7 Billion Budget Plan with Tax Increases Aimed at Businesses

In a recent address to the General Assembly, Democratic Gov. J.B. Pritzker introduced a $52.7 billion budget plan for the upcoming fiscal year. The plan includes over $800 million in tax increases targeting businesses, extending to large corporations and state-regulated sportsbooks.

Pritzker's proposal outlines various strategies to address the state's financial challenges, including a long-term plan to tackle the massive pension debt by raising the funding target to 100% from 90% and extending the payment deadline to 2048. To combat a projected deficit amid slowing revenue growth, the governor is suggesting significant tax hikes. This includes more than doubling the state tax on sports wagers, generating an estimated additional revenue of $200 million, and extending the cap on losses that large corporations can write off on state income taxes, estimated to bring in an extra $526 million annually.

Furthermore, Pritzker aims to permanently repeal the 1% sales tax on groceries, previously suspended for a year in 2022, eliminate tax discounts for retailers collecting sales tax, and seek to maintain a balanced budget without direct tax increases on Illinois residents. In his speech, the governor acknowledged the tough choices and emphasized the need to keep the state's fiscal house in order.

The budget proposal focuses on boosting early childhood education, expanding housing support programs like Home Illinois, and increasing funding for healthcare services, including a program to erase medical debts for Illinois households. The proposal also includes a new child tax credit for working families with young children.

Pritzker's budget plan sets the stage for negotiations with state lawmakers before the new fiscal year commences on July 1. The proposed spending from the state's general fund sees a 4.6% increase over the previous year's approved budget. As Pritzker navigates spending pressures and rising costs, his administration aims to prioritize key areas while providing some relief to low-income residents across Illinois.