Governor Promotes Budget; Local Legislators Pan It

As the 2021 legislative session comes to a close, Governor JB Pritzker discussed the budget for the coming fiscal year passed early Tuesday morning.

“I came into this office two sessions ago with a promise to always meet our most basic responsibility: a REAL balanced budget. For the third straight year, I’ll sign into law another balanced budget for Illinois that demonstrates fiscal responsibility works with a progressive vision of governance. All of these achievements collectively mark a significant turning point for our state. I want to thank my partners in the General Assembly for making this trajectory possible. Together, we’ve worked to solve the problems of the past while managing the challenges of the present and keeping a sharp eye on the future.”

 
FY22 Budget

• FY22 General Funds Budget totals $42.3 billion, holding the operating budget roughly flat 
• Closes $655 million in corporate loopholes to protect the middle class while the wealthiest corporations pay their fair share
• Stronger state FY21 revenues accelerate repayment to the federal government of $3.2 billion in emergency borrowings, saving the state tens of millions of dollars 
• Allocates Year 1 of ARPA money, including a $570M investment in economic recovery and small businesses.

Key Priority Investments

• Additional $350 million for K-12 education, bringing the total to $9.2 billion.
• $7.7 Billion in federal funds to schools 
• $28.2 million more for MAP grants to a total $479.6M for need based college financial aid
• $3.4B for Child Care Assistance Program (CCAP)
• $170 million in additional investment in services for people with developmental disabilities  
• Fully funds FY22 pension contribution of $9.4 billion 

Ending Corporate Loopholes (SB 2017)

Closes four tax loopholes worth $655 million to the state and $42 million to local governments.

• $314 million: Cap Corporate Net Operating Loss Deductions at $100,000 Per Year For the Next 3 Years 
• $214 million: Roll Back Federal Tax Cut and Jobs Act 100% Accelerated Depreciation Deduction 
• $107 million: Align Domestic & Foreign-Source Dividend Deduction 
• $20 million: Freeze Phase Out of Corporate Franchise Tax 

ARPA Focus: Pandemic Recovery 

• $1.5 billion for crucial investments in Illinois businesses, families, and communities, including: 

o $570 million for small businesses and impacted industries, including the $450M Economic Recovery plan outlined below 
o $350 million for public health response, pandemic assistance to health care industry and behavioral health investments
o $100 million for violence prevention and summer youth employment efforts across the state
o $100 million for affordable housing, supportive housing and homelessness initiatives
 

ARPA Economic Recovery Plan: $450M initial investment

• $300 million for Back to Business Grants, with 40 percent of the funds going to communities that were disproportionately impacted by the pandemic
• $10 million for Tourism promotion and Main Street festival grants
• $50 million for Workforce Recovery efforts
• $20 million for Community Navigators and targeted business support services
• $25 million for the DCEO RISE program for local economic recovery planning and partnerships
• $45 million in capital for commercial corridors and downtowns that have experienced disinvestment.

The following are the Governor’s remarks as delivered:

Four years ago, Illinoisans were grappling with a state budget crisis that crippled our schools, our human services, our universities, our confidence about our ability to work together for the common good. Our working families, our seniors, our students, our most vulnerable residents, paid the price for it. And over the course of the prior administration, our state suffered 8 credit downgrades, forcing the state to pay more to do less. Unfortunately, Illinois became an example for the nation of what happens when government and budgets are mismanaged.

Four years later, amidst the pain and loss caused by a deadly global pandemic, Illinois has become, instead, an example for the nation of how resilient our people are, not only in helping our families and our neighbors persist through a financial crisis and a health crisis, but also in managing through the state’s fiscal challenges.

I came into this office two sessions ago with a promise to always meet our most basic responsibility: a REAL balanced budget.

For the third straight year, I’ll sign into law another balanced budget for Illinois that demonstrates fiscal responsibility works with a progressive vision of governance.

Today, ours is a budget that addresses the historical structural deficit and makes responsible choices, paying off debt early, nearly eliminating our backlog of bills, and making critical investments to stimulate economic growth, jobs, and opportunity for our people. All while keeping our operating budget flat aside from education and critical human services. And for the third year in a row, we’re making our full pension payment.

Not only that: this budget also ensures the entire $3.2 billion borrowed from the Fed in the bleakest moments of the pandemic will be paid in full more than a full calendar year ahead of its due date. Doing that saves taxpayers tens of millions of dollars in interest payments.

I want to pause on that for a moment, because all of these achievements collectively mark a significant turning point for our state.

