A breakdown of the Budget and proposed taxes

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“This budget I present to you today is an honest proposal,” touted Governor J.B. Pritzker Wednesday. “The costs are not hidden, the revenues I propose are not out of reach, and the hole we need to fill is not ignored.”

With that, Pritzker engaged in a roughly 40-minute sales pitch for his vision for the state’s budget and future.

Governor Pritzker knows his biggest goal – a graduated income tax plan – will take a few years to work through economically and legally.

In the meantime, he’s planning a few things to help Illinois start to climb out of it’s fiscal hole.

“Our state does well when our people do well,” he continued. “I want to be clear about this: This fiscal year 2020 budget is balanced, but that’s not enough.”

For starters, there’s an extra $100 million in birth-through-five block grants, $375 million more for under-resourced schools (aka evidence-based funding), and a $50 million addition proposed for college MAP grants.

Then, Governor Pritzker proposes some $271 million in additional funding for various Department of Human Services projects, including an expansion on state Child Care Assistance programs, among others.

All the proposals sound good, at least on paper. But with all these extra spending comes the inevitable question of how it will be paid for.

“What was interesting for me to note was that, as he (Gov. Pritzker) progressed and talked about some of the other taxes, he paused and looked around for reinforcement,” quipped Morton Rep. Keith Sommer. “He got none.”

A proposed tax on plastic bags in stores – which would charge at a rate of about $0.05 per bag – is estimated to bring in anywhere from $19-23 million.

The tax revenue would likely go back into the general revenue, rather than towards a specific fund, in an attempt to make Illinois more ecologically- and environmentally-friendly.

There’s also a proposed increase on tax for tobacco products (by 32 cents per pack of 20 cigarettes) and a change in tax code to bill e-cigarettes at the same rate.

Those changes would bring in an estimated $65 million annually for the Healthcare Provider Relief Fund, and both the e-cig and bag taxes have already been implemented in Chicago.

All that doesn’t include the proposed new forms of revenue: legalized recreational marijuana, sports gambling, and the introduction of Managed Care Organization Assessments.

“You have to insure that the revenue from those resources are going to offset some of ills that come from looking at raising revenues through people’s vices and things of that nature,” said Peoria Rep. Jehan Gordon-Booth.

If passed, each of those three revenue sources would bring in a few hundred million dollars a year.

If you’d like to read more of the proposed budget, click here.

mdowling

mdowling

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