Democratic Gov. J.B. Pritzker touted his efforts to stabilize Illinois’ finances and offered voters a near $1 billion package of temporary tax relief in a reelection year budget address that also served up a defense of his leadership during a term clouded by a once-in-a-century pandemic.
In the last combined budget and State of the State speech of his first term, Pritzker delivered a fusillade of criticism at Republicans, saying he and the legislature’s Democratic majority will continue to defend against GOP encroachment on voting and women’s reproductive rights and promote the science he says guided his handling of COVID-19.
“Leadership in times like these does not dance idly wherever the wind might blow. Leadership in times like these means having the courage to stand on deck while the waves crash around you and you keep the ship pointing toward home,” Pritzker said.
“The state of our great state is strong, unbreakable and enduring,” he said.
In response to the speech, Republicans accused Pritzker of presenting an overly rosy picture of the state’s finances, using “gimmicks” to appeal to voters rather than structurally overhauling spending and offering a plan to benefit his reelection more than the state.
The pandemic kept Pritzker from delivering his speech to the full General Assembly at the Statehouse last year, but on Wednesday it was the hazards of a snowstorm that had him giving a largely virtual performance from the Old State Capitol building, the home of Abraham Lincoln’s “House Divided” speech.
Only about 30 people watched while seated at wooden desks with decorative old-fashioned feather pens and candles, among them Lt. Gov. Juliana Stratton and a handful of legislators including House Republican Leader Jim Durkin of Western Springs.
But Pritzker’s address was clearly aimed at a larger external audience — from voters to credit-rating agencies — as he defended his stewardship of the state during the pandemic as well as his efforts to promote a progressive agenda of restorative justice and social and economic change aimed at helping long-underserved racial and ethnic communities.
With increased state tax revenues bolstered by federal pandemic relief funds, Pritzker’s $45.4 billion budget proposal for the year that begins July 1 offered voters one year of relief from an inflationary bump in gasoline taxes and the local sales tax on groceries, and an expanded property tax benefit to homeowners.
Pritzker’s proposal also would add $500 million to the state’s minimum $9.6 billion contribution to its woefully underfunded public employee pension funds. The additional funding would reduce the overall long-term $140 billion unfunded liability by $1.8 billion. Another program allowing pensioners to buy out their benefits will save another $1.4 billion, the administration said.
Pritzker said the state’s pension payments have flattened as a percentage of the total budget and are projected to decline in the future.
Pritzker’s budget also would put $879 million into the state’s “rainy day” fund, which totaled a paltry $5.7 million at the end of the 2021 budget year, the smallest such fund among all of the states. It would be the first contribution into the fund in 18 years and would count on a recurring $79 million in future years from state cannabis tax receipts.
Pritzker’s budget would increase funding to grade schools and high schools by $350.2 million — in line with a statutory requirement adopted with changes in the state school aid formula. Overall, base funding for schools has increased more than $1 billion during Pritzker’s tenure.
All told, the administration said its plan would pay off $4 billion in debt this year and next, including COVID-related borrowing, a reduction in unpaid bills including state employee health insurance and covering a shortage in the state’s College Illinois prepaid tuition program.
The budget is buoyed by projections of increased revenue in sales and income taxes, tax levies on cannabis sales and from corporate income. Despite the influx of money, the budget does not launch any programs that would be ongoing and could be fiscally unsustainable in subsequent years, administration officials said. They also said their revenue outlook was conservative and that even more revenue could end up flowing into state coffers.
In an appeal to voters, Pritzker’s plan would suspend the 1% sales tax on grocery items, a tax that goes to local governments. The state would make up the $360 million lost to municipalities. The proposal also would suspend a scheduled 2.2 cents per gallon inflation-based increase in the gasoline tax at a cost of $135 million, and would provide $475 million in property tax rebates.
Already, the politically powerful International Union of Operating Engineers Local 150 has come out against the gas-tax freeze, contending it would short-circuit a state constitutional guarantee to use highway-related taxes for infrastructure repairs. The union argues instead for a reduction in the state sales tax on gas, but those revenues go to the state’s general bankbook. Pritzker said an influx of federal infrastructure funds would allow projects to go on without delay.
Republicans derided Pritzker’s tax relief proposals as “election-year gimmicks” and noted they would come only after voters in the November 2020 election rejected the governor’s major agenda item — shifting the state from a flat- to graduated-rate income tax — amid fears stoked by opponents that it would lead to higher taxes for everyone.
After the speech, Durkin said the governor gave one of the most “bitterly partisan” State of the State speeches he’s witnessed and said his proposals won’t benefit Illinoisans who are being “squeezed terribly through inflation.”
“This is a wish list. Every governor’s speech at the beginning of a fiscal year is a wish list. And this clearly is a governor’s wish to get reelected at any cost,” Durkin said.
In advance of his address, the Republican minority in the state Senate proposed the complete elimination of the local sales tax on food and drugs, a reduction in the state sales tax on gasoline along with an increase in the share of dollars that go into the road construction fund, a permanent boost in the property-tax credit to homeowners and doubling the $1,000 senior citizen income tax exemption.
But Republicans did not say how they would make up for the loss of local revenue, which could create added pressure to raise local property taxes.
Pritzker did not address calls from the business community to tap into a pool of billions of dollars in federal relief funds to help pay down a portion of the state’s $4.5 billion debt to the unemployment insurance trust fund, which was used to pay for jobless benefits during the pandemic. The administration said negotiations are ongoing, but that it is committed to using a “significant amount” of the remaining federal aid to fill part of the hole.
