Rep. Greg Harris • 13th District
Springfield Update • June 4, 2021
Illinois State FY22 Budget
At midnight on May 31, the Illinois General Assembly passed the state budget for Fiscal Year 2022. Earlier this spring, we had been preparing for a difficult budget in anticipation of deep revenue losses which would have forced over $1.9 billion in cuts to schools, healthcare and other vital services.
Fortunately, because of improvements in the economy due to President Biden’s recently enacted stimulus package, our economy rebounded and state revenue numbers came in much higher than anticipated. This allowed us to pass a fully balanced budget without tax increases or cuts to vital programs such as higher education, human services, public safety, transit, and senior care.
In addition to protecting these valuable programs, this budget takes steps to improve Illinois’ fiscal health. We have reduced our bill backlog from a high of $17 billion during the Rauner years to $3.2 billion today, approaching 30 day turnaround times. In FY22, the state will also pay down $3 billion in outstanding debt. This not only reduces Illinois’ overall debt burden, it also eliminates all inter-fund borrowing and saves taxpayers over $100 million in interest costs. In addition, this eliminates debt service payments and helps stabilize fiscal capacity for FY23 and FY24 as well.
We are also taking this deliberate, planful approach when it comes to managing the federal dollars coming to Illinois from President Biden’s American Rescue Plan Act (ARPA) stimulus package. Illinois is set to receive $27.8 billion in ARPA funding, of which $8.1 billion is set aside for state government.
ARPA dollars may be spent over the course of the next four years and final guidance from the US Treasury Department is not expected until this summer. Thus, the budget only appropriates $1.5 billion (plus an additional $1 billion for capital projects) in ARPA dollars for FY22. This gets some money out the door right away to assist those still immediately impacted by the pandemic, while giving us time to strategize on the best uses for the remaining dollars.
The state budget also closes several corporate tax loopholes, especially those imposed on the state by the federal government by former President Trump’s corporate tax cut bill. This includes capping corporate net operating loss (NOL) write-offs at $100,000, limiting a tax exemption taken most by the wealthiest businesses, with only 89 companies using it to receive over $3 billion in benefits.
Illinois will also now treat foreign dividends just like domestic dividends for tax purposes, to prevent multinational corporations from offshoring profits earned in our state just to avoid taxes. This budget also eliminates one of the biggest giveaways to corporations by rolling back the 100% accelerated depreciation deduction, raising $214 million in additional state revenue. Finally, this budget freezes the phaseout of the Corporate Franchise Tax. This preserves the current situation whereby small businesses struggling to get by will continue to be exempt from this tax while the largest corporations who do business in Illinois will still pay their share.
Within the budget there are also additional spending adjustments and program highlights I want to mention:
- $350 million increase to public school Evidence Based Funding formula
- $543 million for the Early Childhood Education Block Grant
- Holds harmless Local Government Distributive Fund and transit funds
- Increased funding for mental health, substance and suicide prevention, including specialized behavioral health programs for our first responders.
- $183 million for violence prevention, including funding for Teen REACH, afterschool programming, violence interrupters and youth summer jobs
- Extends SNAP benefit increases
- Funds a new cadet class of State Police to increase expressway safety
- Gives a major rate increase to DCFS group homes and foster families
- Invests over $150 million in rates for DD providers and workers to help meet the goals set out in the Guidehouse study
- $1 billion to accelerate capital projects, particularly those focused on water, sewer, or broadband
- Increased funding for Alzheimer’s Disease Research, Care, and Support Program
- Makes full annual pension payment to all five state retirement systems
- Provides $300 million for business recovery and revitalization including
- Special attention to small businesses who were not funded in BIG Program
- Special priority for Disparately Impacted Areas
- Technical assistance and community-based navigator programs to assist small businesses in applying for loans, grants and COVID recovery programs
- Major investments in kickstarting tourism, convention, hotel and hospitality businesses
- Local economic recovery planning funds, support for local chambers of commerce and Black Wallstreet
- $50 million for workforce recovery
- Revitalization funding for arts, culture and museums
- $475 million for healthcare industry stabilization
- Long Term Care stability payments
- Hospital stability payments
- Special additional resources for safety net and rural critical access hospitals
- Major investments in community mental health, substance abuse, suicide prevention and trauma informed treatment programs
- $104 million for affordable housing, supportive housing and homeless youth
- $46 million in educational enrichment programs including after-school programming, college bridge programs, Freedom Schools and Alternative Schools Network
- $15 million in new funding for African American AIDS Response Fund
- Kickstart funding for Special Olympics
- $21 million increase to Welcoming Centers for immigrant and refugees
- Extension of Medicaid benefit to undocumented persons 55 and up.
- Legal assistance to persons in DACA
- Expansion of Access to Justice programs at Westside Justice Center and The Resurrection Project
- Expansion of Grow Your Own Teachers and Parent Mentoring programs
There is much, much more (3,088 pages to be exact). You can review it here: SB2800 HAM#3 (HARRIS)
If you have any questions or comments about our state budget, please do not hesitate to email me at Greg@GregHarris.org or call 773-348-3434.