Governor J.B. Pritzker delivered his first Budget and State of the State Address to a joint session of the Illinois General Assembly in Springfield on Wednesday, February 20th.
The Governor’s introduced Fiscal Year 2020 budget proposal estimates general funds revenue at $38.9 billion and proposes $38.7 billion in general funds spending. To help close a $3.2 billion budget deficit, the Governor is proposing pension savings through a ramp extension, new revenues through taxes on new and existing services, and closing so-called “corporate loopholes.” Altogether, the Pritzker Administration estimates a $1.5 billion increase in revenue over FY19.
The Governor’s introduced Fiscal Year 2020 budget proposal estimates general funds revenue at $38.9 billion and proposes $38.7 billion in general funds spending. To help close a $3.2 billion budget deficit, the Governor is proposing pension savings through a ramp extension, new revenues through taxes on new and existing services, and closing so-called “corporate loopholes.” Altogether, the Pritzker Administration estimates a $1.5 billion increase in revenue over FY19.
House Republicans had hoped that Governor Pritzker would deliver an austere budget that cuts spending and forces the State to live within its means. Unfortunately, the Governor called for more taxes, more spending and more borrowing. This is just more of the same from the failed Democratic playbook that has resulted in record debt and has driven families and jobs out of Illinois.
As expected, Governor Pritzker called for the passage of a progressive income tax to fund state government and help pay down Illinois’ massive unfunded pension liabilities. The Governor did not provide details on what the tax rates and tax brackets would look like, leading many to believe that this tax hike will hurt middle-class families, who were hit with a 32% income tax hike just two years ago.
In addition to his call for a progressive income tax, the Governor’s budget proposal includes new revenues from a tax on e-cigarettes and plastic bags, higher cigarette taxes, the legalization of sports betting, and the selling of licenses for legalized marijuana.
Governor Pritzker also introduced a five-point plan to address the State’s $130 billion in unfunded pension liabilities. The Pritzker pension plan includes more borrowing, pseudo-pension holidays, and the sale of State assets to offset liabilities. It would smooth and flatten payments into the pension systems, adding seven years to the pension system amortization schedule, which would extend the 90% funding ramp to 2052.
The Governor’s proposal fails our pension systems, offers no substantive reforms to strengthen them or relieve the long-term budgetary stress on the state budget. Reducing Illinois’ annual pension contribution by $878 million through the ramp extension just kicks the can further down the road. In fact, these are the same pension gimmicks that Gov. Blagojevich relied on for his phony budgets for years.
Governor Pritzker’s proposed budget fails Illinois families. It offers no property tax relief. It does nothing to help Illinois businesses create and retain jobs. It will not help us dig out of the fiscal hole created by decades of failed Democratic rule. We can and must do better.