Gov. J.B. Pritzker delivered his State of the State and FY22 budget address today, saying that the budget reflects necessary “hard choices” that must be made to address the COVID-19 pandemic and the state’s financial challenges.

In a pre-recorded message filmed at the Illinois State Fairgrounds, Pritzker took aim at Republicans and those in the “far right” who have argued against safety restrictions and pandemic assistance for citizens.

“Throughout the pandemic, they have encouraged businesses to defy health guidelines, spread conspiracy theories about COVID deaths, and fought mask guidelines tooth and nail. Amidst the tragedy of this pandemic, they have lobbied against the federal government providing relief to Illinoisans, ignoring the life-changing economic pain of real working families. In essence, they eliminated the fire department, burnt down the house, and poured gas on the flames. Now they’re asking why we’re not doing more to prevent fires. In a normal year, I might have more patience for their hypocrisy. But this is not a normal year,” Pritzker said.

The governor’s $41.6 billion proposed budget does not include explicit tax increases for Illinois residents and includes additional funding in areas like education and at the Illinois Department of Employment Security (IDES), which has seen an increased workload during the COVID-19 pandemic. He called on the General Assembly to pass a standalone bill that would direct $60 million directly to IDES to support call center positions and administer federal unemployment programs.

Pritzker is also proposing a $28 million increase in MAP grants to assist low-income Illinois students seeking higher education opportunities.

The budget also includes $1.8 billion less general funds spending than in FY21, including a state hiring freeze. Pritzker touted efficiencies in the state government and optimizing the state’s workforce as a significant source of budgetary savings. 

Pritzker proposes raising over $900 million by “closing corporate tax loopholes” to help address the state’s budget deficit. These include capping corporate net operating loss tax deductions, accelerating the expiration of tax exemptions for biodiesel, and eliminating the add-on income tax credit for construction job payroll.

The governor also proposed extending repayment of borrowed funds and relying on federal COVID-19 aid to reduce the state deficit.

Republican leaders accused the governor of reneging on deals he struck with them in 2019 during budget negotiations. They said that the state’s financial challenges existed long before the COVID-19 pandemic and that Pritzker has not taken the steps to rein-in spending.

“It has led the governor to identify a billion dollars in tax increases on businesses and call them ‘loopholes,’ even though these are the same incentive programs that he himself signed into law, and that both Republicans and Democrats in the legislature correctly identified as meaningful tools to make Illinois a more competitive place for new business development, new job creation, and widespread construction and new investment projects,” said Rep. Tom Demmer (R-Dixon).

Republicans also said that the governor is over-relying on borrowed funds to deal with the state’s budget problems.

Senate Democrats were generally pleased with the budget and Pritzker’s address, saying it is a good starting point and makes the best of a challenging situation.

“I think this is a good faith effort by the governor to both recognize our financial realities and honor our commitments and priorities. Coming out of this pandemic we need to get people back to work. Our first priority with any tax incentive needs to be jobs for hard-working Illinoisans. I think it’s a fair question to ask what are the hard-working taxpayers of Illinois getting in return for corporate tax breaks,” said Senate President Don Harmon (D-Oak Park).

“Today's address was the first step in a process that involves all of us coming to the table and working line-by-line to build a budget that reflects our priorities: our COVID-19 response, improving operations for the Illinois Department of Employment Security, funding veterans homes, and providing resources for schools and job training efforts. To do this, we need to close corporate tax loopholes that have made it easy for them to avoid paying their fair share,” said House Speaker Chris Welch (D-Westchester) in a statement.

Outside of the budget, Pritzker urged the General Assembly to pass “real, lasting” ethics reform legislation.

Allison Richard
Legislative Consultant