Budget negotiations will extend into next week as House leaves Springfield

Budget negotiations will extend into next week as House leaves Springfield

By JERRY NOWICKI
& HANNAH MEISEL
Capitol News Illinois
news@capitolnewsillinois.com

SPRINGFIELD – Democrats in the General Assembly will go at least three more days past their self-imposed adjournment deadline after failing to pass a budget bill Saturday, although the spending and revenue framework were made public for the first time.

“The House and Senate are very close to an agreement on a final budget,” House Speaker Emanuel “Chris” Welch’s office said in a statement late Saturday night announcing the chamber would adjourn through the holiday weekend.

The Senate was planning to return to the floor Sunday.

The tentative budget measures – all or most of which are expected to be further amended before they clear the General Assembly – tracked closely with the governor’s roughly $53 billion February budget proposal. But there were several deviations from Pritzker’s plan, so full spending estimates were not available Saturday.

The budget contained in Senate Bill 251 will increase funding for the state’s formula for funding K-12 schools by $350 million. The proposal also includes the $182 million Pritzker months ago committed to provide shelter, health care and other services for recently arrived migrants.

It also includes a child tax credit for qualifying families with children under the age of 12, providing parents a credit of 20 percent of the state’s Earned Income Tax Credit in calendar year 2024 and 40 percent in 2025. Pritzker had proposed such a credit for children up to age three.

A revenue plan contained in House Bill 4951 would raise between $840 million and $870 million in new revenue, according to Sen. Celina Villanueva – less than the $1.1 billion that Pritzker sought in his February proposal.

It didn’t include any decrease to the standard deduction claimed by many Illinoisans, which Pritzker proposed in February. But it did include a cap on corporate net operating losses that business can claim, which is expected to generate $526 million.

Democrats’ new framework would raise roughly $200 million in new revenues via a graduated tax on sports betting, which would bump the existing 15 percent tax on revenues to anywhere between 20 and 40 percent, depending on individual sportsbooks’ revenues.

The budget framework would also bump Illinois’ tax on video gaming from 34 percent to 35 percent, tapping into a market that’s grown consistently over the last decade and brought in $814 million in tax revenue for the state last year. That money would still be directed toward infrastructure projects.

The plan would eliminate the state’s 1 percent tax on grocery items – a tax that benefits the state’s municipalities, rather than state government. Pritzker proposed eliminating the tax in his budget proposal, but Republicans and groups like the Illinois Municipal League pushed back.

As part of a compromise with municipalities, the final plan pushes the grocery tax repeal back to Jan. 1, 2026, and allows all municipalities to implement their own grocery taxes up to 1 percent without a referendum and without requiring state administrative fees. Municipalities with home rule authority would be allowed to increase their sales tax by up to 1 percent.

The state’s retailers would be allowed to keep a maximum of $1,000 each month of the sales tax they collect on behalf of the state. Current law allows them to keep 1.75 percent of all taxes they collect before remitting the rest to the state, but the cap would help generate $101 million in general revenue for state coffers.

To appease retailers, lawmakers included a ban on financial institutions and credit card companies from charging fees on the sales tax portion of electronic transactions.

That drew a stark rebuke from Ashley Sharp of the Credit Union League at a committee hearing Saturday. She said the proposal was “flawed and impossible to implement in a manner that’s seamless for consumers who expect the process of using their cards to be quick, safe and convenient.”

News publishers would be able to claim a $15,000 credit per newsgathering employee – meaning reporters, editors, photographers and others – up to $150,000 per newsroom and $250,000 per parent company. A newsroom could claim another $10,000 per new employee. It’s available to print and broadcast outlets, as well as profit and nonprofit newsrooms, and would be capped at $5 million.

The Senate planned to reconvene at noon Sunday, with Senate President Don Harmon telling reporters late Saturday night that he was optimistic his chamber would pass a budget by the end of the day.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.

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