Pritzker proposes not one, but two budgets, relying on the Illinois Fair Tax measure


Daily file photo by Colin Boyle

Gov. J.B. Pritzker speaks at an event. The governor proposed two budgets, one for either outcome of November’s Illinois Fair Tax referendum.

Delaney Nelson, Reporter

Last Wednesday, Gov. J.B. Pritzker delivered the annual budget address to the state legislature in Springfield. He proposed not one, but two budgets: one for if the Illinois Fair Tax referendum passes in November, and one for if it fails.

If passed, the fair tax ballot measure would repeal the section of the state constitution that mandates a flat-rate personal income tax, and introduce a graduated income tax.

Pritzker said the goal of the plan is to make taxation fairer for all residents. Lower-income families will pay a lower tax rate, and higher-income residents will pay a higher rate.

In waiting for the November results that will determine whether there will be a graduated income tax, Pritzker said $1.4 billion will be held in reserve, including funds for pensions and education. The proposed budget includes $42 billion in spending, whether the graduated tax passes or not, while projected revenue is around $40.6 billion. This gap would be closed by revenues from the new tax plan.

If the tax plan is passed, Pritzker hopes to dedicate $350 million to K-12 education, directed at initiatives such as covering AP Testing fees and increasing funding for the Illinois Golden Apple teacher preparation program.

If the graduated tax fails, the government would only allocate $200 million in K-12 spending. Pritzker’s budget also relies on the passage of the tax plan to implement a 5 percent funding increase for public universities and community colleges, as well as funding for school districts, the senior-based community care program, state employee group health insurance and more initiatives.

“But as important as these investments are, we cannot responsibly spend for these priorities until we know with certainty what the state’s revenue picture will be,” Pritzker said.

Regardless of the potential graduated tax, Pritzker’s budget proposes the state will contribute $8.6 billion to the state’s pension fund, increase funding for the Department of Children and Family Services by 20 percent and dedicate a $50 million increase to the Monetary Award Program, which helps undocumented and transgender residents pay for college.

“One of the moral tests of government is how we treat our most vulnerable,” Pritzker said, referring to DCFS funding. “The funding needs of DCFS should transcend party and partisanship and be a cause we can all rally around.”
Several of Evanston’s elected representatives were supportive of the governor’s proposed budget. State Sen. Laura Fine (D-Glenview) said she appreciated the way he emphasized unity over partisanship.

“I’m going to focus on it in a positive fashion and really look at it as the way the governor proposed a budget (as) a set of moral values, because he’s focusing on human services, he’s focusing on child care, on criminal justice reform, on education,” Fine told The Daily. “These are really issues that are the moral compass of our state. And it’s refreshing to see that we have a governor who’s on that same page.”

Fine said she particularly is interested in the part of the budget devoted to pensions. She said the pension fund takes up a large part of the budget each year, so budgeting it as soon as possible will allow for resources to be allocated to other areas, such as human services and higher education.

Pritzker also proposed building up reserves in the Budget Stabilization Fund, or the Rainy Day Fund. Comptroller Susana Mendoza and State Sen. Heather Steans (D-Chicago) recently proposed legislation to make automatic monthly transfers to the state’s rainy day fund. In his address, Pritzker referred to this proposed legislation and called Steans “one of the General Assembly’s most responsible budgeteers.”

Steans said in a statement she looks forward to working with the administration to negotiate a budget. She said the governor’s budget proposal is a good place to begin, with its emphasis on employee health care, education, human services and the child welfare system.

“It also fully funds our pension systems and shores up the state’s rainy day fund to better position Illinois for an economic downturn,” she said in the statement.

However, she also said she hopes lawmakers can find a way to fund education through a different source, rather than through the reserve fund the governor proposed.

The General Assembly will now work to decide which parts of the governor’s proposal to implement. Fine, who sits on the Senate Appropriations Committee, said this process is starting now and will go through the end of May. She said the goal is to create a package of legislation that incorporates the House, the Senate and the governor’s interests and can get bipartisan support.

“No amount of wishful thinking will wave away our structural deficit or our pension obligations,” Pritzker said. “No amount of lip service will balance the budget or fund our schools or improve public safety.”

Email: [email protected]
Twitter: @delaneygnelson