Pritzker said he knew Republicans would argue the state’s healthy budget situation was propped up by federal coronavirus relief but contended fiscal stability would have been achieved even without help from Washington.
The governor’s proposal calls for spending an additional $535 million in the coming year from the $8.1 billion in aid Illinois received under President Joe Biden’s American Rescue Plan. That would leave the state with roughly $3.5 billion from the pool of money at the end of next budget year.
In a warning to GOP lawmakers ahead of negotiations with the General Assembly’s Democratic majority, Pritzker said: “During this budget cycle especially, seats at the grown-up table will be off-limits to those who aren’t working in the public’s best interests.”
Republicans have used recent outbreaks of violent crime to attack Pritzker and Democrats, contending their criminal justice reforms have fueled the spike — though many of the Democratic initiatives, such as the elimination of cash bail, have yet to take effect.
Recognizing the GOP message could take hold among critical suburban swing voters, Pritzker proposed allocating $240 million, largely from federal pandemic relief funds, toward community-based violence prevention. That’s close to the total of $250 million he pledged to spend over three years when signing violence prevention legislation last fall.
The money would be targeted toward organizations that tackle the root causes of violence and specialize in outreach to people most at risk of being either a victim or perpetrator.
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The governor in November issued an executive order that declared gun violence a public health emergency and called for more resources for these outreach groups. The order created the Office of Firearm Violence Prevention through the state’s Department of Human Services, which will oversee the grants that get awarded to street outreach groups across the state.
Pritzker also is proposing an $18.6 million increase to the Illinois State Police budget to hire and train an additional 300 troopers, an additional $10 million in grants for local law enforcement agencies to purchase body cameras as required under the criminal justice overhaul he signed last year, and $20 million to fund a new protection program for witnesses of gang crime.
“Crime is a complex and multifaceted problem to tackle, and it’s cynical and counterproductive to simply shout ‘Lock them up’ while providing fewer resources to the people and programs that prevent crime in the first place,” Pritzker said in his speech.
“A truly effective approach to tackling crime involves both short-term and long-term investments and a commitment to see those investments through,” he said.
In another reelection year theme, Pritzker sought to contrast his tenure with that of his predecessor, former one-term Republican Gov. Bruce Rauner.
Rauner engaged in a two-year ideological fight with the Democratic-led legislature over his anti-union initiatives as Illinois went a record two years without a budget, leading to credit downgrades, an explosion in the state’s unpaid overdue bills to vendors and sharp cuts to social service and support programs.
Rauner allies are now aligned with one of Pritzker’s prospective opponents, Aurora Mayor Richard Irvin, one of five candidates seeking the GOP nomination in the June 28 primary. In a statement, Irvin called Pritzker “the tax-hiker-in-chief” and accused him of trying to divert attention from his failed change in the income tax system by offering tax breaks that rely on “a disappearing federal bailout.”
“We know he plans to raise billions more in taxes when the federal money runs out,” he said.
The other Republicans in the race are Bull Valley businessman Gary Rabine, Petersburg venture capitalist Jesse Sullivan, state Sen. Darren Bailey of Xenia and former state Sen. Paul Schimpf of Waterloo.
In a fundraising email, Sullivan accused Pritzker of trying to “bribe voters with fake tax relief” in the face of rising crime, job losses and students being “locked out” of schools during the pandemic. He said Pritzker’s use of federal relief money for community-based violence prevention groups amounted to funding “radical political organizations.”
Rabine contended Pritzker’s budget reflected the beliefs of an “out of touch” billionaire and that Illinois remained in a “fiscal death spiral.” Rabine, who has spread disinformation about the efficacy of coronavirus vaccines, blamed Pritzker’s “heavy-handed, unilateral decision to shut down the state’s economy” for the loss of “hundreds of thousands of jobs.”
Schimpf called Pritzker’s tax relief proposals an “illusion,” saying that he offered the temporary grocery tax cut, but “I doubt the governor knows the cost of a gallon of milk.”
Bailey also sought to paint Pritzker as out of touch with working families, saying of the proposed tax relief that “deciding not to take an extra couple of pennies from them, I think is a slap in the face.”
Rather than address his GOP rivals individually, Pritzker sought to paint the entire field with a scathing criticism of his take on Republican ideology.
“At a time when politicians in some places have dipped their toes into the waters of sedition, or pulled chairs up for the ghosts of Jim Crow, or spurned the fires of educational curiosity in favor of book banning, or are telling women you have to take your reproductive health choices back to the 1950’s, at a time when some would question the very foundations of science and medicine, at a time when some would condemn simple acts of courtesy and kindness like wearing a mask so that fewer people die, this government in this state said, ‘Not here,’ ” Pritzker said.
He accused Republicans of using an old playbook of relying upon fear and blame.
“The din of a crisis is when a carnival barker’s shout becomes a whisper soft enough to find the ears of the sick or worried or grieving or scared, and the poison they worm into the hearts of the vulnerable is that it’s ‘those people,’ the ones who live in that city, the ones who worship at that altar, the ones who were born in that place who are responsible for the hard times,” he said.
“Maybe the clarity that grief and struggle bring will allow us to cast off the old parts of our lives that never served us well to begin with. Maybe the resilience we’ve found facing a once-in-a-generation challenge has opened a path to new and better things,” he said.
Jeremy Gorner reported from Springfield.