SPRINGFIELD, IL — In the final weeks of session at the Illinois statehouse, there are growing demands on how to pay out tax dollars, including billions left over from federal COVID-19 relief.
Both the Illinois House and Senate return Tuesday with a scheduled adjournment of April 8. It’s expected they’ll finish up business, including passing a more than $42 billion state spending plan by then.
There are other issues that are expected to be tackled outside of the state budget. The ongoing unemployment debt of about $4.5 billion is costing Illinois taxpayers millions of dollars in interest.
House Majority Leader Greg Harris, D-Chicago, last week said about $2 billion of the leftover $3.5 billion in federal COVID-19 tax funds could be earmarked for that debt. The rest could be paid off by more state borrowing, but it’s still a moving target.
“Those talks I’m told are going very well where business and labor are trying to work with us to find a solution that’s going to be fair and equitable to everyone involved and then bring us not only back to zero but bring us a surplus in those trust fund balances,” Harris said.
There’s going to be a balancing act for those leftover federal funds as groups ranging from the hospitality sector to home care workers are looking for more tax dollars.
“We have to look at all of these,” Harris said. “We’re gonna have to weigh these things, and we’re gonna have to make some difficult choices on all these fronts.”
With record fuel prices, efforts to lower taxes paid per gallon of gas in Illinois are being promoted, but which way they will go remains uncertain.
Gov. J.B. Pritzker’s proposed budget included freezing the looming annual Illinois gas tax increase pegged to inflation. But a lot has changed since last month.
“We are looking at ways that we can reduce the gas tax across the state of Illinois,” Pritzker said last week. “We recognize even since I’ve introduced my budget, that war [between Russia and Ukraine] has now broken out.”
Republicans are looking to cap the sales tax that’s on top of the state’s motor fuel tax.
Illinois Fuel and Retail Association’s Josh Sharp said if nothing is done, border area gas stations will be hurt the hardest as neighboring states have cheaper gas.
“We’re going to do less volumes. More of that business is going out of state” Sharp said earlier this month. “It’s really only Illinois fuel retailers and motorists that feel the pinch. The state of Illinois is going to walk away with a lot more money than they thought.”