BUDGET
House Republican leaders discuss budget priorities. House Minority Leader Tony McCombie and Republican Budgeteers discussed their priorities for the Fiscal Year 2025 State Budget at a press conference in Leader McCombie’s Capitol office Thursday.
As the General Assembly begins a new legislative session and looks ahead to the Governor’s budget address in two weeks, the Republican leaders wanted to set the stage for what they expect to be included in the upcoming FY25 budget proposal.
Leader McCombie outlined the House Republican priorities for the year:
- Holding the majority party accountable to spending
- No New Taxes – Illinois voters rejected a graduated income tax in 2020. We need to provide meaningful tax relief to Illinois residents.
- Tackling the State’s $141 billion pension debt
- Fixing state agency mismanagement and disfunction
- Meeting our prior fiscal obligations
- Real Ethics Reform – The federal corruption trials and convictions of the ComEd Four, former Madigan Chief of Staff Tim Mapes, former Chicago Alderman Ed Burke, and the upcoming trial of former House Speaker Michael J. Madigan should instill action in the majority party to work with Republicans on meaningful ethics reform proposals.
- Properly funding education via the evidence-based model
- Prioritizing state services for Illinois citizens
“House Republicans want to be part of the solution,” Leader McCombie said. “We have reached out to the Governor, Senate President Harmon, and Speaker Welch to again ask them to work with us. But to that tune, it takes two to negotiate. And most importantly, we must negotiate in good faith. That requires trust to be rebuilt, where it has been broken by Speaker Welch in last year’s budget process.”
Norine Hammond, Deputy Republican Leader and chief budgeteer for the House Republicans, pointed out that just last week, Republicans joined with Democratic colleagues in bipartisan support of a plan to protect family farms by changing Illinois’ burdensome estate tax. This effort underscores that we can work together across the aisle to advance meaningful improvements to our tax and budgetary policies.
“I am hopeful that Republicans and Democrats will be able to work together to pass a budget that protects Illinois taxpayers, properly funds shared priorities, and makes real reforms to improve our economy,” said Leader Hammond.
Amy Elik, Assistant Republican Leader and deputy budgeteer, discussed her legislation to provide tax relief to Illinois families.
“House Bill 4998 will provide tax relief to every taxpayer in the state by removing the pause in the inflationary component of the standard exemption, which was included in the revenue omnibus last year,” said Rep. Elik. “Our legislative proposal seeks to restore the cost-of-living adjustment and provide taxpayers some relief on their tax bills next year.”
CGFA: Income tax receipts down in January. The numbers, which reflect State tax revenue intake, were published in the “Monthly Briefing” published by the General Assembly’s Commission on Government Forecasting and Accountability (CGFA) as tracking of State revenues in January 2024. Although the U.S. economy continues to be strong nationwide, payment of income tax to the Illinois Department of Revenue (IDOR) dropped significantly in January 2024. Relative to the prior year, personal income taxes paid to IDOR were down $52 million from the previous year, and corporate income tax payments were down $15 million, creating a total income tax shortfall of $67 million.
Although State sales tax receipts rose $16 million during the same period, the income tax shortfall was decisive in producing overall negative revenue trend numbers for January. Across all general funds tax lines, State of Illinois January 2024 revenues were down $22 million from the year-earlier month. This cash flow number marks what could be a significant negative turnaround from the generally positive numbers chalked up by IDOR during the first half of FY24. During this period, Illinois income tax revenues and overall tax revenues posted a series of numbers that were able to keep up (just barely) with the swelling spend rates of the State as authorized by the Democrats’ FY24 State of Illinois Budget.
IMMIGRATION
Pritzker Administration admits controversial immigrant healthcare program is running more than $200 million over budget. Swirling disputes have confused all parties involved, including health care providers, with respect to two conjoined programs that provide taxpayer-funded health care for undocumented immigrant adults in Illinois. The programs are called “Health Benefits for Immigrant Adults” (HBIA) and “Health Benefits for Immigrant Seniors” (HBIS). Federal law provides that healthcare benefits for people in these categories are not eligible for federal Medicaid matching funds.
