Illinois lawmakers passed a $46.5 billion budget early Saturday morning that would provide temporary tax relief and direct inflation payments to residents.
The House voted to approve the budget just before 6 a.m. Saturday, less than two days after Governor JB Pritzker and other leaders of the Illinois House and Senate announced agreement on the spending plan of the State which aims to fight against nagging and near-record inflation by giving back 1.8 billion dollars to taxpayers.
“We are ending this legislative session with huge and historic victories for the people of Illinois: gas, grocery and property tax relief, more support for local government than ever before, a massive improvement in staffing for our nursing home residents, short and long term debt reduction and a balanced budget for the fourth consecutive year,” Pritzker said on Saturday.
Lawmakers say the state’s 1% sales tax on groceries will be suspended for the entire new fiscal year, which officials say will save taxpayers up to $400 million until July 1, 2023.
The state fuel tax, which was set to rise in July due to inflation, will instead be frozen at $0.39 per gallon until Jan. 1, 2023, saving taxpayers $70 million. .
Pritzker says property tax refunds of up to $300 per household will also be included in the budget, along with an expansion of the state earned income tax credit.
Finally, families will receive direct checks from the state pending budget approval. Each individual will be entitled to a check of up to $50, with households also receiving $100 per child.
Income limits of $200,000 per individual taxpayer, or $400,000 for co-participants, will be attached to the checks, officials said.
Pritzker noted that because of the “foundation laid over the past three years,” Illinois lawmakers were able to invest $1 billion in the state’s Rainy Day Fund, with an additional $500 million in pensions.
The agreement stems from a fuel tax freeze, a one-year suspension of sales taxes on groceries, a per-household property tax rebate of up to $300 and increased tax credit for low-income working families.
“Illinois will get $1 billion in tax relief at the pump, at the supermarket checkout and in their property tax bills,” Pritzker said outside his office in the state Capitol, flanked by the president of the Senate Don Harmon and Speaker of the House Emanuel “Chris” Welch. “In addition to that, we’re expanding the Earned Income Credit, sending checks direct to working families.”
Despite a projected surplus of more than $1 billion this year and next, the tax relief relies in part on using a different account. In this case, the road fund money lost to the fuel tax freeze would be made up for by taking $140 million saved to clean up underground fuel tanks that pose a danger to the environment because they are leaking. .
According to the Illinois Fuel and Retail Association, about 5,000 sites have been cleaned up or are in the process of being remediated, in compliance with state Environmental Protection Agency regulations under the 26-year-old law. . The Leaking Underground Storage Tank Fund, funded by a separate gasoline tax of 1.1 cents per gallon, reimburses repair costs, less a $10,000 deductible.
The fund is responsible for these cleanups. Josh Sharp, CEO of the fuel and retail group, said the EPA estimates its liability at between $900 million and $1 billion. Even without the diversion, at a typical annual payment of $65 million, it would take almost 14 years to pay off this debt.
This leaves homeowners to complete cleanups while awaiting reimbursement of significant upfront costs, much like sellers who have waited years for state reimbursement and who Pritzker says are finally covered in this budget with a $4 reimbursement. $1 billion in overdue bills.
“The question is, can they keep their doors open?” Sharp asked. “Probably. Would it be better, once you’ve spent a considerable amount of money, to be reimbursed from a fund that’s supposed to be there just for that purpose? Yes, that would be ideal.
Pritzker’s EPA maintains an online database of 30,046 sites targeted for cleaning leaking storage tanks. But the agency did not respond Thursday to requests for information on the status of those projects or with financial data related to the LUST Fund.
“These are funds that we believe are not needed for the LUST fund, but obviously the LUST fund will continue even after this temporary tax relief,” Pritzker said.
In a year when Pritzker and his legislative colleagues trumpeted fiscal restraint, the move recalls a darker fiscal period in the early 2000s when Democratic Gov. Rod Blagojevich and House Speaker Michael Madigan concocted government spending. ‘fund sweeps’, taking what appeared to be large unspent balances into special funds intended to bolster the operating budget.
Concern over a shorted road fund stemmed from Pritzker’s budget proposal in February, which set the stage for fighting inflation with the suspension of the fuel tax as part of a $970 million tax cut. The fuel tax has received particular attention because just three years ago lawmakers raised it for the first time in 30 years and tied it to inflation to deal with costs of deteriorating infrastructure.
The budget, however, warns of an expected increase of 2.2 cents due to inflation on July 1, to 41.4 cents per gallon for gasoline.
This did not sit well with transportation proponents, who noted that it would cost transportation projects $135 million and stall the pouring of concrete on long-overdue repairs.
The current $140 million balance of the LUST Fund would not be used, but incoming revenues would be diverted to the roads.
House Revenues Speaker Michael Zalewski, a Democrat from Riverside, called it a “weighing in on stocks.” Relief at the gas pump, he said, “is the most concrete thing we can do that we believe our residents will feel the effects of without further hurting the overall fiscal position of the state.”