Illinois Governor JB Pritzker delivered his first budget address Wednesday in Springfield.
The governor reiterated his desire to lead the charge to enact a fair tax system in Illinois. He said it would set the state on a path to sustainable growth.
"It is not fair that I pay the same tax rate as a teacher, a child care worker, a police officer or a nurse. And efforts to simply increase the income tax rate across the board fuels further income inequality and kicks the can down the road for our children and grandchildren to solve our ongoing budget issues."
Pritzker says he will vigorously pursue a fair tax system over the next two years to determine rate structures and how much revenue is needed.
Pritzker says he has a plan to address the state's nine-billion dollar pension liability.
During his budget address, the governor said he has a five-point plan that includes his fair income tax proposal.
"We will dedicate a portion of the new fair income tax - in other words, hundreds of millions of dollars - to the pension system, over and above our required pension payments. We will infuse new assets into the system up front. We will manage our debt through a small-scale pension bond used entirely for reducing our liability."
Pritzker says the fair tax must be part of the long-term solution to the pension crisis. His plan also includes making the optional retiree buyout program permanent.
Southern Illinois republican Senator Paul Schimpf says he doesn't think the governor has a viable plan when it comes to pension obligations.
"I don't think we can solve our pension problem by borrowing more money and skipping pension payments and extending the time to make those payments."
But, Harrisburg GOP Senator Dale Fowler says he's hopeful about some of Pritzker's revenue generation proposals.
"He's talked about sports gaming, recreational marijuana, and some other things. That's some hopeful revenues that we're not sure about how those revenues will come in."
Fowler and Schimpf say they won't jump to conclusions since budget negotiations now begin in earnest following the governor's proposal.
Illinois' governor wants to provide higher education with more money. Pritzker said college affordability is a paramount investment in near term economic growth for the state.
"I've proposed a 5 percent increase for public universities and community colleges, as well as an increase in the Monetary Award Program by $50 million to help more than 15,000 more low- and moderate-income students attend college next year."
Pritzker is also proposing 35-million dollars for the second-year costs of the AIM HIGH merit scholarship program for high achieving students to keep Illinois' best and brightest students in the state.
He says a significant part of Illinois' fiscal and economic health depends on a sustained effort to restore and improve the state's education system.
The governor mentioned how real focus on the learning that happens from birth to age 5 can determine the entire arc of a person's life.
"Investing in early childhood is the single most important education policy decision government can make, and it has proven to provide a significant return on investment."
Pritzker says he's proposing funding the Early Childhood Block Grant at $594 million, an increase of $100 million from fiscal year 2019. He says this could lead to universal preschool so that every child in Illinois will have a real opportunity to succeed.
Gov. Pritzker plans to raise $75 million for his proposed budget by capping the amount of money retailers can keep for collecting sales tax for the state.
He also said Wednesday he wants to impose a 5-cent plastic bag fee.
Retailers may keep 1.75 percent of the money they collect from the state's 6.25 percent sales tax. Pritzker would cap that at $1,000 per month. The Illinois Retail Merchants Association is concerned about it.
Pritzker spokeswoman Jordan Abudayyeh says the majority of retailers would see no reduction in discount. She says taxable retail sales are concentrated among a relatively small number of high-volume stores.
Pritzker says a plastic bag tax would raise $20 million for the state. Chicago has a 7-cent bag tax. Retailers there keep 2 cents of that.
Pritzker is proposing a 32-cents-per-pack hike in the state's cigarette. The state tax on cigarettes is currently $1.98 per pack. It was last raised by $1 in 2012.
The governor's budget proposal totals $39 billion.
