Pritzker debt-reduction approved as watchdog praises plan

SPRINGFIELD, Ill. (AP) - A respected tax and budget watchdog on Thursday praised Gov. J.B. Pritzker's budget proposal for cautious spending and paying bills just hours before the Senate approved a debt-reduction package as part of a proposed $45.4 billion spending plan.

The nonpartisan Civic Federation's analysis fueled the celebration by Pritzker and Democratic lawmakers after the Legislature, over minority Republican objections, approved using $2.7 billion in federal pandemic-relief money to backfill the $4.5 billion hole in the Unemployment Insurance Trust Fund, battered by COVID-19 business closures.

The proposal, which Pritzker hoped to sign Thursday evening, also pays off $898 in backlogged employee group health insurance claims, puts up $230 million for uncovered liabilities in the College Illinois Savings program and puts an advance payment of $300 million into long-underfunded employee retirement accounts.

"Today our bills are paid on time. Our most pressing short term debts are nearly gone," Pritzker said at an afternoon news conference. 'œOur credit ratings are up and our most critical long term financial liabilities are in the best fiscal shape they have been in since before the turn of the century.'ť

Civic Federation President Laurence Msall said it's good news that tax revenues that bounced back much more quickly from the pandemic than expected are going into overdue bills - and an unprecedented $900 million installment in a rainy day fund.

The budget marks significant progress in eliminating debt problems that prohibit long-term planning, Msall said, but more is necessary.

'œWithout the pressure of a budget deficit and billions of dollars in unpaid bills, the state should embrace this opportunity to come up with a long-term vision for how it will maintain budgetary balance and financial stability into the future," the report said.

Republicans largely opposed the debt-payment legislation, which the House OK'd Wednesday night, arguing the entire debt should be paid immediately using proceeds from $8 billion the state has received from Washington to battle pandemic problems. Finding money to pay the balance will mean higher unemployment taxes on businesses and shortened benefits for future recipients.

But Rep. Jay Hoffman, a Democrat from Swansea, said the final solution must find agreement among business and labor leaders. Nothing will be approved without their buy-in.

Pritzker's election-year budget plan includes tax relief he says will help consumers weary of high inflation. The Civic Federation endorses favors most of the proposal, which includes a one-year suspension on the 1% sales tax on groceries and a one-time rebate of about $300 per homeowner on property taxes.

But Msall said a plan to halt a cost-of-living increase in the motor fuel tax to pay for roads, bridges and other transportation-related improvements is a departure from the thoughtful and forward-looking approach to the rest of the budget. The gasoline tax was indexed to inflation in 2019 to keep pace with costs and was scheduled to increase to 41.4 cents per gallon July 1.

'œThe first time that inflation seems to be going up, the state says, well, we weren't really serious ...," Msall said. 'œOnce it (the state) starts down a path to provide relief that it can't afford, it is very difficult to stop.'ť

Transportation advocates agree. Although it would only cost the state $135 million, they say the effect would be devastating in terms of timely completion of projects.


Follow Political Writer John O'Connor at

House Assistant Majority Leader Jay Hoffman, D-Swansea, addresses reporters Thursday, March 24, 2022, in Springfield, Ill., about legislation approved by the General Assembly to pay down a $4.5 billion debt in the state's Unemployment Insurance Trust Fund. The legislation came on a day that the respected, nonpartisan Civic Federation released a favorable review of Gov. J.B. Pritzker's budget proposal because of its cautious approach. (AP Photo/John O'Connor) The Associated Press
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