$1.8-Billion state tax-break deal reached, with fund-diversion help

SPRINGFIELD, Ill. (AP) — Democrats who control the state budget have reached an agreement on next year’s spending plan.

Gov. J.B. Pritzker announced the deal Thursday afternoon. It includes $1.8 billion in tax relief, including a freeze on an automatic motor fuel tax increase. It’s mostly the result of higher-than-expected revenue. But even with the extra cash, the tax break relies in part on money from a different account.

Because freezing the motor fuel tax would cost the road fund $135 million, officials would divert $140 million from an account set up to clean up environmental hazards caused by leaking underground fuel storage tanks. But petroleum and other retailers note that the state already owes at least $900 million from the tank fund to reimburse completed or ongoing cleanups.

The Governor’s office say in all the budget includes $1.83 billion in tax relief for working families including: 

• Suspend the tax on groceries for one year – saving consumers $400 million
• Freeze the motor fuel tax for six months – saving consumers $70 million
• Double the property tax rebate – up to $300 per household
• Permanently expand the earned income tax credit – putting $100 million per year back into the pockets of working families who need it most
• Provide direct checks to working families
  • $50 per individual
  • $100 per child, up to three children per family
    • Income limits: $200,000 for individuals and $400,000 for joint filers
• Back to school tax relief for families and teachers – saving $50 million

$1.2-billion for long-term fiscal stability:  

Builds on $4.1 Billion in Debt Paydown in SB2803

• $1 billion for Budget Stabilization Fund
• An additional $200 million pension payment, bringing the total pension payment over what is required to $500 million dollars and saving taxpayers more than $1.8 billion.
  • These measures are in addition to the debt payment outlined in SB2803, which included $230 million for College Illinois and $898 million for Group Health Insurance bill backlog.

Public Safety Investments:

Invests more than $200 million on top of the Governor’s proposed budget to support public safety measures, invest in the tools law enforcement needs to prevent and solve crimes and strengthen investments in violence prevention programs that keep communities safe.