SPRINGFIELD — The governor has proposed a spending plan for the next fiscal year that’s level with spending of the current out-of-balance plan, it’s now up to the legislators to take the ball across the finish line.
Gov. J.B. Pritzker’s $42 billion spending plan is based on several assumptions, including the state legislature ending nine different tax incentives to bring in $930 million.
State Sen. Christina Castro, D-Elgin, said she likes the full pension payment the governor laid out. She also said she’s glad there aren’t any tax increases.
“During this pandemic, our families have been hit hard and I would have never have supported a tax increase,” Castro said.
But, Castro signaled she’d look more into closing what the governor called “corporate tax loopholes.”
Senate President Don Harmon, D-Oak Park, signaled it’s time to review of such programs.
“It’s probably past time to put some of these incentives under the microscope to see what works and see what doesn’t,” Harmon said.
But House Minority Leader Jim Durkin, R-Western Springs, said Pritzker proposing ending tax incentives has the governor going back on his word from several years ago, including an incentive program for school choice scholarships.
“At a time when businesses across our state are grasping at straws to stay afloat after being shuttered due to executive orders, Governor Pritzker is proposing a tax increase on all of them saying they are just loopholes,” Durkin said.
The nine different programs the governor wants the legislature to take action on are:
- Capping corporate NOL deductions for a $314 million impact;
- Align treatment of foreign-source dividends to treatment of domestic source dividends for $107 million impact;
- End accelerated depreciation from former President Donald Trump’s Tax Cut and Jobs Act for an impact of $214 million;
- Accelerate the expiration of exemptions for biodiesel for an impact of $107 million;
- Bring back the corporate franchise tax for an impact of $30 million;
- Cap the retailers discount at $1,000 a month for an impact of $73 million;
- Reset the tax credit for private school scholarships at 40% for a $14 million impact;
- Eliminate add-on income tax credits for construction jobs for a $16 million impact; and
- Remove production-related tangible personal property from sales tax exemptions for an impact of $56 million.
Pritzker administration officials said all such proposals, totaling $932 million, require legislative approval.
Senate Minority Leader Dan McConchie, R-Hawthorn Woods, said the governor’s budget relies on money from policies that haven’t been approved.
“He’s embracing gimmicks that his predecessors have done by ignoring this constitutional requirement to live within the existing revenue amounts and instead is counting on $1.5 billion in new revenue through hopeful statutory changes,” McConchie said.
Republicans said because of the assumptions, the proposal wasn’t balanced, but $1.7 billion in the hole.
Other lawmakers questioned the proposed budget’s reliance on federal aid that has not yet materialized.
Because of COVID-19, lawmakers are expected to mostly hold remote committee hearings. They have a May 31 deadline to pass a budget before the next fiscal year begins.