Budget cuts come first without across-the-board agreement on tax increases


Despite Gov. J.B. Pritzker’s five-year budget projection announcing the administration will work with lawmakers to close loopholes and adjust taxes, he said Monday the focus is on cuts amid the pandemic.

The administration Friday projected the budget deficit this year is nearly $4 billion with increased deficits year after year.

“The Governor will work with the legislature to identify corporate and business tax loopholes that can be closed and tax adjustments that can be made that will minimize the impact to lower- and middle-class families while ensuring that Illinois can meet its financial responsibilities,” the report said.

National Federation of Independent Business Illinois State Director Mark Grant said the prospects of increased taxes on small businesses, or the elimination of tax incentives, would be compounded by increased unemployment insurance costs. The state has already borrowed billions of dollars from the federal government for that.

“They expect that paid back,” Grant said. “We’re going to have to figure out how to do that and they’ll look at the business community once again to do that and that’s going to be super expensive.”

With the budget crunch, state Sen. Robert Martwick, D-Chicago, said it’s going to be difficult to balance trying to make the state’s business climate competitive with increased costs.

“They are right to be worried about increased costs as much as every person in every tax class – be it in the working class, the middle class, or the poor – that once again their income taxes are going to go up,” Martwick said.

Martwick advocated for Pritzker's progressive income tax plan, which voters rejected this month. Republicans have said to increase revenue, the state must adopt pro-growth policies rather than additional taxes.

Pritzker said Monday when asked what kinds of tax adjustments or sales tax increases he’s considering to balance the budget, he’s not yet at that point.

“All I can say is we are starting here with cuts,” the governor said. “That is the way that we need to start. We can start to talk about other things when we get there.”

Pritzker’s budget projection said his administration has asked for agency directors to identify 5 percent in cuts with an additional 10 percent reduction for the following fiscal year.

The governor said there’s no agreement across the board for other solutions, but he continues to work with statehouse leaders on options. He said he’s also in communication with leaders in the U.S. Congress.

“Not just in Illinois, but the speaker of the House and the Senate minority leader as well as a few others to encourage, you know, moving forward as quickly as possible with a stimulus plan that would include local and state governments,” Pritzker said.

The state budgeted $5 billion for the fiscal year that’s based on federal aid that hasn’t materialized. Another $1.3 million was budgeted to come from the progressive income tax, which voters rejected earlier this month.

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