Democrats lurch toward finish line on budget as House breaks for remainder of holiday weekend

SPRINGFIELD — The challenges of reaching consensus among the various factions of the big-tent Democratic supermajorities in the Illinois legislature were on full display as lawmakers continued working into Memorial Day weekend after blowing through Friday’s self-imposed deadline to pass a state budget.

Despite advantages over Republicans of 77-40 in the Illinois House and 40-19 in the state Senate, it took Democrats until late on the final scheduled day of the truncated election-year spring session to introduce the initial version of a more than $50 billion spending plan.

A full day after Senate Democrats unveiled a 3,374-page proposal, there had yet to be a vote on the spending plan or related tax increases, and the House adjourned late Saturday, sending members home for the rest of the holiday weekend. The Senate was expected to be in session Sunday.

As it stands, the earliest lawmakers could send a final budget to Gov. J.B. Pritzker’s desk is Tuesday.

After several years of unexpectedly high revenues, lawmakers faced perhaps the most challenging budget season since the first year of the COVID-19 pandemic, and there was pushback from various fronts to aspects of Pritzker’s proposed $52.7 billion spending plan and accompanying tax increases of more than $900 million.

Despite the delays, however, Democrats sought to downplay divisions, with House Speaker Emanuel “Chris” Welch saying in a statement after sending members home that “the House and Senate are very close to an agreement on a final budget.”

“It’s just a matter of getting everybody comfortable in where we’re at — what spending, what revenue,” said state Rep. Bob Rita, a veteran Democrat from Blue Island who chairs the powerful House Executive Committee. “Each session is different, but as you come closer to adjournment, it’s not unusual to be doing what we’re doing.”

Sen. Laura Murphy of Des Plaines put it more succinctly: “We’re going to get it done,” she said, declining to comment further as she headed to a committee hearing.

Even as negotiators continued hashing out a final agreement among House and Senate Democrats and the governor’s office, details of the budget framework became clearer Saturday as components were filed throughout the afternoon.

Overall, the final spending plan for the budget year that begins July 1 likely will hew closely to what Pritzker laid out in his February budget address.

While Senate President Don Harmon said Friday that Pritzker’s tax proposals had received pushback, key pitches from the governor largely made it into the Senate’s revenue proposal unscathed. Senate Democrats estimated their proposal would generate $750 million in new operating revenue.

A $500,000 cap on losses large corporations can write off on their state income taxes, which Pritzker previously estimated would bring in $526 million in revenue, appeared in the Senate bill, as did a $1,000 monthly limit on the discount that retailers receive for collecting state taxes. The retailer proposal would generate another $101 million, Pritzker previously said.

One proposal that changed slightly from Pritzker’s initial proposal in the Senate bill was the increase in the state sports betting tax, which sportsbooks forcefully lobbied against in recent weeks.

In the bill the Senate introduced, the tax would be graduated into several tiers with the largest sportsbooks paying a 40% tax and the smallest paying 20%. Pritzker had initially proposed flatly raising the sports betting tax from its current rate of 15% to 35%.

The structure as proposed in the Senate bill would bring in a little more than $200 million, a Pritzker spokesperson said, similar to the estimate with the flat tax Pritzker proposed earlier this year.

The additional revenue would largely go to the state’s general fund, rather than its fund for capital projects, also in line with Pritzker’s February proposal.

Rita, who also sits on the House Gaming Committee, said he hadn’t looked closely into the proposed Senate language but that a graduated tax makes sense for sportsbooks.

“The idea is to generate revenue without putting them in jeopardy,” Rita said. When the legislature first passed sports betting legislation, it was fairly new across the country, but now the state has a “very, very successful program,” he said.

Pritzker spokeswoman Jordan Abudayyeh in a social media post dismissed the idea that sportsbooks might leave Illinois due to higher taxes.

“The ‘I’m going to stop making money because I have to pay more in taxes’ line is one of the weirdest arguments people make under this dome and people still repeat it like it’s a real threat,” Abudayyeh wrote.

Spokespeople for the trade association representing FanDuel, DraftKings and other sportsbooks did not immediately respond to a request for comment Saturday.

A late addition to the tax mix was a proposed 1% increase on video gambling devices at bars, restaurants and truck stops. Revenue from the machines helps pay for capital construction projects.

Harmon, an Oak Park Democrat, on Friday pointed to the late-emerging issue as one of the causes for delayed action on the budget.

“We need to make sure the spending priorities reflect the will of the body,” Harmon said shortly before the Senate’s initial spending plan was filed. “And this year, we’ve had to look at a variety of the revenue items the governor proposed. And there’s been some pushback, some suggestions to do things in slightly different ways.

