Illinois Governor Faces $800 Million Budget Shortfall Amid Tax Hike Criticism

In Illinois, Governor J.B. Pritzker’s $53 billion proposed budget for 2025 is facing criticism as it appears that there may be a shortfall in revenue. A memo from Deputy Gov. Andy Manar has instructed state agency directors to prepare for a potential $800 million decrease in available revenue for the upcoming fiscal year. This news comes after Pritzker touted the budget as balanced, but now it seems that the numbers don’t add up, and Republicans are seizing the opportunity to voice their long-held concerns.

Pritzker’s budget proposal included about $1 billion in tax increases, including a controversial tax hike on the net operating loss deduction for businesses, estimated to raise about $526 million. This particular tax increase has met significant opposition from the state’s job creators. Republican lawmakers held a news conference expressing their skepticism with State Rep. Adam Niemerg questioning Pritzker’s priorities and expressing disbelief at the proposed tax increases on working people while illegal immigrants receive government assistance. The funding of noncitizen care, totaling about $1 billion in housing, health care, and food costs over the past year-plus, has also been a point of contention for the Republicans.

State Rep. Marty McLaughlin, who is a member of the Commission on Government Forecasting and Accountability, pointed out that new taxes would be necessary to balance Pritzker’s proposed spending plan, highlighting a discrepancy between the governor’s optimistic fiscal forecast and the reality of the budget shortfall. State Rep. Chris Miller criticized the lack of fiscal discipline from the governor and the Democratic-controlled General Assembly, claiming that they have increased government spending by $15 billion since Pritzker took office without having enough money to cover the costs.

With the General Assembly having until May 31 to pass a budget with simple majorities, the debate over the budget shortfall and tax increases is expected to intensify. This situation has brought to the forefront long-standing concerns from Republicans, who see the proposed tax increases as detrimental to working people and the state’s economic prospects.

Written by Staff Reports

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