Pritzker after legislature adjourns: 'Illinois is back'

Gambling expansion, capital plan, graduated tax amendment among legislative milestones

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By CAPITOL NEWS ILLINOIS

Staff

SPRINGFIELD – Minutes after the Senate put the final touches on first-term Democratic Gov. J.B. Pritzker's sweeping legislative agenda Sunday, June 2, the governor addressed media and delivered a message: "Illinois is back."

"Today, the people of Illinois can be proud that we are putting state government back on the side of working families," Pritzker said at the news conference. "They can be proud that we are restoring fiscal responsibility after many years of crisis and deficits."

Pritzker stood beside Senate Minority Leader Bill Brady, a Bloomington Republican, and several senators of both parties as he addressed the media in his office after receiving overwhelming bipartisan approval on several key measures.

"Throughout this session, Senate Republicans were not afraid to speak up when needed, and were not afraid to stand together when warranted," Brady said in a statement. "I commend Governor Pritzker for working across the aisle on those key issues that produced bipartisan support.  Now, as we move forward, Senate Republicans will continue to fight for the issues important to Illinois residents."

Pritzker touted the bipartisan process and the working groups that negotiated the budget behind closed doors. The 1,500 page document was released publicly just 12 hours before it was approved.

Legislative leaders from both parties called the $40 billion operating budget a balanced, responsible state funding effort, and Republicans emphasized the inclusion of several pro-business reforms and tax incentives that were added to the package upon their request.

Those measures include tax incentives aimed at enticing data centers to locate in Illinois; eliminating reporting of the retailer's discount in the comptroller's tax expenditure report; eliminating the franchise tax; reinstating the manufacturers purchase credit; and a "Blue Collar Jobs Act to help attract large scale projects."

While the passage of the budget itself gave Pritzker a major victory, it often seemed an afterthought as the General Assembly passed a slew of other hot-button issues.

Those include a $45 billion capital infrastructure plan for road, bridge, building and broadband internet projects, a massive gambling expansion, legalization of recreational marijuana, a reproductive rights expansion bill, a graduated tax constitutional amendment and a minimum wage increase.

The infrastructure plan is the first in more than 10 years and is made possible by revenues expected to come from sports betting licenses, a $1 increase to the state's cigarette tax and a doubling of the state's motor fuel tax to 38 cents from 19 cents along with increased driver's license fees among others.

Upon adjournment, Pritzker said he will work to ensure new policies are implemented correctly before returning for the fall veto session and the second legislative session of his first term.

"Make no mistake. We still have a lot of work ahead," he said. "Our budget and pension challenges unfolded over many years, and they won't go away overnight. We have more big things to do: to bring more efficiencies to state government, to grow our economy at a faster rate, to create jobs, to invest in our future."

Gambling expansion

Six new casinos, along with legalized sports betting, are coming to Illinois after Senate lawmakers approved a massive gambling expansion bill Sunday, June 2.

Senate Bill 690, sponsored by Indian Creek Democratic Sen. Terry Link, passed that chamber on a 46-10 vote after being approved by House lawmakers the day before. Gov. J.B. Pritzker has already announced his intention to sign it into law.

"I've only been doing this for 20 years to get this done, and it's a little emotional," said a teary-eyed Link during floor discussion of the bill.

Link estimated that gambling expansion along with other revenue-raising measures in the bill could net Illinois more than $12 billion in the next six years.

"This key piece of legislation really is going to make an economic difference of keeping our dollars home," he said, adding he expects "thousands of jobs and billions of dollars in construction across the state."

That construction would go toward the six new casinos authorized by the bill in Waukegan, Rockford, Danville, South Suburbs, Williamson County and downtown Chicago.

Casinos, race tracks and sports facilities that seat more than 17,000 people – such as Wrigley Field or United Center – would also be eligible to buy sports betting licenses under the bill, making Illinois one of about a dozen states to legalize the practice after a U.S. Supreme Court ruling last year allowed it.

Revenues raised from the new casinos, the selling of sports betting licenses, and a higher tax on video gambling machines would go toward funding the vertical components of a long-term capital infrastructure plan, such as state building renovations. Sports betting licenses would range from $3.2 million to $20 million and be offered to both brick-and-mortar facilities and to online operators, with taxes of 15 percent.

Under the bill, race tracks in the state would be able to install slot machines and table games, turning them into racinos. A pilot program will also assess sports betting through the Illinois Lottery, a plan that was considered but dropped by lawmakers earlier in the session.

 

House passes budget, capital plan

 

The Illinois House closed out what was perhaps the most monumental legislative sessions in recent memory Saturday,June 1, after passing the final pieces of a budget for the upcoming year and a $45 billion capital improvements program that will be partially funded by expanded gambling.

Those measures, though, were only the finishing touches on a session that also saw passage of a minimum wage increase, a constitutional amendment to overhaul the state's income tax system, legalization of recreational marijuana and a sweeping expansion of abortion rights.

"This has been an extraordinarily productive session of the General Assembly. Simply historic," House Speaker Michael Madigan, D-Chicago, said just before the House adjourned.

Saturday's action in the House effectively marked the end of an intense competition between Democratic and Republican leaders that had threatened to send lawmakers into extended overtime.

