Lawmakers, Pritzker administration spar over projected fiscal year revenues
By RAYMON TRONCOSO
Capitol News Illinois
rtroncoso@capitolnewsillinois.com
SPRINGFIELD – Members of an Illinois Senate committee sparred with officials from Gov. JB Pritzker’s administration Friday in a hearing on tax changes proposed by the governor in an effort to balance the state’s budget for the 2022 fiscal year.
The Senate Revenue and Appropriations committees held the joint hearing, questioning the directors of the Illinois Department of Revenue and the Governor’s Office of Management and Budget among others.
In his budget proposal released in February, Pritzker outlined nine changes to the corporate tax code meant to generate $932 million in revenue for the state in order to maintain a balanced budget while keeping income taxes and government spending flat for FY 22, which begins July 1.
“The governor’s budget proposal is a reasonable and balanced one,” IDOR Director David Harris told lawmakers. “Were it to be enacted as (Gov. Pritzker) proposed, there would be a $120 million surplus at the end of FY 22 by estimate.”
The largest change in terms of building revenue would be a cap on how much corporations can deduct from their taxes based on their losses in a given year. Under current tax law a corporation can take their net operating loss and reduce how much of their income is taxable in future years by that amount.
Pritzker’s proposal would cap this deduction to $100,000 annually for the next three years, which IDOR estimated would save the state $314 million in FY 22.
Harris told lawmakers that the state’s 2,800 corporate taxpayers deducted $6.4 billion in net operating losses from their taxes in 2018. Just 84 of those corporate taxpayers that year accounted for $3.5 billion in operating losses.
“My point there is the biggest percentage of (net operating losses) are enjoyed by a very small number and that means that the overwhelming majority of corporations are not going to be impacted by this,” he said.
While the Pritzker administration has referred to the changes as “closing corporate tax loopholes,” three of the nine tax codes being removed or amended as part of the proposed budget were put into place by Pritzker as part of budget negotiations with state Republicans in 2019.
A phased repeal of the corporate franchise tax, an addition to what properties qualify for the state’s machinery and equipment sales tax exemption, and a tax deduction for creating new construction jobs in the state were added to the budget proposal put forth by Pritzker in 2019 to secure Republican support.
All three provisions would be delayed or removed in the governor’s plan in order to generate approximately $102 million in savings for FY 22
That third provision, branded as the Blue Collar Jobs Act, was meant to go into effect Jan. 2021. At the time of its passage, the bill was touted by both Pritzker and Republicans as a tax credit that would bring more jobs and businesses to Illinois.
However, the construction worker tax credit had its implementation delayed by Pritzker, who cited losses in tax revenue due to the coronavirus pandemic.
Sen. Chapin Rose, R-Mahomet, questioned Sturm, the governor’s budget director, on why a program passed with bipartisan support needed to be cut if the state expected a surplus.
“Here we are at the end of COVID with Illinois as one of the top states in the nation for unemployment, people desperately needing work,” he said. “Why on earth did the administration— did Governor Pritzker— decide, he’s now going to back out, back out of, back down from, go back on, his word, his pledge, when he signed the Blue Collar Jobs Act?”
Democratic Sen. Linda Holmes, of Aurora, echoed his concerns.
“I kind of hesitate, wondering if that is almost a bit of a poison pill here, when we talk about eliminating some recent tax changes,” she said.
According to Sturm, the state’s short-term fiscal situation looked positive due to loans and an influx of funds from the federal government as part of several coronavirus relief packages passed in the last year. But for long-term stability, there were hard choices that had to be made regarding the tax code.
“Illinois has struggled with a persistent budget deficit for the last few years, many years. These are changes more permanent in nature that would go to try to address some of the underlying structural challenges of the state’s budget,” Sturm said.
Other corporate tax changes that raised concerns at the hearing are the reduction of a tax credit for individuals and businesses that contribute to private school scholarships, a cap on the reimbursement retailers receive from collecting sales tax, and the expiration of a sales tax exemption for biodiesel fuel.
Multiple business organizations submitted either oral or written testimony against the proposals, including the Illinois Manufacturers’ Association, the Taxpayers Federation of Illinois and the Illinois Retail Merchants Association.
Chicago Democratic Sen. Elgie Sims, who chaired the hearing, said he heard “a large discussion this morning as if this is a one-year solution,” and offered support for the budget’s long-term goal of financial solvency.
“If there are other proposals, we certainly look forward to see, but these are the proposals as put forth by the governor,” he said.
Greg Cox, of the Illinois Soybean Growers Association, said he appreciated the difficulty of Sturm’s position since “she was given a task to build a budget with no general tax increases and with flat spending,” but that there would be serious policy implications for cutting the exemption for biodiesel fuel.
Those implications are increased air pollution as more petrol and less biodiesel would be used in fuel blends and the potential loss of 2,000 jobs tied to the biodiesel fuel industry in Illinois, which is the nation’s largest soybean producer.
