* AP…

The Illinois governor plans to tackle inflation by sparing consumers nearly $1 billion in taxes in the coming year, including freezing taxes on groceries and gasoline and offering a rebate to homeowners.

Gov. J.B. Pritzker will include the plan in his budget proposal set for Wednesday.

The Democratic governor’s plan was outlined by Deputy Gov. Andy Manar in an interview with The Associated Press.

With inflation at 7%, it would suspend for a year the 1% sales tax on groceries, freeze the motor fuel tax on gasoline at 39 cents per gallon and provide a property tax rebate of up to $300.

You’ll remember these ideas from the poll questions I recently shared.

* Sun-Times…

The relief includes a suspension of the 1% state tax on groceries during the fiscal year starting July 1, which would save residents an estimated $360 million, Deputy Gov. Andy Manar said Friday.

Grocery tax revenue is earmarked for local municipalities, which will still be “made whole” by other state revenue, Manar said.

Pritzker’s proposal would also suspend a 2-cent-per-gallon increase to the gas tax that was scheduled to kick in this summer, keeping about $135 million in residents’ pockets.

The gas tax hike was a key funding component of Pritzker’s signature $45 billion capital infrastructure improvement plan that was implemented in 2019. Manar said the one-year freeze “will not have an impact on the overall program” and won’t interrupt work already underway on many of the state’s aging roads and bridges.

* WBEZ…

And the property tax rebate component would apply to individuals making $250,000 annually or less or to couples making $500,000 or less. That provision would be the priciest of Pritzker’s proposed tax cuts, coming in at $475 million.

Rebates would be capped at $300. The governor’s office did not make clear whether payments would go out in the form of paper checks or direct deposits or whether they would be received ahead of the Nov. 8 general election date.

“In total, this is nearly $1 billion in relief to Illinois families,” Manar said. “And the governor believes at this moment – because we have the ability to do this with our budget stabilized and our state finances are in good shape – that we should focus on the cost of groceries, the cost of gasoline and the cost of property taxes and bring relief to families across the state.”

The state’s financial picture has been on an upswing under Pritzker with state income and sales taxes surging ahead of projections. In November, in a presentation to bond investors, Pritzker’s administration disclosed year-to-date state revenues were $1.3 billion ahead of previous-year levels.

* Tribune…

In a combined budget speech and State of the State address, Pritzker will face a dual task: outlining his spending plan to kick off negotiations in the Democratic-controlled legislature, and making the case to voters that his handling of the state’s chronically shaky finances, his pandemic public health policies and his efforts to reach out to long-neglected minority communities have earned him another four years in office. […]

And even with Democrats in full control of the legislature, there’s no guarantee of full support for everything Pritzker proposes.

In an interview last week on Illinois Public Media’s “The 21st Show,” Senate President Don Harmon, an Oak Park Democrat, was asked about the possibility of providing some relief to taxpayers, such as suspending the sales tax on groceries, as Pritzker will propose.

“We could do it, but we wouldn’t provide a lot of relief for struggling families. … We don’t want to do something that is flashy showbiz but doesn’t provide real relief to people” Harmon said.

A transcript of that interview is here.

* Crain’s…

Pritzker has plenty of company in cutting taxes now. Not only Republicans in states such as Indiana but newly installed New York Gov. Kathy Hochul, a Democrat, have proposed reductions in their levies, too.

*** UPDATE 1 *** Press release…

Legislators, advocates and community members urged Gov. Pritzker to offer a tax cut for low-income Illinoisans in the State’s FY2022 budget, ahead of his Feb. 2 budget address. Advocates urged the inclusion of a bill (SB3774 Aquino/ HB4920 Ammons) that would expand Earned Income Credit (EIC) eligibility, include a new state Child Tax Credit, and increase the amount of credit available to each low-income filer.

