Minutes before midnight on the May 31 deadline, House Democrats passed a $42.3 billion State budget for Fiscal Year 2022. Their budget adds a billion dollars in pork projects for Democrat districts, includes a $1,200 pay raise for legislators, and raises taxes on Illinois businesses by more than $650 million.
The Democratic supermajority rammed their tax-and-spend budget through in less than 24 hours. House Democrats filed their first budget amendment after 12:30 AM on Monday, May 31 (Memorial Day). Their final budget amendment was filed less than an hour before the midnight deadline for passage. Democrats moved to suspend the House Rule 21 notice requirement so they could vote on the final budget prior to the deadline. Legislators and the public were given no time to review the budget before final passage.
The Democrats’ budget was drafted behind closed doors, at the last minute, without any openness, transparency or accountability to the taxpayers. In an affront to the legislative process, Democrats ended debate on their massive spending bill in less than 15 minutes. Republicans were allowed one speaker, Deputy Republican Leader Tom Demmer, who was abruptly cut off so that the ruling party could ram their budget through by the midnight deadline. The FY22 Budget and capital plan were contained in SB 2800, approved by the House on a partisan vote of 72-44-1.
We wish could say this was unexpected, or something we haven’t seen before, but we all know this is a familiar playbook. We began this spring session with the promise of a new day from the new Speaker of the House, the start of a new era marked by transparency and bipartisan work across the aisle.
We took this promise to heart and our caucus participated in working groups and tried to engage in the process of crafting a truly bipartisan and balanced budget for the people of Illinois.
Unfortunately, former Speaker Madigan’s playbook has proven hard to throw out. This familiar playbook is exactly why, when House Republicans introduced our package of reforms earlier this year, we proposed that all appropriations bills should be thoroughly vetted through both chambers with a mandatory amount of time for public comment.
Transparency, especially in our budgeting process, is vital to the fiscal health of our state. What we witnessed on Memorial Day was a huge disappointment for many reasons. We haven’t seen any honest attempt at addressing key issues with a huge impact on the budgeting process including meaningful pension reform and property tax relief.
For years, we have heard constituents tell us that property taxes in this state are too high, and for years, the Democrat-controlled General Assembly has failed to provide relief.
Similarly, pensions eat up roughly a quarter of the state’s budget, but no meaningful attempt has been made to rein in this ballooning cost. The longer we wait to enact meaningful pension reform, the greater the risk to the essential government services that people depend on.
Any budget that fails to address these priorities can never be truly balanced and falls short of what the people of this state deserve.
Many years of unbalanced budgets and wasteful spending put Illinois in a dire financial situation. Unfortunately, this isn’t going to be the year that changes. Democrats are adding hundreds of millions in new discretionary spending and asking businesses in Illinois to pay for it.
Democrats are relying on four tax increases on Illinois businesses. These tax increases, which total more than $650 million, include:
- reinstating the onerous and burdensome franchise tax on any business making more than $1,000;
- capping the amount of losses business can deduct;
- stifling immediate investment in the economy by backloading when business can depreciate purchased assets; and
- raising taxes on foreign income brought back to the U.S. from overseas.
Meanwhile the Unemployment Insurance (UI) Trust Fund is running on fumes, with a $5 billion deficit in the Fund with no way to fill the hole – despite the fact that American Rescue Plan Act (ARPA) funds can be directly deposited into the UI Trust Fund. Many other states did just that.
Illinois Democrats were more interested in funding their pork projects with the magic federal money, instead of using ARPA funds responsibly. Democrats added $1 billion in pork projects for their districts, paid for by federal ARPA funds meant to help states struggling with the negative fiscal impact of the COVID-19 pandemic.
Make no mistake about it, the $5 billion hole in the UI trust fund will have to be filled, and if APRA funds aren’t used, then it will come in the form of reduced benefits for laid-off workers and higher contributions from Illinois employers.
There was an opportunity this year to pass a truly balanced budget that met the State’s needs, with no new taxes. Instead, we are stuck with more taxes and nothing to change the trajectory of the failing Illinois economy.