Pritzker signs budget with tax freezes, long-term investment

FILE – Illinois Gov. JB Pritzker praises the budget passed by the lawmakers during a news conference in his office at the Illinois State Capitol in Springfield, Ill., Tuesday, June 1, 2021. (Justin L. Fowler/The State Journal-Register via AP)

By JOHN O’CONNOR for the Associated Press

SPRINGFIELD, Ill. (AP) — Gov. J.B. Pritzker on Tuesday signed into law a state budget that aims to soften the blow of inflation with $1.8 billion in tax breaks and direct payments to Illinois consumers, an outline Republicans derided as an election-year ploy.

The $46 billion budget plan for the fiscal year that starts July 1 also makes substantial investments in debt and savings backed by tax revenues virtually no one predicted a year ago amid a worldwide coronavirus pandemic.

Pritzker, who faces reelection this fall, said in a news release from Chicago that the fiscal outline “brings real improvements to the lives of working families and sets us up for a stronger fiscal future.”

He said the funding for schools, updated highways and transportation systems and paying down obligations in the state pension programs, “are the kind of priorities we can invest in when our state is governed responsibly.”

Pritzker rolled out his plan in February, when national inflation was at about 7% — the highest in 45 years. The package includes tactical strikes at rising prices: suspending the 1% grocery sales tax, freezing the motor fuel tax increase and offering a one-time $350 property tax refund, totaling $970 million in money consumers could keep or get back.

Legislative Democrats wanted to sweeten the pot and expanded the governor’s proposal by nearly $1 billion, adding among other things such as income-based direct payments of $50 and $100 per child, up to three; and a sales tax holiday on back-to-school items this summer.

Republicans questioned Pritzker’s motives.

“This budget is nothing more than a campaign tool for Pritzker and the Democratic Party,” Senate Minority Leader Dan McConchie of Hawthorn Woods said in a statement. “Providing one-time checks to people in the mail right before their names appear on the ballot and expire right after the Election is a disgrace.”

But it’s not all spending. Pritzker set aside a $500 million payment to debt-heavy pension programs over and above what’s called for next year, which saves $1.8 billion down the road. And the budget replenishes the Budget Stabilization, or “rainy day” account, with an unprecedented $1 billion.

McConchie also attacked a law Democrats approved that requires gas stations to post notices about the freeze on the motor-fuel tax to ensure buyer see the savings.

The freeze on the motor fuel tax, which in 2019 was increased for the first time in 30 years and indexed to inflation so it would keep pace with rising construction costs its funds, had other detractors. Transportation proponents argued that losing the expected income would put needed infrastructure projects dangerously behind.

So Pritzker and Democratic lawmakers will replenish the road fund with the anticipated loss of $140 million — by back-filling it with money set aside to clean up leaking underground storage tanks, which threaten water supplies and cause other problems. The Leaking Underground Storage Tank fund comes from a separate tax on gasoline and is used to reimburse land owners who remediate fuel spills at abandoned sites after a $10,000 deduction. It already owes $900 million for completed work.