Democrats instead decided last year to keep the $2,425 amount in effect for the 2023 tax year, the law was written so the inflation escalator would resume for the 2024 tax year and continue in place through the 2028 tax year.

That meant the standard exemption would automatically rise to $2,775 for tax year 2024.

That’s $225 more than what Pritzker is now proposing — setting up a scenario where lawmakers doing nothing on the governor’s proposal this spring actually would be more generous for taxpayers than what Pritzker is floating.

I explained this to subscribers yesterday morning. I’d suggest clicking the links if you don’t quite get it. I can only excerpt so much.

But the bottom line is the governor essentially decided to skip an increase in the standard exemption during a major inflationary year and then restarted the cost of living clock, likely because it would’ve been an even bigger hit to the budget than the $93 million this will cost.

* Here’s more…

* ABC Chicago | Pritzker proposes eliminating sales tax on groceries, mayors worry about revenue loss: In the city of Northlake, where there are four grocery stores, the mayor is genuinely worried about the impact on his community if lawmakers approve the governor’s plan, because it’s all money that goes back to communities. “Well, it’s a noble idea. I mean, that’s great. Nobody wants to pay taxes, especially on groceries. But I think there’s a whole string of unintended consequences going all the way down to the local level,” said Mayor Jeffrey Sherwin.

* Capitol News Illinois | Budget reaction: Retailers, municipalities critical of Pritzker’s proposed tax changes: The IML particularly criticized this year’s proposal in light of continued underfunding of the state’s local government distributive fund. Municipalities are currently getting less than 7 percent from the state’s income tax, although last year’s budget contained a small increase. That’s less than the 10 percent cut municipalities were getting prior to the passage of a state income tax hike in 2011.

* Center Square | Retailers push back on Pritzker’s proposal to cap sales tax credit they claim: Retailers receive a discount of 1.75% of the sales tax they collect from sales as reimbursement for collecting taxes for the state. Pritzker wants to cap the claim at $1,000 a month. His administration said the move would raise about $101 million for the state and $85 million for local governments.

* Capitol News Illinois | With budget proposal and fiery address, Pritzker paints himself as progressive pragmatist: The governor was met with big applause from Democrats in laying out his proposed “Healthcare Consumer Access and Protection Act,” which would, in part, ban “prior authorization” requirements for mental health treatment. Pritzker characterized the practice of prior authorization as a way for insurance companies to deny the care that doctors have prescribed.

* WCIA | Pritzker highlights proposed education investments in budget address: “I propose we stay on plan and increase Smart Start funding by $150 million in year two to create 5,000 more preschool seats, continue growing childcare and reach thousands more families with critical early childhood services,” Pritzker said. The governor plans to have universal Pre-K in Illinois by 2027.

* WAND | Pritzker prioritizes education, human services in $52.7 billion budget proposal: Pritzker’s budget also invests $350 million for the evidence-based funding model helping K-12 schools. He noted that the state’s teacher pipeline has already helped bring nearly 5,400 new teachers to 170 school districts across the state.

* STLPR | Illinois Gov. Pritzker pitches plan to reduce Black maternal deaths in latest budget: Pritzker, a Democrat, presented the plan Wednesday as part of his budget plan for the fiscal year that begins in July. The budget includes $4.4 million to study the state’s maternal mortality rate and create a plan to help pregnant women and new mothers. It also includes $1 million to help midwives and other community-based providers open practices and gain Medicaid certification and $5 million to bolster the state’s home-health visiting program for low-income and young families.

* Press Release | Illinois Legislative Latino Caucus outlines priorities following governor’s budget address: “Our State’s prosperity is intertwined with the success of our Latino community, our state budget must prioritize equitable investment in healthcare, education, and jobs for Latino families,” said House Latino Caucus Chair Dagmara Avelar (D-Bolingbrook). “While we recognize positives in Governor Pritzker’s proposal, we’re committed to further enhancements. We will continue our united mission to serve our communities faithfully.”

* WQAD | Here’s what QCA leaders had to say about Illinois Gov. Pritzker’s State of State address: The Quad Cities Chamber applauds Illinois Governor J.B. Pritzker for a continued commitment to balanced budgets, which creates stability and certainty for businesses and residents. The Chamber sees areas for opportunity and collaboration as the State deliberates on final budget allocations and particularly in our focus areas of workforce and business and economic growth.