Price range wages in Springfield

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Budget wages in Springfield

SPRINGFIELD – As the General Assembly prepares to return to Springfield on Tuesday, state lawmakers argue with officials in Governor JB Pritzker’s administration over proposed tax changes for fiscal 2022.

In his budget proposal released in February, Pritzker outlined nine changes to corporate income tax law that aim to generate $ 932 million in revenue for the state in order to maintain a balanced budget while reducing income taxes and government spending for the fiscal year beginning July 1 22 to leave unchanged.

“The governor’s budget proposal is sensible and balanced,” IDOR Director David Harris told lawmakers last week during the joint hearing of the Senate Revenue and Appropriations Committees. “If passed as suggested by (Governor Pritzker), there would be an estimated $ 120 million surplus by the end of Fiscal Year 22.”

The biggest change would be to limit how much companies can deduct from taxes due to their losses in any given year. Under current tax law, a company can take its net operating loss and reduce by that amount the amount of its income that will be taxable in future years.

Pritzker’s proposal would cap the deduction to $ 100,000 per year for the next three years, which IDOR estimates would save the state $ 22,314 million in fiscal year.

Harris said the state’s 2,800 corporation taxpayers deducted $ 6.4 billion in net operating losses from their taxes in 2018. Only 84 of those corporate taxpayers that year posted operating losses of $ 3.5 billion.

The Pritzker administration has described the changes as “closing tax loopholes for companies”. Three of the nine proposals for tax legislation were implemented by Pritzker as part of budget negotiations with Republicans in 2019.

The budget proposal put forward by Pritzker in 2019 was augmented with a gradual abolition of corporate income tax, an addition to real estate qualifying for the state machine and equipment tax exemption, and a tax deduction for creating new jobs in construction with secure Republican support.

All three provisions would be delayed or canceled in the governor’s plan to generate savings of approximately $ 102 million for fiscal year 22

That third provision – the Blue Collar Jobs Act – was due to come into effect in January. However, implementation of the tax credit was delayed by Pritzker, who cited losses in tax revenue due to the coronavirus pandemic.

State Senator Chapin Rose, R-Mahomet, asked why a program that was passed with the support of both parties should be cut if the state expects a surplus.

“Here we are at the end of COVID with Illinois being one of the top states in the country for unemployment, people in dire need of work,” said Rose. “Why on earth did the government – did Governor Pritzker – decide that he was going to step down now, back from, back from, back, his word, his promise when he signed the Blue Collar Jobs Act?”

State Senator Linda Holmes, D-Aurora, reiterated his concern.

“I hesitate a little, wondering if this is almost a poison pill when we talk about getting rid of some of the recent tax changes,” she said.

Other corporate tax changes that were of concern at the hearing include the reduction of a tax credit for individuals and businesses contributing to private school scholarships, a cap on the reimbursement retailers receive from collecting sales tax, and the expiry a sales tax exemption for biodiesel fuel.

Several business associations have submitted either oral or written statements against the proposals, including the Illinois Manufacturers’ Association, the Taxpayers Federation of Illinois, and the Illinois Retail Merchants Association.

Greg Cox of the Illinois Soybean Growers Association said he appreciated the difficulty of Sturm’s position in that “it was given the job of building a budget with no general tax increases and flat-rate expenses.” However, he said there would be serious policy implications for the reduction in the biodiesel fuel exemption.

Those impacts are increased air pollution as more gasoline and less biodiesel are used in fuel blends, and the potential loss of 2,000 jobs is caused by the biodiesel fuel industry in Illinois, the largest soybean producer in the country.