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 Gov. J.B. Pritzker and his gubernatorial
challenger, state Sen. Darren Bailey, will appear Oct. 18 in Chicago for
Illinois’ second gubernatorial debate.
The final event showcasing the two candidates running for Illinois’ highest
office Nov. 8 comes less than two weeks after their first debate Oct. 6 in
Normal, Illinois.
While both candidates used the opportunity to tout their public service records,
including Pritzker saying he’d balanced four state budgets, increased pension
contributions and provided tax relief to Illinoisans, his claims were a version
of the truth.
Before you watch the debate and vote this November, here is what you need to
know about public policy during Pritzker’s tenure.
Property taxes
While Pritzker reduced residents’ future property tax payments after
consolidating 650 state police and fireman pensions in 2019 and is slowly
sending out one-time rebate checks averaging $200 with only 14% distributed
after a month, Illinoisans’ overall property taxes have still gone up $2,228
since he took office.
Illinois homeowners now spend the second most on property taxes in the U.S. and
more than double the national average.
Other taxes, fees
Pritzker’s Family Relief Plan went into effect July 1, 2022, suspending
Illinois’ 1% grocery tax for one year, delaying an automatic 2.4-cent gas tax
increase until January 2023, reducing the state sales taxes on qualified
clothing and school supplies by 5% for 10 days in August and permanently
expanding earned income tax credits, in addition to issuing income and property
tax rebates.
In total, the temporary relief was projected to save Illinois families $556 over
one year. But full disclosure should also account for the $2,721 more in taxes
Pritzker imposed on families by doubling the state gas tax to the second highest
in the nation, increasing vehicle registration, parking fees and expanding the
state’s online sales tax. He also raised taxes on small business by $65o
million.
Subtract the temporary tax break from the new or higher permanent taxes and fees
and the government under Pritzker ate $2,165 more of the average family’s
income. Illinoisans now pay 2% more of their annual income to state taxes than
before Pritzker took office.
Pritzker told Crain’s Chicago Business that more tax hikes are off the table if
he wins a second term.
Illinois budget
Pritzker has repeatedly claimed to have balanced the state budget each year
since taking office, including a $46.5 billion budget for fiscal year 2023 – the
largest ever passed in Illinois’ history.
However, the balance of the state’s general funds does not consider carried
deficits from previous years for the state’s nation-leading pension debt or
liabilities toward the unemployment insurance fund that still need to be paid.
Factoring in these spending items shows Pritzker has failed to balance a state
budget since taking office, reporting the smallest deficit of his tenure at $1.5
billion for FY 2023.
It does not account for the influx of $14 billion in new federal relief funds to
the state, counties and municipal governments during the pandemic that were used
to pay down existing obligations. Illinois was also the only state to rely on
emergency borrowing from the Federal Reserve to shore up its budget during the
pandemic, bringing in an additional $3.2 billion.
Pritzker did use these fungible relief dollars to refill the state’s rainy-day
fund to over $1 billion and pay off $1.098 billion in owed pre-paid tuition and
state employee health insurance debt.
Pritzker secured six credit upgrades for Illinois since 2021 – the first
upgrades on state bond ratings in more than two decades. Even so, the state
still boasts the worst credit rating in the nation.
The governor further repaid $3.15 billion in Illinois’ unemployment insurance
trust fund debt accumulated during the pandemic, reducing the remaining
liability to $1.35 billion.
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However, because Pritzker missed the loan repayment deadline, and this balance
remains in the red, federal law mandates business owners pay progressively
higher taxes each year until the debt is repaid. It is estimated to have cost
businesses at least $64 million since 2021.
Jobs, employment
Illinois job growth severely lagged the national average when Pritzker took
office in 2019, before COVID-19 pandemic shutdowns drove unemployment to
unprecedented levels. Using emergency powers, Pritzker exacerbated pandemic job
losses by shuttering businesses statewide with varying degrees of success at
limiting virus transmission.
Pritzker’s shutdowns permanently closed 35% of Illinois’ small businesses just
one year into the pandemic. Two years later, the state is still missing 11.1% of
those businesses while the number of small businesses increased 3.1% nationally.
These orders disparately impacted Illinois restaurants and bars, which were the
second last to reopen in the nation. School closures also lead to women leaving
the workforce at nearly three times the rate of comparable dads with children.
Both women and minorities lagged the job recovery rate of white males in
Illinois.
Even now, after pandemic protocols have been lifted by the governor’s decree,
Illinois has one of the worst job recovery rates in the nation. In fact, the
state is still missing 1 in 10 jobs lost at the onset of COVID-19 and reported
the weakest month of job growth in September in more than a year. Illinois does
have the 19th highest vaccination rate in the county.
Pritzker extended his own emergency executive powers for the 34th month in
September as President Joe Biden declared the pandemic official over in the U.S.
He has since issued a 35th disaster proclamation, holding onto these pandemic
powers as the rest of the nation’s governors or state legislators have ended
them.
State business climate
Illinois was the only state to drop in the Tax Foundation’s Business Tax Climate
rankings in the past five years, moving from 29th before Pritzker took office to
36th in 2022. The state’s corporate and property tax rates dropped five spots
during that time.
In the past year, six companies left Illinois including Tyson, Citadel, Boeing,
Caterpillar, FTX and Highland Ventures. The departures occurred the same year
the state was ranked third-worst in the nation to do business by Chief Executive
magazine.
While these companies left, Pritzker did bring in tens of thousands more jobs to
Illinois from other big companies such as Kellogg’s, Rivian and Amazon. In
total, the state has experienced eight consecutive years of outmigration with
the most residents ever leaving in 2021.
Pensions
Illinois was home to the nation’s worst pension debt before Pritzker took
office, reporting $133 billion in unfunded state liabilities in 2018. Moody’s
calculations using more realistic assumptions on returns put that debt at $241
billion.
But since Pritzker became governor, Illinois’ pension debt has skyrocketed an
additional $72 billion – reaching $313 billion in unpaid obligations during
2022, Moody’s calculated. These payments now consume more than 25 cents of every
dollar spent in the state budget.
Pritzker did contribute $500 million more to pension in 2022 than was required
and extended the state’s underperforming pension buyout program until 2026, on
top of consolidating police and fire pensions.
Illinoisans should keep in mind the state is only required to fund 90% of
pension benefits promised to state workers rather than 100% – a money-saving
tactic discouraged by actuaries. This means even were Illinois paying the
minimum, it would still be underfunding pensions.
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