“I am proud to be the chief sponsor of HB4290, a bill that would expand the Earned Income Credit and lift millions of Illinoisans out of poverty by providing low-income people with much-needed tax relief. Illinois’ current tax system is one of the most regressive in the country, blocking over a million of our neighbors from their basic needs in favor of the wealthy few,” said Representative Carol Ammons (D-Urbana). “As Gov. Pritzker prepares the annual budget address, I urge him to put Illinois on the path toward a more equitable tax system by expanding the Earned Income Credit.”

The bill to expand Illinois’ Earned Income Credit (EIC) would offer 4.5 million low-income Illinoisans a tax break. The bill uses the popular and effective tax credit as a vehicle to get more dollars directly into households around the state. For most families, it would mean, on average, $600 in a refund at tax time. The bill proposes expanding eligibility to nearly one million low-income residents who are currently barred from the credit, and then increasing the available credit amount for all recipients.

Similar to the federal EITC, the current state EIC offers income tax relief to most workers earning less than $56,000 per year and would total up to $1,200 in a tax return. The newly filed state bill would expand Illinois’ Earned Income Credit to include groups currently ineligible for the refund—namely, childless workers aged 18-24 and over 65 and immigrants who file taxes with an Individual Taxpayer Identification Number (ITIN). It would also create a statewide Child Tax Credit of at least $600 for parents or legal guardians of children under 17. Finally, over three years, it would increase the credit amount from the current 18% match of the federal EITC to 25%, offering hundreds of dollars more each year to families who need it.

Gov. Pritzker released a statement on Friday praising current state and federal Earned Income Tax Credits and calling on taxpayers to take advantage of existing programs. The Pritzker administration has also spent recent years promoting a joint outreach initiative with the Ilinois Department of Revenue to increase taxpayer participation in the state credit. In 2021, 74,800 Illinoisans claimed a federal EITC credit but did not claim the state EIC, leaving $29.8 million on the table.

“The Earned Income Tax Credit is a huge benefit and puts thousands of dollars in the pockets of low to moderate income families each year,” Gov. JB Pritzker said in the statement Friday. “Even if an individual does not owe any taxes, they may still be eligible for the credit and receive critical funding that can be used for bills and necessities.”

Advocates for SB3774/HB4920 are hopeful that Pritzker signaling support of the existing EITC will translate to him including support for the tax credit’s expansion in next week’s budget address.

“An expanded Earned Income Credit would provide a lot of help for my family, especially as the pandemic has surged again. At this moment, we really don’t have economic security. Food, rent, and utility costs have gone way up this year, and it’s harder to support our children,” said Susana Salgado, a Chicago parent of three and a community leader with Community Organizing and Family Issues’ POWER-PAC. “The governor should make our tax system more fair, particularly for undocumented and mixed status families who are excluded from many government programs. An extra few hundred dollars at tax time would help us to get out of a hole of debt and alleviate our stress.”

The Coalition to Make EIC Work, a project of the Illinois Cost-Of-Living Refund Coalition, is leading the advocacy effort. The coalition includes more than 30 nonprofit, labor, consumer advocate, immigrant rights, and grassroots, community-based organizations across the state.

This bill comes at a time when the state is seeking ways to support communities most impacted by COVID-19. An expansion of the EIC to immigrant families, seniors, and childless young workers would help to strengthen the safety net for the groups left out of federal coronavirus relief programs.

To learn more about the bill, visit the fact sheet at bit.ly/expandEIC22.

Expanding EITC was included in that aforementioned poll.

*** UPDATE 2 *** Press release…

As JB Pritzker will surely try to rewrite history in this week’s State of the State and Budget Address and announce election-year gimmicks to cover up his record of out-of-control crime and higher taxes, here is a quick reminder of the sad and scary reality of his Administration over the last three years and why he simply can’t be trusted:

• Pritzker spent $58 million in an attempt to enact the largest tax hike in Illinois history on families, small businesses and farmers. This tax plan would have given politicians in Springfield unlimited power to raise taxes at their discretion on every family in Illinois. Despite his failure, he is committed to pursuing this endeavor again.

• Pritzker signed into law new policies that prohibit the police from doing their jobs and will put more criminals onto the street with cashless bail.