The final 48 hours were marked by heated discussions and intense negotiations between Democrats and Republicans and a constant flurry of back-door meetings with House and Senate caucus leaders and Democratic Gov. J.B. Pritzker.

Although Democrats hold supermajorities in both chambers, Republican votes were needed on some key measures to get them over the finish line, especially after the session stretched into Saturday, June 1, which triggered a constitutional requirement that bills taking immediate effect receive three-fifths majorities in both chambers – 71 votes in the House and 36 votes in the Senate.

But Republicans held out because they wanted Democrats to agree to a number of pro-business initiatives that included tax incentives for businesses hiring construction workers for major projects, other incentives for developing high-tech data centers and phasing out the franchise tax, to name a few.

When Democrats finally agreed to those measures, the final pieces of the budget package fell into place with broad bipartisan support.

One of the pieces needed to make the budget work was a revenue bill, Senate Bill 689, which included, among other things, a new tax on Medicaid managed care organizations that will allow the state to draw down additional federal matching funds, freeing up about $390 million in general revenue funds for other purposes. It passed by a vote of 107-to-9.

Another was what's known as a "budget implementation bill," Senate Bill 1814, that spells out specifically how money appropriated to various agencies is to be spent. That bill includes pay increases for home care providers who deliver home and community-based services to the elderly and disabled. It passed by a vote of 97-17.

The final piece was House Bill 142 authorizing the state to issue $1.7 billion in bonds, the proceeds of which will be used to pay down the state's backlog of unpaid invoices, a measure that is expected to save the state hundreds of millions of dollars a year in interest costs.

The capital improvements program also consisted of a package of three bills.

House Bill 62 spells out how the $45 billion will be spent. It calls for $33.2 billion, or about 74 percent of the total, to be spent on roads and bridges, what lawmakers refer to as "horizontal" infrastructure. Another $3.5 billion, or 8 percent of the total, would be spent on K-12 and higher education facilities.

The remainder would be divided between state facilities, environmental conservation projects, deployment of broadband internet, and health care and human service facilities.

The other two bills provide the funding for those projects.

Senate Bill 1939 provides funding for the horizontal projects through a combination of a 19-cent per-gallon increase in the state gasoline tax, increases in vehicle registration fees, especially for electric vehicles, plus a variety of other miscellaneous fees. It passed the House, 83-29.

And House Bill 690 provides funding for the "vertical" infrastructure projects. It includes legalized sports betting and expansion of casino gambling, a $1 per-pack increase in cigarette taxes, new taxes on parking fees, and extending the state sales tax to purchases made remotely, including online purchases from out-of-state retailers that do not have a brick-and-mortar nexus in Illinois. It passed the House, 87-27.

Graduated tax amendment

A constitutional amendment that would allow the General Assembly to set higher tax rates on greater amounts of income passed its last legislative hurdle Monday, May 27, and will head to the voters for final approval about 18 months from now.

After more than three hours of debate in which all 44 House Republicans spoke on the floor, the vote cleared its constitutionally mandated three-fifths majority by two votes. All 73 representatives voting in favor were Democrats.

While Democratic Gov. J.B. Pritzker played no formal role in the legislative process to put the amendment on the ballot, at least one Democrat who previously said he would vote against the bill credited the governor for his sudden switch.

"I was a very vocal critic about this, obviously, I came out with some concerns," Rep. Jonathan Carroll, a Northbrook Democrat, said. "… Gov. Pritzker reached out to me right away, had some conversations with me and heard that my issue is property taxes.

"Along with his help and the help of my colleagues in the House and the Senate, we're going to form a property tax task force to review how we tax in Illinois for property taxes and make sure that we do it better and we do it right."

The state does not levy or collect property taxes in Illinois; only local taxing bodies such as school boards, municipal governments and counties have that authority. The largest contributor to most local tax bills are K-12 schools, which for years have faced funding shortfalls and proration from insufficient revenues provided by the state.

Still, Carroll and Rep. Sam Yingling – a Grayslake Democrat who also said at one time he would vote against the graduated tax – said state action is needed to overhaul the property tax system and the graduated tax is part of that process.

"The current system does not work and we all know that," Yingling said in his floor speech. "The process of property tax restructuring will not be easy. But I submit that that process begins today."

Republicans, however, were more skeptical of any actual tax relief coming from the bill, and House Minority Leader Jim Durkin, R-Western Springs, accused the governor of "horse trading" in order to get the 73 votes in favor.

"Let's make no mistake. Today's vote is the end result of the Illinois Democrats' historical, ravenous, irresponsible budgeting and spending," Durkin said. "However it was also clear that today's vote was a fait accompli. It's a foregone conclusion.

"I know how this bill went down. I know how this amendment went down. And please, don't think that there wasn't any horse trading to get these votes. I know better, you know better, we know better."

Senate Joint Resolution Constitutional Amendment 1's passage means the voters, in November 2020, will be given the opportunity to decide whether the state can have the authority to set graduated tax rates. Either 60 percent of those voting on the question or the majority of those voting in the election will have to support the measure for it to become law.

CONTACT: michael@austinweeklynews.com 

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