Pritzker budget proposal aims to ease ‘pinch of inflation’ with $1 billion in tax relief

Gov. J.B. Pritzker speaks at a Jan. 3 news conference in the Loop. | Anthony Vazquez/Sun-Times file

Gov. J.B. Pritzker’s latest state budget proposal will aim to ease the “pinch of inflation” for Illinois residents by providing almost $1 billion in tax cuts, freezes and rebates while maintaining “fiscal sanity and discipline,” his top aides say.

The Democratic governor’s election-year spending plan, scheduled to be unveiled this week, promises to hold the line on the state income tax while providing relief in the grocery store, at the gas pump and on property tax bills, according to a budget preview from Pritzker’s office.

The relief includes a suspension of the 1% state tax on groceries during the fiscal year starting July 1, which would save residents an estimated $360 million, Deputy Gov. Andy Manar said Friday.

Grocery tax revenue is earmarked for local municipalities, which will still be “made whole” by other state revenue, Manar said.

Pritzker’s proposal would also suspend a 2-cent-per-gallon increase to the gas tax that was scheduled to kick in this summer, keeping about $135 million in residents’ pockets.

The gas tax hike was a key funding component of Pritzker’s signature $45 billion capital infrastructure improvement plan that was implemented in 2019. Manar said the one-year freeze “will not have an impact on the overall program” and won’t interrupt work already underway on many of the state’s aging roads and bridges.

Then-state Sen. Andy Manar, pictured at the City Club of Chicago in 2016.

The largest relief package floated by Pritzker would send homeowners direct rebates of up to $300 on their property tax bills, for a total of about $475 million, said Manar, Pritzker’s top budget adviser.

Homeowners will still be able to deduct 5% of their property tax bills up to $300 from their income taxes, but the new plan would double the value of that deduction with a direct one-time payment. Manar said it would be up to the General Assembly to work out the specifics of that measure, including when homeowners might expect a check.

“They’re feeling the pinch of inflation, and the governor, again, is prioritizing relief for families,” he said.

The governor’s office wouldn’t provide an early look at other figures from Pritzker’s proposal, including how it might address structural deficits that linger in the current $42.2 billion budget or the state’s nearly insolvent pension funds.

Last year, the governor’s proposal included a $3 billion shortfall, but an influx of federal COVID-19 relief funds prompted his office to spend an additional $350 million in education funding.

Manar pointed to the state’s improved credit ratings and said the proposed budget “will continue the path that [Pritzker] set the state on, which is fiscal sanity and discipline.”

Pritzker is scheduled to outline the full budget Wednesday in Springfield when he delivers his “State of the State” address, which will be held in person at the Illinois State Capitol, following last year’s virtual presentation due to COVID-19.

This will be the freshman governor’s first such address held during an election year with him on the ballot.

Then-gubernatorial nominee J.B. Pritzker and his running mate, Julianna Stratton, celebrate their win in the Democratic primary in 2018.

Five Republicans are vying for the chance to face him in November: former state Sen. Paul Schimpf of Waterloo, state Sen. Darren Bailey of Xenia, Bull Valley businessman Gary Rabine, venture capitalist Jesse Sullivan of Petersburg and Aurora Mayor Richard Irvin.