THE ILLINOIZE: Post budget speech special edition...Ending "corporate loopholes" or "raising taxes on small business?"...How Pritzker plans to close the budget gap...
February 18, 2021
Good morning.
Governor JB Pritzker’s combined State of the State and Budget address yesterday was…something.
I’m starting to wonder if the Governor’s polling and the intense frustration around the state over the rollout of the COVID-19 vaccine moved he and his advisers to start lobbing bombs.
He mainly took aim at Republicans, seemingly for all that ails the state right now. Whether it was former President Donald Trump, Republican members of Congress from Illinois, or the GOP lawmakers in the legislature, who Pritzker referred to as “carnival barkers,” one may have thought it was a Democratic governor aiming for a populist fight with a Republican supermajority.
Except, that’s not the case at all.
If you include the current General Assembly, Democrats will have held a super majority in the House eight of the last 10 years and have had a veto proof majority in the Senate since 2013. Republican lawmakers don’t matter for a Democratic Governor right now. So why is he targeting them? More on that in tomorrow’s newsletter.
While Pritzker loves to pin problems on Bruce Rauner as much as Barack Obama did on George W. Bush, he’s been Governor for two full years. This is his third budget proposal. Rauner is long gone. He sold his mansion in Winnetka and is probably anywhere but here right now. I mean, Diana Rauner joked they would move to Italy if Rauner lost in 2018.
While the Rauner era was a disaster on many levels, new Governors have to own the mess. When IDES fell on its face responding to unemployed Illinoisans, it was Bruce Rauner’s fault. When there wasn’t enough PPE or vaccine, it was Donald Trump’s fault. When plenty of Joe Biden voters helped kill the graduated income tax proposal in November, it was the fault of “Republican millionaires and billionaires.” This is JB Pritzker’s third budget and he’s going to be before voters next year.
It’s his problem now.
THE “CORPORATE LOOPHOLES”
I’m not going to bog you down with too much detail as I’m still trying to digest the budget book and briefings from yesterday, but I plan to get into a ton more detail tomorrow.
I did want to run down the $932 million the Governor is laying out as part of those “loopholes.”
Here’s what they are:
Capping Net Operating Losses at $100,000 per year ($314 million)
Matching Foreign-source dividends to Domestic-source dividend rates ($107 million)
Rolling back federal 100% accelerated depreciation ($214 million)
Eliminating the state biodiesel tax credit ($107 million)
Reinstating the corporate franchise tax, which was repealed in 2020 ($30 million)
Capping retail stores sales tax discount at $1,000 per month ($73 million)
Reducing tax credits for private school scholarships ($14 million)
Eliminating an add-on deduction for construction job hires ($16 million)
Ending a sales tax exemption for manufacturing machinery ($56 million)
Each of them requires legislative approval.
READ OUR STUFF
Here are all of the pieces we put together on the Governor’s budget. Check them out:
Pritzker Blames Republicans, Pledges to Close Tax Loopholes
Full text and video of Pritzker speech
Business Groups Oppose Plan to Eliminate Tax Breaks
Republicans Slam Pritzker Budget Plan
Mega list of legislator statements
WHAT DID YOU THINK?
What did you think of the Governor’s budget speech yesterday? Interested in your thoughts. patrick@theillinoize.com.
Keep an eye on our Facebook and Twitter pages for more information today. We’ll be back in your inbox tomorrow morning.
Have a great day.