Officials React to Pritzker’s State Budget Address

Gov. J.B. Pritzker on Wednesday delivered his first budget address in which he proposed increasing spending on education, social services and public safety while also stabilizing the state’s crippling financial problems.

In the short term, Pritzker plans to free up money by extending payments to the state’s pension fund over a longer period of time – a plan that would reduce payments in the short term but ultimately cost more.

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Down the road, Pritzker hopes to tap new sources of revenue by legalizing and taxing recreational marijuana and sports betting.

But his plan to restore the state to financial health is ultimately predicated on moving Illinois to a graduated income tax – a process that requires a constitutional amendment and ratification by voters.

So, how realistic is that?

Here’s what a handful of politicians and officials had to say about Pritzker’s budget proposal:

House Speaker Michael Madigan

“After four years of unprecedented crisis, we are still uncovering the extent of the damage to our state’s budget. Bruce Rauner’s budget crisis has left us with billions of dollars in unpaid bills, frayed our social service infrastructure and squandered $1 billion on late payment penalties instead of funding our schools, health care and critical human services. Without the efforts of House Democrats and some rank-and-file Republicans who worked together to make tough decisions and end Rauner’s crisis, the damage would have been even worse.

“Amid the challenges we heard spelled out today, we also heard that we now have a governor who recognizes the magnitude of these challenges and will work with us to address them. House Democrats stand ready to work with Gov. Pritzker and our Republican colleagues, bring all options to the table for honest negotiation, make the tough decisions, continue to stand strong and protect critical human services and quality schools and move Illinois forward.”

Mark Denzler, president and CEO of the Illinois Manufacturers' Association

“In order to grow and provide more middle-class jobs, Illinois manufacturers need financial stability from state government, including a budget that doesn't spend more than taxpayers can afford or rely on gimmicks that will only cost more in the long run.

“While we applaud the focus on education and workforce development, this budget has a structural deficit of $3.2 billion and continues to kick the can down the road on pensions.
It's past time for lawmakers and the administration to make some tough decisions in order for Illinois to become a more attractive place for businesses to locate and expand. We stand ready to work collaboratively toward that goal.”

State Sen. Heather Steans, D-Chicago

“Having the governor propose a balanced budget is a positive step toward restoring stability to our state and ensuring long-term functionality within our government. Illinois continues to face structural budget challenges, and I am encouraged that Gov. Pritzker is addressing them head on.

“I look forward to working with the administration and my colleagues in the Senate over the next few months to develop a budget that significantly moves Illinois toward a solution that achieves financial certainty and builds trust that Illinois is back on the right track.”

John Tillman, CEO of the Illinois Policy Institute

“Illinois’ finances are failing, and we know the reason: Overspending that has created perpetual structural deficits since 2001. For decades politicians have prescribed the wrong remedy. Tax hikes and excessive borrowing have not worked. And yet Gov. J.B. Pritzker just promised more of the same failed remedies.

“Pritzker has the power to course correct, ending this vicious cycle that has bankrupted Illinois and driven away thousands of her people. Lawmakers and experts all know what must be done to save this state. Balancing budgets long-term through spending reform is the only policy that will work. To reform spending, politicians must come together to modernize Illinois’ pension system. There is no other way.

“Make no mistake, a progressive income tax is a middle-class tax hike. Instead, Illinois lawmakers should focus on ending the pension crisis and reining in spending.”

Laurence Msall, president of The Civic Federation

“The governor proposes to close his $3.2 billion operating deficit primarily by increasing revenues by about a billion dollars and reducing expenditures by $2.3 billion. I think part of that reduced expenditure is reduction of the pension contributions. That is a great concern to the Civic Federation.

“In a nutshell, the governor deserves some credit for coming forward with a budget that covers the breadth of the financial challenges that the state presents, but what he is doing with the pensions and the lack of detail and transparency on them are a grave concern to the Civic Federation.”

Amanda Kass, associate director of the Government Finance Research Center at the University of Illinois at Chicago

“I really liked the emphasis on trying to move forward in a bipartisan manner. I like that he emphasized that there’s a real financial wreckage caused by the two-year impasse that we have to pay for and get out of. It seemed clear that a big priority of his is getting a graduated or “fair” income tax as he referred to it.

“He also proposed changes to the pension system that would reduce the state’s 2020 contribution. My concern is that he’s proposing to increase spending in a number of important priority areas, but doing so without having increased revenue from overhauling the tax structure in place and by freeing up money by shorting the pension systems.

“I don’t think it’s a wise idea to increase spending – even if the spending is laudable and desirable – without having that revenue in place. And I don’t think getting revenue from decreasing the pension contributions is prudent. It’s similar to what past governors have done over and over again.”

Adam Schuster, director of Budget and Tax Research at the Illinois Policy Institute

“Overall, I think the governor laid out a number of good goals, including improving educational outcomes, stabilizing the state’s finances, reducing the tax burden on hard-working Illinois families and growing our economy. However, I think the means to achieve those goals are in some cases counterproductive and in others simply won’t achieve what he wants.

“The earliest a progressive tax could take effect and for the state to actually get revenue from it would be FY 2021.

“We think it is taking Illinois in exactly the wrong direction. More states have gone in the other direction to go from a progressive to a flat tax in recent years, and the only state that went from a flat tax to a progressive tax is Connecticut. They’ve seen bracket creep where taxes have gone up on everybody, including the middle class, not just the wealthy.

“A progressive tax is the wrong way to go. We should be talking about structural spending reform that brings our government in line with what we can afford under our current tax structure.”

Related stories:

Illinois Minimum Wage to Rise to $15 by 2025

Illinois Lawmakers Debate Financial Steps Amid Pritzker Deficit Report

Chicago’s Big-Time Business Club Calls for State Tax Increase

Lessons From the Governor Who Instituted Illinois’ First Income Tax

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