Republicans like to badmouth the state and yet they’re the ones who wanted to irresponsibly spend one-time American rescue Plan dollars to paper over our structural deficit. In contrast, we Democrats are investing in priorities that will grow and revitalize our economy, improving our fiscal outlook DRAMATICALLY, and reducing tax expenditures on the wealthiest corporations. It’s the Democrats that are getting the state’s fiscal house in order.

That’s the story of this budget. That’s the story of Illinois in 2021.

Fiscal discipline pays off. I’ve been in office for fewer than 900 days. And in that time – despite the greatest public health challenge in a generation – the bill backlog has been nearly eliminated — down to 30 days or less. We’re paying our bills on time – and saving tens of millions of taxpayer dollars in interest.

I want to thank my partners in the General Assembly for making this trajectory possible, especially Speaker Chris Welch and President Don Harmon, budget leaders Greg Harris and Elgie Sims and their respective teams. Together, we’ve worked to solve the problems of the past while managing the challenges of the present and keeping a sharp eye on the future. Thanks to new leadership in the General Assembly, a willingness to put discipline over desire, the fierce advocacy of so many across our state fighting for a better Illinois: we are changing our story about Illinois.

A commitment to a robust and inclusive future also guides our first investments of Illinois’ $8.4 billion in federal relief dollars, which will fund initiatives and priorities over the next three (and a half) years.

Republicans wanted to use our one-time COVID relief funds to kick the budget can down the road and give favors to wealthy business interests. Instead, those dollars should be used to bring real relief to working families and spur economic recovery and safety in our communities.

I’m proud that my administration partnered with the General Assembly to craft a robust economic recovery package.

That includes over $570 million for economic recovery for small businesses, entrepreneurs and the most heavily impacted industries, notably $300 million more for our Back to Business grant program. Earlier in the pandemic, Illinois was one of the first and only states to get $540 million in relief to thousands of small businesses and childcare providers, and this new funding will expand the reach of the nation-leading Business Interruption Grant program.

We’ll also bolster our pandemic response, mitigating COVID-19’s impacts, and strengthening our public health infrastructure for a safer future for all.

And $1 BILLION will jumpstart critical projects in our plans to Rebuild Illinois, hastening much-needed improvements – like our Connect Illinois broadband plan – and getting more jobs into more communities.

Illinois is also doing more than ever before to stop the violence that ravages too many vulnerable communities: trauma that ALSO deserves relief, just as much as economic pain. We’re allocating more than $100 million for multi-pronged, comprehensive violence prevention and intervention efforts here in Illinois. My administration has worked with Senator Robert Peters and Representative Justin Slaughter, along with others in the General Assembly, to shape the Reimagine Act to prevent gun violence. That includes creating a new Office of Firearm Violence Prevention, addressing trauma recovery from chronic exposure to gun violence for Illinois adults, and increasing funding for the COVID-19 Summer Youth Employment Program, which my administration launched last summer to deliver more opportunities to communities who are hurting. I’ll be spending more time this summer talking about what these investments mean for our state, but I want to be clear: these are historic investments that have never before been made in Illinois, investments in real solutions — and they’re critical steps in our efforts to tackle root causes of violence.

Our state will also be increasing our help for housing, providing over $100 million for affordable housing and addressing homelessness, building on the $1.5 billion in rental relief I recently announced to further our mission of providing affordable, stable housing for all Illinoisans. I want to commend Senator Mattie Hunter and Representative Will Guzzardi sponsoring the affordable housing omnibus and working hard to send it to my desk. Together we are elevating the impact of these programs to new heights.

The General Assembly has also paved the way for Illinois to join the bipartisan coalition of states utilizing vaccine lotteries to encourage more residents to get vaccinated against COVID-19. The best thing we can do to protect ourselves and our loved ones is to have as many people vaccinated as possible, so be on the lookout for further announcements on this front soon. Also, and this is a personal favorite of mine: in Illinois, soon you’ll be able to get a beer and a shot – or a shot and a shot, whatever suits your pallet.

I want to do a lightning round for all of the progress that was made this legislative session:

On ethics, there are new guardrails to stop abuses like the revolving door and lobbying while working for government. It isn’t perfect and more work remains, but there are more ways of putting a stop to corruption today than we ever had before.

On cannabis, I’m so proud of the work Toi Hutchinson did with Rep LaShawn Ford and Leader Kim Lightford to expand opportunities for people from vulnerable communities to get into this new industry – continuing our work to be at the to be at the forefront of cannabis equity.

