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Gov. JB Pritzker

Gov. JB Pritzker speaks in May 2020.

Justin L. Fowler

Illinois Gov. JB Pritzker’s Budget Plan Won't Push For An Income Tax Hike For Next Year

Illinois Gov. JB Pritzker’s 2022 state budget proposal won’t include an income tax hike, but it will seek the elimination of $900 million in business tax credits and aims to hold spending at current levels, the governor’s office said Tuesday.

The Democratic governor will present his budget outline on Feb. 17. It’s Pritzker’s first spending plan since the November defeat of his constitutional amendment to impose a graduated income tax.

The outline he will present to lawmakers for the state fiscal year that begins July 1 includes a $3 billion deficit – less than the $5.5 billion originally forecast.

The less dire financial picture comes as state income and sales taxes – the two main financial propellants of the state budget – did not bottom out as seriously as initially believed because of the economic consequences of the pandemic.

“There is no question that this budget will include painful choices, but as the effect of the pandemic diminishes over the coming months, the governor will continue to focus on economic recovery for the hardest hit,” Pritzker spokeswoman Emily Bittner said in a statement.

“The governor will also continue to advance long-term structural budget improvements that continue the stronger fiscal trajectory Illinois was on before the pandemic,” she said.

The budget framework Pritzker’s office released Tuesday did not include any specifics on what particular “corporate tax loopholes” he intends to close, an issue that undoubtedly will mean a fight with state business groups this spring.

The governor’s budget proposal also will include full funding to cover the state’s $10 billion-plus mandated pension costs.

After the failure of his tax amendment, Pritzker imposed $700 million in spending cuts on state government, and those reductions will remain in place in the new budget year under his plan. The cuts targeted grants to several state agencies, the purchases of new vehicles for the state’s fleet, caps on employee travel and negotiated furloughs with labor unions.

But the plan Pritzker intends to move forward with this spring doesn’t appear -- at least initially -- to be as dire as what he signaled might lie ahead after the defeat of the graduated income tax amendment.

“There will be cuts and they will be painful,” Pritzker ominously warned after the election results came in. “And the worst thing is the same billionaires who lied to you about the fair tax are more than happy to hurt our public schools, shake the foundations of our cities and diminish our state. Maybe because they think it won’t hurt them.”

Dave McKinney and Tony Arnold cover Illinois politics and government for WBEZ. Follow them on Twitter @davemckinney and @tonyjarnold.

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