• Pritzker has let some of society’s worst criminals back onto the streets early, including multiple convicted murderers. They include a woman who shot her 21-month-old child and a man who beat his baby to death.

• Pritzker continuously attempts to abolish the tax credit scholarship program that provides low income families better educational opportunities for their children.

• Pritzker punished Illinoisans for the failure of his massive tax hike by raising taxes on Illinois businesses.

“Governor Pritzker’s actions over the last three years have proven that he simply can’t be trusted to lead our state,” Richard Irvin campaign spokesperson Eleni Demertzis said. “Election year gimmicks aren’t going to take back our state from out-of-control crime, higher taxes and corruption. To do that, we need a new governor.”

*** UPDATE 3 *** While not identical to the governor’s proposal, the SGOPS appear to be dancing to the same sort of tune. Or, perhaps more likely, they’ve come up with an excuse to not vote for the governor’s plan…

Illinois Senate Republicans are seeking to deliver Illinois families much-needed tax relief through their recently announced package of tax reform proposals. They say these measures will provide the citizens of Illinois with permanent, substantive relief, instead of the temporary relief that is expected to be proposed by Gov. JB Pritzker during his upcoming Budget Address.

“It’s encouraging to hear that the Governor has finally recognized the need to provide tax relief for struggling Illinois families, but they need more than just one-time, election year gimmicks. What they need is true, long-lasting tax relief that gets our state on the right track,” said Illinois Senate Republican Leader Dan McConchie (R-Hawthorn Woods). “People continue to be taxed out of this state. Short-term solutions will not fix that.”

As part of the proposed tax relief package, Senate Republicans are calling for reforms that help address the growing concerns of inflation and skyrocketing consumer prices. These changes include the elimination of the state’s one percent sales tax on food and prescription drugs.

“According to the U.S. Bureau of Labor Statistics, Americans have experienced the largest 12-month increase in inflation since June 1982,” said State Sen. Donald DeWitte (R-St Charles). “This includes a 6.3 percent increase in total food prices, and a staggering 16 percent increase in just meat prices. There are far too many Illinoisans worried about how they will be able to put food on their tables and pay for their family’s medicine for the state legislature to sit idly by and do nothing.”

Another section of the Senate Republicans’ tax proposal is aimed at addressing the climbing price of gas. They support a proposal that lowers the overall amount consumers pay at the pump, but also ensure that critical funding necessary for road improvements remains the same. This proposal includes lowering the 6.25 percent sales tax on gas/gasohol to 5.25 percent, while also increasing the Road Fund disbursement from 32 percent to 53 percent.

“This plan will not only provide relief for Illinoisans filling up their gas tanks, but will also ensure that we continue to fund construction projects desperately needed throughout the state,” said State Sen. Win Stoller (R-Germantown Hills). “In fact, our proposal will increase the state’s road fund by $80 million. This is a common-sense approach to alleviating the burden that our constituents are currently experiencing while at the gas pump.”

Additionally, the tax relief package being put forward would further help Illinois senior citizens by increasing the income tax exemption that they can receive on their Illinois income tax from $1,000 to $2,000.

“While there have been some state officials who have suggested the idea of placing additional taxes on our seniors, we are advancing ideas that actually save them even more of their hard-earned money,” said State Sen. Chapin Rose (R-Mahomet). “It is our goal to make Illinois a friendly tax state for both our seniors and retirees.”

Finally, Senate Republicans seek to take on the issue of property taxes that has plagued the state for far too long, by calling for an increase in the state’s property tax income tax credit. Under this initiative, the tax credit would rise from 5 percent to 10 percent. The plan also allows voters who are subject to the Property Tax Extension Limitation Law (PTELL), the ability to go to referendum to lower their property taxes.

“It is no secret to anyone that property taxes have been a serious, long-standing issue that many Illinoisans continue to face,” said State Sen. Craig Wilcox (R-McHenry). “For years, Illinois politicians have promised to provide property tax relief, and we intend to keep that promise.”
You can view the Illinois Senate Republican Caucus’ entire tax relief package here.