SPRINGFIELD, Ill. (AP) — Illinois Gov. J.B. Pritzker, facing a costly reelection campaign, plans to tackle another foe — inflation approaching 7% — in a state budget proposal that would lift or freeze taxes on groceries and gasoline and give homeowners a one-year rebate of up to $300.
The Democratic governor’s plan, which will be unveiled Wednesday during his combined State of the State and budget address, would spare consumers nearly $1 billion in taxes during the coming year, Deputy Gov. Andy Manar said in an interview. The state will compensate local governments for any revenue lost through the tax cuts, Manar said.
“We have a growing economy. We have growing revenues,” Manar said. “At the same time nationally, the governor understands that the surge in inflation is taking a bite out of people’s pocketbooks. And it’s hitting working families hard in Illinois.”
Pritzker is facing what is expected to be an extremely expensive campaign for a second term. His budget announcement comes just a week after Aurora Mayor Richard Irvin expanded the field of would-be Republican challengers to five. Irvin heads a GOP slate which is expected to have up to $300 million in backing from hedge fund CEO Ken Griffin.
Irvin announced his intentions two weeks ago but has yet to appear publicly with voters or answer questions from reporters. He issued a statement criticizing what he called Pritzker’s “election-year gimmicks.”
The governor’s address Wednesday will be in person for the first time since the COVID-19 pandemic hit, but lawmakers are still encouraged to watch on video elsewhere to limit contact on the House floor during the latest coronavirus surge.
Pritzker’s proposal, which he has labeled the Illinois Family Relief Plan, recognizes the state’s speedy economic recovery, Pritzker’s three balanced budgets, the billions of dollars in backlogged bills and other debt paid off, and improved credit ratings, according to Manar.
If the Legislature controlled by Democrats approves, the budget that takes effect July 1 would:
— Suspend for one year the 1% sales tax on groceries. That would save consumers $360 million, Manar said. Local municipalities get that money, but the state would replace it.
— Freeze the motor fuel tax on gasoline for a year at 39.2 cents per gallon. To fund Pritzker’s $45 billion statewide construction plan in 2019, the tax was doubled to 38 cents and indexed to inflation annually. Without a freeze, it would increase 6.9% to 41.4 cents July 1, Manar said.
The $135 million lost would not affect state construction in the coming fiscal year, and the newly minted federal infrastructure plan will funnel additional money to Illinois, Manar said.
— Provide a property tax rebate up to $300. Every property owner can get an income tax credit of up to 5% of property taxes paid. Single filers earning less than $250,000, could see that credit doubled in the form of a state rebate. This would cost the state an estimated $475 million.
Economic forecasts bolster Pritzker’s claim of affordability. The Governor’s Office of Management and Budget reported in November that revenues were up in the current fiscal year by $1.7 billion, which, less unanticipated spending, still leaves the state hundreds of millions of dollars ahead. The Legislature’s bipartisan financial forecaster has less recent, but similarly rosy numbers.
But it puts off dealing with billions of dollars of debt still facing a more fiscally disciplined Illinois. It was a major reason Pritzker pushed a constitutional amendment in 2020 to raise income taxes on the wealthiest residents, an unsuccessful campaign he said would spread the burden but which Irvin claimed Monday would grant lawmakers “unlimited” tax-raising power.
Irvin also knocked Pritzker for signing a criminal justice overhaul that Republicans claim will debilitate police and blamed him for higher crime and higher taxes on businesses.
“Election-year gimmicks aren’t going to take back our state from out-of-control crime, higher taxes and corruption,” Irvin spokeswoman Eleni Demertzis said. “To do that, we need a new governor.”