(The Center Square) – Gov. J.B. Pritzker says the message being sent by a memo directing state agencies to anticipate $800 million less to spend than what he proposed is that he will not sign an unbalanced budget.
In February, Pritzker proposed spending $52.7 billion. Last week, his administration sent agency directors a memo saying the $1 billion in tax increases he proposed aren’t popular and to anticipate they won’t be approved.
“And so we’ve got to balance the budget and that’s the real message that I think everyone in the legislature knows that I’m sending,” Pritzker said at an unrelated event in Chicago Monday.
Included in the pushback Pritzker said he’s heard about his proposed tax increases were those that doubled the tax on sports betting companies for an estimated $200 million in new revenue.
“There’s some people who think that the increase in the sports betting percentage tax is against sports bettors themselves, that’s not the case,” Pritzker said. “It’s only on the sports betting companies.”
Another measure he proposed in February impacts business loss deductions for an estimated $526 million.
“Somewhat complex, net operating loss carryforwards, not everybody is familiar with those,” Pritzker said. “But we actually have lowered the tax on … net operating loss carryforwards from what it had been. There had been limitation of $100,000. We raised that limitation to $500,000 so more companies could take deductions on their taxes.”
Other tax increases included capping the discount retailers get for collecting and remitting sales taxes worth $101 million and adjustments to the individual income tax standard deduction worth $93 million.
“We’re hoping that people come to a better understanding of it or they decide to make changes to the budget,” Pritzker said.
State Rep. Blaine Wilhour, R-Beecher City, said it’s now up to the Democratic supermajority.
“Are they actually going to stand their ground on preventing $800 million in taxes and fee increases and do the fiscally responsible thing, which is to finally cut our spending? Or are they going to fall prey to this governor who likes to throw his weight around,” Wilhour said at a news conference Thursday.
Wilhour further quoted from the Pritzker administration memo about federal American Rescue Plan Act tax dollars from the COVID-19 pandemic that are expiring.
“As you prepare, keep in mind that the end of access to federal ARPA funds make it impossible to sustain many programs without additional revenue,” Deputy Governor for Budget and Economy Andy Manar said in the memo.
“Who would have thought that we were taking in all these federal funds and creating programs that are going to be going into perpetuity,” Wilhour said. “That’s becoming a problem here. We said this was going to happen. Now here we are.”
The Illinois House and Senate return Tuesday. They must pass a balanced budget with simple majorities by May 31.
