Budget balancing act? Pritzker signs $53.1 billion spending plan, dismisses Democratic discord

Gov. J.B. Pritzker on Wednesday downplayed Democratic divisions as he signed a sweeping $53.1 billion budget that relies on $1.1 billion in revenue and includes a child tax credit.The signing of the spending plan in the West Loop’s State of Illinois building featured no fanfare — unlike Pritzker’s last two budgets, in which he stood flanked by cheering rank-and-file Democratic lawmakers.But Pritzker swept away the notion that the low-key event was due to any intraparty feuds, saying he is backed by House Speaker Emanuel “Chris” Welch, D-Hillside, and Illinois Senate President Don Harmon, D-Oak Park, who stood alongside him, in addition to House Speaker Pro Tempore Jehan Gordon-Booth, D-Peoria, state Sen. Elgie Sims, D-Chicago and Lt. Gov. Juliana Stratton. The signing came a week after the Illinois House with a 60-45 vote. Some lawmakers were upset about the taxes it contained, and that the governor’s office didn’t want to reduce overall spending in the budget. But Democratic leaders were able to scrounge enough support for the plan. “There was a lot of agreement, and these are folks who are leaders of their caucuses, leaders in the General Assembly,” Pritzker said of Welch and Harmon. “So when they’re here, they’re representing the vast majority of their caucuses, if not their entire caucus.”The Democratic-led supermajorities in the House and Senate last week approved the budget, which included a $200 million ; capping the discount that retailers receive for collecting sales tax at $1,000 per month; and extending limits on the amount of operating losses corporations can write off on their income taxes — a maneuver estimated to generate another $526 million for the state.The budget also eliminates a 1% grocery tax and includes a $50 million child tax credit to help families with children under 12 who receive earned income tax credits. It sends $198 million to the state’s “Rainy Day Fund”; $14 million to create a new department of early childhood; and $500 million to build a This year’s budget was no easy feat, and next year’s is expected to be even more challenging as the state nears a looming fiscal cliff. Transit agencies in northeastern Illinois will face an expected budget deficit of $730 million in 2026, as ridership remains below pandemic levels and as federal funds expire.The state must also grapple with a pension crisis — and this year’s budget did not include any meaningful efforts to reform the system. The budget funds the full $10.1 billion required by state law to bring the $140 billion in long-term pension debt to 90% funding by the year 2045. Pritzker included a pension reform proposal in his February budget, which would add another few years onto the “ramp” of increasing payments into the funds — but bring the state’s pension systems to 100% funding by 2048. Lawmakers did not include that proposal in this year’s budget.“I certainly will make sure that it gets a hearing, and I expect that we’ll be able to do something that will put us in even better fiscal shape than we already are in,” Pritzker said.Republicans have repeatedly derided the budget, saying Democrats are adding new programs that the state can’t afford, instead of making meaningful cuts that will ultimately help taxpayers. They also feel left out of the process, with the supermajority — and Pritzker’s office — taking control of budget priorities.There were also partisan potshots. In both the House and Senate debates, Republicans cited the budget’s inclusion of $182 million in funding for migrants and $440 million in health care costs for undocumented people as proof that the budget prioritizes noncitizens.. Illinois Republican leader John Curran, Downers Grove, on Wednesday accused Pritzker of raising taxes on “Illinois families and businesses to pay for the migrant crisis.”“In six short years, Gov. Pritzker has raised the cost of state government by over 30% and expanded noncitizen spending from a few million dollars per year to nearly a billion dollars per year today,” Curran said. “It is grossly unfair for Gov. Pritzker to raise taxes on Illinois families and businesses to pay for the migrant crisis he created.”For its part, the governor’s office said the budget includes tax benefits for businesses, including the change in net operating loss deductions for corporations that is more generous for businesses in that it will allow up to $500,000 in losses to carry over, which will result in tax savings. It also cites the franchise tax repeal, which the governor has increased four times since 2020. A business and development package cleared by lawmakers will extend the state’s research and development tax credit until 2032, create a tax credit for quantum companies and extend the Economic Development for a Growing Economy, or EDGE, tax credit from 10 to 15 years. The budget implementation and the revenue bills must be signed before the fiscal year begins July 1.