On gun safety, Illinois State Police Director Brendan Kelly worked closely with advocates and lawmakers to streamline FOID card applications and expand incentives for background checks.

On social justice, we are recognizing Juneteenth as a state holiday but more importantly, as a time to celebrate emancipation.

So, before I take questions, I want to close by saying that this has been another landmark legislative session and the people of Illinois are better for these efforts. I want to thank the members of the General Assembly for their work to bring so many vital efforts across the finish line.

Here is what area legislators, all of whom voted against the budget, had to say about the measure:

ST. REP. ADAM NIEMERG OF DIETERICH--

“The Democrats can use whatever words they want to try to hide the reality, but make no mistake, this is a tax hike that every working family in Illinois will have to pay. This budget does not even include needed additional funds for IDES to help those who have lost their jobs because of the COVID-19 shutdowns by the Governor. There is over $8.1 billion one-time money available from the federal ARPA program intended to help Illinois with the COVID-19 impact, but nothing is provided in their budget.”

Rep. Niemerg pointed out that the budget decreases benefits for the people who need them most which is why the Department of Employment Security exists as a ‘safety net’ program for people. At the same time, the budget allows for an automatic pay increase for legislators.

Other legislation passed over the past few days and into the late night, mainly along Democrat partisan lines includes closing the three detention centers for undocumented illegal people who are awaiting deportation processing back to their home countries.

“Closing these centers will mean they will be relocated to other states’ detention centers and eliminate jobs for Illinoisans in some of the most economically stressed parts of southern Illinois. I believe this will give bad actors more ability to skirt the law in Illinois and I opposed this move.”

Niemerg pointed out that many other bills pushed through dealt with everything from political changes of judicial sub-circuit in some counties, opening polling locations in jails, doubling legislative office budgets, a billion dollars for pet projects in Democrat districts, and a watered down ethics bill.

“I voted against the so-called ethics proposal because it was a joke. Even the Inspector General opposed that bill because it has no real teeth in it to allow her to open up independent investigations without the Democrats’ approval. One bright spot I am happy to say was being able to help pass a reduction in the trailer fees from the Governor’s rate of $118 back down to $36 per trailer, a nearly 70 percent rollback.”

ST. SEN. DARREN BAILEY OF XENIA--

“In typical Democrat fashion, the majority filed a 3,000 page budget just before midnight, minutes before my friends over in the House of Representatives voted on it. With little to no time to review the proposal, the Senate passed the same partisan budget after 2 a.m. Tuesday.  This spending plan is reckless, eliminates almost $700 million in job-creation incentives, and adds dozens of new programs, including $1 billion in Democrat Pork projects. After the year our communities suffered due to government overreach and COVID-19 shutdowns, we should be investing in the hard-working people of our communities instead of furthering backdoor agendas benefiting partisan politicians.”

ST. REP. BLAINE WILHOUR OF BEECHER CITY--

“The same heavy handed tactics that have been used for decades to sneak unpopular legislation through in the dark of night is still the order of the day in Springfield. Michael Madigan may not technically be the Speaker of the House any longer, but his playbook is still being used to consolidate political power with partisan maps, tax increases, and legislator pay raises!”

Rep. Wilhour pointed out that no more money was added to the unemployment funds for the people of Illinois who are not working because of the coronavirus executive orders to shut down businesses for more than a year in many cases.

“Bad proposal after bad proposal was pushed through that will continue to see families and businesses leave Illinois. The Democrats have built their political empire on the backs of working people and bad business policies for many years and will not even propose real reforms to fight corruption in this state. We saw just this week yet another Madigan associate indicted in connection to the Commonwealth Edison bribery scheme. There needs to be bold reforms to fight the systemic corruption in Illinois!”

ST. SEN. JASON PLUMMER OF EDWARDSVILLE--

“After a year of shutdowns and state-imposed restrictions at the hands of Governor Pritzker, the battered business community of this state cannot afford to withstand any more of the Democrat majority’s partisan ploys. The State of Illinois has over $16 billion in unexpected financial resources, but that’s still not enough for Governor Pritzker and his allies. Under their spending plan, Democrat lawmakers are eliminating almost $700 million dollars in job-creation incentives at a time when our job creators need our help the most. But they made sure to load the budget with new programs, including over $1 billion in Democrat pork projects. As with most of what has been rammed through the General Assembly this session, the majority’s spending proposal was crafted behind closed doors and without public input. My Democrat colleagues are making a real habit of furthering their backdoor agendas while the people of this state are asleep.”