These HBIA and HBIS programs have become one of the largest components of the State’s overall budget. $550 million was appropriate for these programs in fiscal year 2024. As enrollments and costs mounted well above this number, the Pritzker administration implemented enrollment freezes within both programs. As of February 2024, no new migrant patients can be enrolled in these programs, nor can they enroll themselves. Costs have continued to increase, however, as persons who enrolled before the freeze deadline are fully eligible to receive healthcare benefits. Many of these individuals are patients with chronic and complex medical conditions. The Pritzker administration has begun to enforce limited patient co-payment requirements under terms required by the Illinois Department of Healthcare and Family Services (HFS).
Anticipated costs have, however, continued to increase. The copayment requirements are not, by themselves, enough to get a budgetary handle on the program. In testimony to the General Assembly’s Joint Committee on Administrative Rules (JCAR) on Tuesday, February 6, an HFS spokesperson confessed that current spending trends lead to anticipated expenditures for these programs at $773 million in FY24. This represents a $223 million cost overrun from the sum appropriated by the General Assembly at the start of the fiscal year.
TAXES
Reps. Ozinga, Ugaste Announce Plan to Combat Opportunity Deserts and Provide Property Tax Relief. At a press conference in Springfield this week, Rep. Dan Ugaste and Rep. Tim Ozinga announced a plan to combat opportunity deserts and provide solutions to high property taxes that are impacting many of Illinois’ most economically fragile citizens. Also participating in the press conference was former state representative Mark Batinick.
Opportunity deserts in the state are often created when high property taxes have driven out existing businesses and/or inhibited commercial growth. When this occurs, a vicious economic cycle is created that puts a larger tax burden on existing homeowners. And those who most often feel the larger tax burden are seniors, the unemployed, under-employed, poor, and minorities.
Two Illinois towns in Cook County offer prime examples of a huge disparity in property tax rates. In Winnetka, the average household income is $400,000 and the racial makeup includes only 1.8 percent Black or Latino. The commercial property tax rate there is 7.465 percent. By contrast, in Harvey, the average household income is $41,000 and the racial makeup includes 92 percent Black or Latino. The assessed property tax rate there is nearly four times higher at 28.579 percent.
House Bill 4866, filed by Rep. Ozinga and co-sponsored by Rep. Ugaste, would establish an annual program to award property tax relief swaps to school districts in the state. The Fixed Pension Payment Property Tax Relief Plan would tie pension costs and property tax relief into a certain percentage of each year’s budget. And with pension costs going down as a percentage of the overall budget in the coming years, a pool of resources would be created to provide school districts with funds that in turn lower their property tax levy. Once fully implemented, some districts could see a 50 percent reduction in their property tax levy.
Property tax relief leads to organic growth and a way out for areas with opportunity deserts. Illinois House Republicans look forward to working with Democrats to implement these solutions to help provide relief for homeowners and property owners in our state.
“Areas in southern Cook County and around the state have continued to suffer as the situation has worsened,” stated Rep. Ugaste. “We must act to help those of our citizens who are being crushed by these enormous property tax rates.”
“With the passage of this legislation, school districts would be required to lower their property tax levies to an amount equal to the relief,” stated Rep. Ozinga. “The time to ignore this issue has ended, and the problem is not going away. Lawmakers need to step up and provide real solutions to help our most vulnerable residents.”
“The current system has created areas of the state where economic growth is nearly impossible,” former Rep. Batinick stated. “The high property tax rates make it economically unviable for companies to invest in areas even if they have terrific infrastructure. By working to dramatically lower property taxes, we can spur economic growth that can lead to an increase in jobs and decrease in crime.”
MANUFACTURING
Rep. Elik Supports Illinois Manufacturers’ Plan to Strengthen Workforce. State Representative Amy Elik joined the Illinois Manufacturers’ Association (IMA) in support of its 2024 legislative agenda, advocating for measures to strengthen the state’s manufacturing ecosystem by supporting students and families entering the workforce.
“I’m proud to partner with the Illinois Manufacturers’ Association on these important issues concerning career training education and increasing access to childcare,” said Rep. Amy Elik. “Illinois must continue to explore ways to build career pathways for students and remove barriers that make it difficult for students and parents to enter the workforce.”