“It requires some nimbleness here late in the game to unpack those and see if they’ll work,” he said.

Flagship spending proposals the governor laid out in his February budget address were part of the Senate measure released Friday, which Pritzker spokesman Alex Gough said reflected “an agreement in principle” among the governor, Harmon and Welch. Few changes were expected to those items.

Among Pritzker’s priorities that found their way into the Senate measure were a pilot program to purchase Illinois residents’ medical debt at a discount, which the governor’s office says could fund exponential debt relief for hundreds of thousands of families. Also included were funds for the Department of Early Childhood, the new agency that both chambers voted to create this session.

There also appeared to be consensus on raising funding for elementary and secondary education by the minimum $350 million laid out in the state’s school funding formula, a likely disappointment for Chicago Public Schools and the Chicago Teachers Union, which pushed for a much larger increase.

It also drew criticism from Rep. Will Davis, a Democrat from south suburban Homewood who leads the appropriations committee overseeing K-12 funding. Davis, who has pushed for greater funding for years, said lawmakers have become accustomed to the minimum funding level.

“We know there’s a lot of money being spent,” Davis said Friday night of the Senate’s proposed budget. “There are a lot of increases in that budget in a lot of other places other than K-12, and I guess that seems to be everyone’s priority where K-12 is not.”

One area where lawmakers are looking to raise the ante from Pritzker’s initial proposal is a state income tax credit for families with children.

Pritzker had proposed a credit totaling $12 million, but a measure filed Saturday would create credits totaling $50 million for the current tax year and $100 million for future years, said Sen. Omar Aquino, a Chicago Democrat who has advocated for creating an even larger credit.

“It’s always a victory when we can get monies back into the taxpayers’ pockets, especially working-class folks that certainly could use it, especially during these inflationary times,” Aquino said.

Another issue on which there appears to be broad agreement is repealing the 1% statewide sales tax on groceries. Ditching the tax won’t affect the state’s bottom line because the money all goes to local governments.

Pritzker, who included the proposal in his budget blueprint in February, dug in his heels in the face of strong opposition from local leaders who worried about the impact it would have on their coffers.

Eliminating the tax has both progressive and populist appeal in an election year when voters remain concerned about high prices at the checkout line, and it comes after Pritzker and Democrats, along with reluctant Republicans, suspended the tax for a year amid the 2022 election.

The GOP criticized that move as an election-year gimmick, and Pritzker has used that line of attack to argue he took Republicans up on their suggestion to make the change permanent.

Under the budget framework that Pritzker and the Democratic legislative leaders agreed on, the tax would be permanently eliminated on Jan. 1, 2026.

To make up for the lost revenue, municipalities — both those with broader home rule powers to raise taxes on their own and non-home-rule communities — would be granted the ability to levy their own 1% tax on groceries. Towns without home rule would be given the ability to tack on an additional 1 percentage point tax on general retail sales.

Along with other concessions, the proposal on the table was enough to win the support of the Illinois Municipal League, which represents local governments across the state.

“We are pleased with the overall framework of the issues affecting municipalities,” Brad Cole, CEO of the Illinois Municipal League, said in a statement. “Local leaders have long advocated for greater authority to provide for the programs and services their residents rely on every day, which they will be granted under this budget agreement.”

Even as the details of the budget were cobbled together, several lawmakers continued to push for specific programs.

Behavioral health advocates expressed concerns about maintaining funding for what they see as vital programs to address difficulties in accessing care and workforce shortages. At a news conference Friday afternoon, several state representatives stressed the need for a $13 million program providing campus mental health services at public colleges and universities throughout the state.

“We are here to remind everyone that we are in a mental health crisis across the lifespan,” Chicago Democratic Rep. Lindsey LaPointe, who chairs the House Mental Health and Addiction Committee, said during the news conference. “Our budget has to reflect that.”

The Senate’s proposed budget allocated $7 million for the Illinois Board of Higher Education and $6 million to the Illinois Community College Board for implementing the program. Some advocates said they wanted to fund the program to $22.5 million, but LaPointe said she is satisfied with the $13 million total.

Other lawmakers were hesitant to draw any conclusions about the budget until seeing the final details.

Rep. Curtis Tarver, a Democrat from the South Side of Chicago, said Saturday evening he still didn’t have a strong grasp of what was in the budget.

“We don’t have any idea until we see what’s on paper,” he said.

That sentiment was shared by Republicans, who also were largely in the dark.

“We’re all frustrated,” said Sen. Chapin Rose, a Republican from Mahomet.

“Where is it? What’s in it?” Rose asked. “Do they have their act together?”