On Thursday, a respected tax and budget watchdog hailed Governor JB Pritzker’s budget proposal for prudent spending and bill paying just hours before the Senate approved a debt-reduction package as part of a proposed $45.4 billion spending plan.
Analysis by the nonpartisan Civic Federation fueled celebration by Pritzker and Democratic lawmakers after the Legislature, over objections from minority Republicans, approved the use of $2.7 billion in federal money from Pandemic relief to fill the $4.5 billion hole in the Unemployment Insurance Trust Fund battered by COVID-19 business closures.
The proposal, which Pritzker hoped to sign Thursday night, also reimburses $898 in overdue employee group health insurance claims, pays $230 million for uncovered liabilities in the College Illinois Savings program and puts a $300 million down payment. dollars on the retirement of long underfunded employees. accounts.
“Today our bills are being paid on time. Our most pressing short-term debts are almost gone,” Pritzker said at an afternoon news conference. “Our credit ratings are up and our most critical long-term financial liabilities are in the best financial shape they’ve been in since before the turn of the century.”
Civic Federation President Laurence Msall said it was good news that tax revenues that rebounded much faster than expected from the pandemic ended up in overdue bills – and an unprecedented $900 payment. million dollars in a fund for rainy days.
The budget marks significant progress in eliminating debt problems that prohibit long-term planning, Msall said, but more is needed.
“Without the pressure of a budget deficit and billions of dollars in unpaid bills, the state should take this opportunity to put forward a long-term vision of how it will maintain fiscal balance and financial stability in the future. “, says the report.
Republicans have widely opposed the debt repayment legislation, which the House approved Wednesday night, arguing that the entire debt should be paid immediately using the $8 billion proceeds the state received of Washington to tackle pandemic issues. Finding the money to pay the balance will mean higher unemployment taxes for businesses and shortened benefits for future recipients.
But Rep. Jay Hoffman, a Democrat from Swansea, said the final solution had to come to an agreement between business and labor leaders. Nothing will be approved without their agreement.
Pritzker’s election-year budget plan includes tax relief that he says will help consumers weary of high inflation. The Civic Federation approves most of the proposal, which includes a one-year suspension of the 1% sales tax on groceries and a one-time rebate of about $300 per homeowner on property taxes.
But Msall said a plan to halt a fuel tax cost-of-living hike to pay for roads, bridges and other transport-related improvements is a departure from the thoughtful and forward-thinking approach the future of the rest of the budget. The gas tax was indexed to inflation in 2019 to keep pace with costs and was set to rise to 41.4 cents per gallon on July 1.
“The first time inflation seemed to be going up, the state said, well, we weren’t really serious…” Msall said. not afford it, it is very difficult to stop.
Transportation advocates agree. Although it would only cost the state $135 million, they say the effect would be devastating in terms of completing projects on time.
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