A bipartisan measure (HB 3307) sponsored by Rep. Amy Elik would allow students to take two years of career training education in place of two years of foreign language study.
An additional measure (HB 4670) sponsored by Rep. Elik would create a pilot program to allow 10 manufacturers to open on-site childcare centers at no cost to their employees. The employer is required to follow staffing, medication, background checks, and liability insurance requirements through an expedited approval process. The IMA is also seeking to bring grant dollars/incentives to employers who open childcare centers in designated childcare deserts.
Rep. Elik added, “The lack of available childcare is a hindrance to attracting and keeping people, especially women, in the workforce. We believe that this pilot program is very unique, but it will be a way for employers to provide a key benefit to their employees and to bring more people to the workforce, which improves manufacturing in Illinois for decades to come.”
Manufacturing is the largest contributor of any industry to the state’s Gross Domestic Product, supporting nearly a third of all jobs in Illinois and contributing more than $580 billion to the state’s economy each year. For continued growth, lawmakers must adopt policies that make it easier for manufacturers to hire and retain qualified workers and encourage businesses to invest in new technologies that can revolutionize the world. To advance these goals, the IMA recently partnered with members of the General Assembly to form a new bipartisan and bicameral Illinois Manufacturing Caucus, which will focus on issues that impact the industry. State Representative Amy Elik serves as co-chair of the Illinois Manufacturing Caucus.
“Illinois has a proud manufacturing history, but we cannot rest on our laurels as other states implement policies that incentivize manufacturers to locate outside of our borders,” said Mark Denzler, President & CEO of the Illinois Manufacturers’ Association. “We must harness our talent to build a workforce of the future and embrace technology that is poised to solve some of the world’s most pressing challenges. Manufacturers across Illinois look forward to working collaboratively with lawmakers to get the job done.”
REGULATION
Republicans Unveil New Legislation to Prevent Mishandling of Human Remains. New legislation has been filed in response to the disturbing story of a Carlinville funeral home that repeatedly mishandled human remains, including providing the wrong remains to the families of people who had been cremated. Senator Steve McClure, Representative Mike Coffey, and Representative Wayne Rosenthal have unveiled new legislation designed to stop similar horrific events from ever happening.
“Families who have lost a loved one have suffered enough already, it is unconscionable for anyone to try to victimize them in their time of sorrow,” said Senator McClure. “This legislation is designed to make sure human remains are treated with the serious dignity and respect that are required, that bereaved families are treated fairly, and that anyone who violates the law is punished accordingly.”
In the fall of 2023, Sangamon County coroner Jim Allmon launched an investigation into a funeral home and crematorium in Carlinville, leading to allegations that the business provided more than 60 families with the wrong remains, with some of the remains being permanently lost, and that the business improperly stored bodies, allowing them to decompose in unrefrigerated settings.
“Families that have been impacted by these horrible crimes by the director of this funeral home will have lasting grief,” said Rep. Rosenthal. “I fully support Senator McClure’s legislation and will be filing identical legislation in the House to ensure no family has to ever endure suffering like all the families affected by these criminal acts.”
“Proper authorities failed many families by not acting quickly on such heinous allegations that were brought forth against the funeral home director,” said Rep. Coffey. “Legislation must be passed to protect families in the future and to deter criminal practices within funeral homes.”
Unfortunately, many of the potential issues with the Carlinville business may not have been criminal in nature, due to weak laws regarding the handling of human remains.
Senate Bill 3263 would make it a Class 4 Felony to knowingly and intentionally provide inaccurate documentation of the identity of human remains, to knowingly and intentionally store human remains in violation of Illinois law, or to knowingly and intentionally provide misidentified human remains. The law would apply to all individuals authorized to treat, transport, or store human remains, which would include funeral homes and crematoriums.
Representatives Rosenthal and Coffey are filing identical legislation in the Illinois House.
“After working with dozens of people that were victimized by these egregious acts it was clear that there needed to be some commonsense legislation introduced to help prevent or deter this from happening again,” said Sangamon County Coroner Jim Allmon. “I am thankful for the hard work these officials have put in to creating this bill and look forward to seeing it passed.”