CHICAGO (WBBM NEWSRADIO) – Gov. J.B. Pritzker’s new budget tries not to get exuberant about the state’s improving financial picture.
The economy is rebounding as COVID-19 starts to subside, and recovery was aided by borrowing $3.2 billion from the federal government. But state officials said with more tax revenues and other income, the state is paying back $2.2 billion of that.
In fact, the governor’s budget projects a $1.7 billion dollar surplus. And the state’s rainy day fund, depleted during the budget impasse under former Gov. Bruce Rauner, will be replenished with $600 million this year.
This budget will include the previously announced tax relief, a grocery tax freeze, a property tax rebate for about 2 million households and a suspension of a planned gasoline tax hike. But the officials said you won’t see new programs proposed that would spend all the new money and keep increasing year to year.
They told reporters the aim is to stabilize the state’s finances and still increase education funding, violence prevention and pay down debts.
The huge pile of the state’s unpaid bills is going down. And Illinois’ “Rainy Day Fund” is being replenished after being exhausted during the budget impasse under Rauner thanks, in part, to the increased cannabis tax revenue.
The budget showed more federal relief aid is headed Illinois’s way, an estimated $52 million though a lot of it is going directly to local governments. For the state’s part, officials said to look for things like more business grants and stabilization grants to childcare providers. There’s not a lot in the way of flashy new programs.
State officials said Illinois’ in the best shape it’s been in decades because of controlled spending and fiscal discipline and the economy is rebounding. But the budget shows that sales tax revenues are expected to decline by $127 million.
Among possible reasons? What the administration is calling the “Illinois Family Relief Plan,” which would suspend the tax on groceries and see that the gasoline tax won’t go up as planned and allow some 2 million homeowners to get property tax rebates up to $300.
Local governments, like Chicago, receive a portion of the state’s sales tax revenue. State officials say they are not changing the revenue sharing formula but they will reimburse the cities, towns, villages and others for any lost revenue because of the tax relief.
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