He also presented Senate Bill 2394, submitted by the Growers Association, through Essex Democrat Sen. Patrick Joyce, as a compromise that would still gradually eliminate the tax credit and save the state money.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
Local News
Billions of cicadas get ready to raise a racket
Spread the loveBy Kelly White If you haven’t heard the buzz yet, you will soon. With 2024 marking a big year for periodical cicadas in Illinois, billions of the red-eyed buggers will soon be making an appearance. Periodical cicada broods XIII and XIX will be emerging throughout much of the state at the same time.…
‘A man of honor, a beacon of kindness’
Spread the love. Chicago weeps for Officer Luis Huesca . By Tim Hadac People across the Southwest Side shed tears earlier this week, as throngs of police officers and other filled the St. Rita of Cascia Shrine Chapel at 77th and Western for a funeral Mass for CPD Officer Luis M. Huesca. Officer Huesca was…
Archer Manor Little League starts its 2024 season
Spread the love. Sunny skies and mild temperatures greeted the boys and girls, moms and dads, umpires and coaches, and everyone else participating in Archer Manor Little League’s Opening Day parade and ceremonies at Archer Park. Since 1952, AMLL has provided athletic opportunities for thousands of boys and girls in Archer Heights, West Elsdon, Central…
Dread over car drifters on streets
Spread the love. Reckless drivers take over SW Side intersections . By Tim Hadac At the April meeting of the Garfield Ridge Neighborhood Watch, a police officer admitted that the drag racing/drifting phenomenon seen and heard in the Midway area in recent years “probably will increase, but we hope not.” The admission was triggered by…
Don’t raise pilots’ retirement age, García says
Spread the love. From staff reports U.S. Rep. Jesús “Chuy” García (D-4th), senior member of the Transportation and Infrastructure Committee, recently led a letter joined by 121 Members of Congress urging House Democratic leadership to reject any changes to the pilot retirement age in a final version of the Federal Aviation Administration (FAA) reauthorization bill.…
CTA launches ‘chat’ feature on website
Spread the love. From staff reports Artificial Intelligence has made another step forward at the Chicago Transit Authority. CTA officials recently launched the “Chat with CTA” chatbot, a new virtual automated service featured on transitchicago.com. The communication tool allows riders to report issues, provide feedback and receive answers in real-time. Additionally, it provides the CTA with customer…
New effort to aid kids with disabilities
Spread the love. From staff reports A new grant program aimed at providing financial assistance to families of children with disabilities was launched recently by Mayor Brandon Johnson, in partnership with the Mayor’s Office for People with Disabilities and Ada S. McKinley Community Services. Children with disabilities is a population disproportionately affected by the pandemic,…
Dart warns of Sheriff’s Office imposters
Spread the love. From staff reports Cook County Sheriff Thomas J. Dart recently alerted the public of an uptick in telephone and email phishing scams in which scammers identify themselves as a Sheriff’s Office employee in an attempt to defraud victims. Scammers are using the actual names and respective titles of Sheriff’s Office employees to…
It’s ‘Batter up!’ time in West Lawn
Spread the love. Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place • (773) 504-9327 . It must be May because baseball season is here. I recently reported on the West Lawn Little League, whose 2024 season is now underway. Another West Lawn youth athletic association is Midway Baseball Softball Association. Their teams…
Neighbors
Cinco de Mayo, here we come
Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place • (773) 517-7796 . It’s time to bring out the Corona, Tecate, Modelo or Dos Equis, along with a few limes. Heck, maybe even bring out the Patrón! It is Cinco de Mayo this Sunday, translated to…
Softball | Jocelyn Hovanec scores two runs, Ks 12 in Chicago Christian win
Spread the loveBy Xavier Sanchez Correspondent Chicago Christian is working to find its footing in the inaugural season of the Chicagoland Christian Conference. The Knights entered this week 6-8 overall and 4-6 in the CCC, putting them in fifth place with just two conference games to play among their final seven regular-season contests. The Knights…
Boys Volleyball | Chicago Christian finishes April strong, takes second at Ridgewood Invitational
Spread the loveBy Xavier Sanchez Correspondent A busy and largely successful final seven days of April saw Chicago Christian briefly climb back to the .500 mark after a tough first month of the season. The Knights (11-12, 4-4 Chicagoland Christian Conference) have won seven of their past 10 matches, all of which were played over…
Work moving forward at Marquette Park
Spread the love. Kathy Headley Your correspondent in Chicago Lawn and Marquette Manor 6610 S. Francisco • (773) 776-7778 . In the March 29 edition of the Greater Southwest News-Herald, I wrote a story about a town hall meeting at Marquette Park, we learned of some of the upcoming plans the Park District has for…
Sophia Smith’s brace sinks Red Stars
Spread the loveBy Jeff Vorva Correspondent Home has not been that sweet lately for the Chicago Red Stars. The team lost its second straight game at SeatGeek Stadium with a 2-0 setback to Portland in front of an announced crowd of 4,443 on April 27. Portland star Sophia Smith scored in the 10th and 26th…
Nazareth Academy celebrates ‘special talent’ J.J. McCarthy in NFL Draft
Spread the loveBy Steve Metsch Dennis Moran has no doubts that J.J. McCarthy – the former Nazareth Academy quarterback who is now with the Minnesota Vikings – will succeed in the National Football League. Moran was among about 60 or so Nazareth Academy fans, friends and coaches who gathered Thursday night at The Stadium Club…
Brother Rice names Al Perez next soccer coach
Spread the loveBy Jeff Vorva Correspondent A few new coaches are dotting the area high school athletic scene. One of the more notable hires was Brother Rice bringing Al Perez aboard as the soccer coach. Perez led Chicago Public League power Washington to a Class 2A state championship in 2013, a fourth-place finish in 2015…
Police Council rallies to save ShotSpotter
Spread the love. By Alexis Bocanegra Your correspondent in Clearing and Garfield Ridge (773) 949-1509 • grcl.alex23@gmail.com . Chicago Lawn (8th) District Police Council members Mark Hamberlin, Al Cacciottolo and Jason Huff have created an online petition to save ShotSpotter. As you may have read in the Clear-Ridge Reporter & NewsHound back in March, Mayor…
Capacity crowd speaks out against Evergreen Park dispensary
Spread the loveBy Joe Boyle Additional chairs had to be brought out to seat an overflow crowd of Evergreen Park residents who attended a meeting April 15 regarding a proposed cannabis dispensary for the village. And many who were in attendance voiced their opposition to having a dispensary in Evergreen Park. Most of the people cited…