Gov. Pritzker Touts Balanced Budget, But Calls For Higher Taxes

Illinois Governor J.B. Pritzker recalled Illinois’ darkest days during his first budget address Wednesday. But he’s also looking to get beyond the current financial mess — and is calling for higher taxes, now and in the future. 

Pritzker began his budget address Wednesday with a history lesson, invoking former Gov. Henry Horner who led Illinois through the Depression. At the time, nearly half the workforce was unemployed, teachers hadn’t been paid in a year, and farmers across the state were facing bankruptcy.

“Despite all the economic struggles the state faced during the Great Depression, Horner still managed to increase school funding, institute unemployment insurance and pensions for older Illinoisans, create building programs for state institutions and improve public health services,” Pritzker said.

Pritzker isn’t facing a situation quite as bleak, although the state has billions in unpaid bills and over $130 billion in unfunded pension liabilities.

Despite calling his budget austere, the first-term governor wants to increase spending on education, social services and public safety.

And that’s something that stood out to state Rep. Jim Durkin, the minority leader in the Illinois House. He said he and other leaders from the House and Senate met with the governor before the budget address, and he didn’t get the idea that Pritzker was focused on austerity.

“It was clear to me that there’s going to be some sharp divides on how we manage this year’s budget. What I did see first and foremost is that there’s more spending this year,” he said.

Pritzker styled himself as a fighter for the working class — citing the passage of a higher minimum wage a day before his speech and defending its fast-track approval. Speaking to his base, Pritzker defended the spending increases as an investment in the future.

Remember former Governor Henry Horner? He was also seen as a champion during difficult times. But, maybe more importantly, he also sought new taxes. He’s known for signing the state’s first permanent sales tax into law, and shortly after, increasing it.

And Pritzker is following that example as well. His spending plan for the next fiscal year relies on over a billion dollars in new revenue coming from taxing Medicaid providers, legalizing sports betting and recreational marijuana—as well as adding taxes on e-cigarettes and plastic bags, among other increases.

“To that end, the budget I present to you today is an honest proposal – the costs are not hidden, the revenues I propose are not out of reach, the hole we need to fill is not ignored,” he said.

All of that, the governor said, will act as a bridge to get to his big priority: a graduated income tax. “It will take 18 months to get it done, but it’s worth the wait so we can save working families hundreds or thousands of dollars per year.”

But there’s still a lot of convincing to do regarding Pritzker’s proposals to generate revenue. Republicans are not on board with the progressive income tax idea, and many have spoken out against legalizing recreational marijuana.

State Sen. Chapin Rose, a Republican from Mahomet, said he liked what the governor had to say but he is still looking for details about where the money will come from.

“It ultimately comes down to this, can you actually pay for the promises you’re making? Early on the in the speech, he said, ‘this is a budget that lives within our existing revenues.’ [And] four pages later he notes that he needs $1.1 billion in new revenues to make it work,” Rose said.

The budget plan includes $170 million from approving recreational cannabis.Pritzker said his estimates count only revenue from the licensing process – not taxes on the actual sales of the drug. And his budget officials estimate that thousands of potential growers and sellers could spend hundreds of thousands of dollars each to get state approval.

State Rep. Kelly Cassidy – a Democrat from Chicago who is sponsoring the measure to legalize the drug – said she’s thrilled to have the governor’s support but believes there is still “some work to do to finish the bill.”

She said it may be too soon to know just how much revenue will come from recreational marijuana. Backers of the plan are still waiting on results of a study that will show demand for marijuana in Illinois – giving them a better idea of the possible tax revenue.

Pritzker also wants to legalize sports betting, and use the money from selling state licenses to fill some of the gaps.

State Rep. Mike Zalewski, a Chicago Democrat who is pushing for gambling expansion, said he agrees with Pritzker’s approach to pursue gambling on professional sports on its own.

“Sports betting should really get done as soon as possible and a lot of us worry if we wait for a massive casino expansion bill, we’ll get left behind in the Midwest,” Zalewski said.

Budget officials said their estimate is based on offering 20 licenses to run a sports betting games for around $10 million each.

State Rep. David McSweeney, a Republican from Barrington Hills, said he’s skeptical. “This budget is a joke. More of the same. Higher taxes. More spending. That’s the Pritzker plan.”

Despite Republican opposition, Pritzker does have Democratic supermajorities in both the Illinois House and Senate. But if the legislature fails to approve the new revenue, Pritzker said he will be forced to make cuts across state government.