Illinois’ $3.9 billion budget shortfall was expected to take a back seat during the General Assembly’s six-day lame-duck session, but Gov. J.B. Pritzker thrust the state’s finances into the spotlight on Friday with a proposal his office says would prevent the state from losing $500 million in tax revenue from businesses.
Pritzker wants to block a change to the federal tax code, approved by Congress last year as part of its coronavirus relief plan, from applying to state tax bills. The change temporarily allows some taxpayers to deduct certain business losses immediately from their 2020 taxes rather than spreading deductions out over several years. Pritzker is asking lawmakers to “decouple” state tax law from that provision.
Pritzker also announced that he’s suspending $20 million in state tax credits that would have been available to companies already receiving other state incentives for wages paid to construction workers on relocation and expansion projects.
In a statement, Pritzker acknowledged the trouble the COVID-19 pandemic has created for businesses, but noted the state has its own problems.
“Unfortunately, COVID also hit our state budget, requiring tough choices about what we can and cannot afford,” he said. “Right now, we cannot afford to expand tax breaks to businesses that already receive tax breaks.”
Pritzker and lawmakers are grappling with budget problems exacerbated by the pandemic-induced economic slowdown and voters’ rejection of a proposed amendment to the Illinois Constitution that would have allowed for a graduated-rate income tax. The governor last month proposed about $700 million in state budget cuts.
Republicans, who’ve criticized the Democratic governor throughout the pandemic for the effect his public health orders have had on businesses, attacked the proposals he unveiled on Friday as another hit for the Illinois economy.
“For the governor to decide that the state’s bottom line is more important than these businesses’ bottom line is something that we’re really outraged by,” said state Rep. Avery Bourne, a Republican from Morrisonville.
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Lawmakers are expected to spend the next several days of the lame-duck session debating legislation backed by the Black Caucus aimed at addressing racial inequality in education, health care, the economy and the criminal justice system.
A major criminal justice overhaul proposal filed this week would do away with cash bail and limit police unions to bargaining over wages and benefits. A separate measure filed Friday and backed by Illinois Attorney General Kwame Raoul would give greater power to the Illinois Law Enforcement Training and Standards Board to investigate allegations of police misconduct and decertify officers.
The proposal also would improve information sharing between law enforcement agencies regarding officers’ disciplinary records.
The legislation is the result of discussions with groups ranging from law enforcement associations to the American Civil Liberties Union after Raoul first proposed a new licensing process for police officers amid the public outcry over the death of George Floyd at the hands of a white Minneapolis police officer in May, the attorney general said.
“It’s something that shouldn’t be characterized as anti-law enforcement,” Raoul said. “It’s actually very much pro-law enforcement, pro the integrity of law enforcement.”
His office is still reviewing the larger criminal justice overhaul proposal, but Raoul is backing one provision that would give his office the authority to investigate law enforcement agencies in the state for a “pattern or practice” of unconstitutional policing. That would be similar to the U.S. Department of Justice investigation that eventually led to a consent decree with the Chicago Police Department after the murder of Laquan McDonald in 2014 by Officer Jason Van Dyke.
House Democrats spent part of Friday afternoon behind closed doors discussing criminal justice reform. But the first bill to get a public hearing when the chamber gaveled into session in its pandemic-era home on the floor of the Bank of Springfield Center was a proposal to allow liquor to be delivered to people’s homes.
The measure is a follow-up to “cocktails-to-go” legislation passed during the legislature’s May special session. That measure, which took effect in June, aimed to help bars and restaurants struggling through widespread business restrictions during the pandemic, allowing for them to offer mixed drinks in labeled containers with tamper-proof caps, to go.
The new measure that a House committee advanced on Friday would allow liquor purchased from a licensed retailer to be delivered or picked up curbside.
In true pandemic fashion, and in what Democratic Rep. Mike Zalewski called “a first-of-its-kind moment,” the House Executive committee heard testimony through a Zoom videoconference.
While officially neutral on the bill, Danielle D’Alessandro, the executive director of the Illinois Craft Brewers’ Guild, said the new legislation, like last year’s cocktails-to-go bill, excludes small producers from being able to deliver directly to Illinois customers.