ILLINOIS POLICY INSTITUTE: ILLINOIS' RECORD-HIGH BUDGET COST RESIDENTS, BUSINESSES $1.1 BILLION IN NEW TAXES

SPRINGFIELD, Illinois, May 30 (TNSres) -- The Illinois Policy Institute issued the following news release on May 28, 2024:

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Illinois' record-high budget cost residents, businesses $1.1 billion in new taxes

Illinois Policy Institute analysis shows the states' $53.1 billion budget spends about $410 million more and taxes about $200 million more than Pritzker proposed

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Today, Illinois lawmakers passed a record-high $53.1 billion fiscal spending plan for 2025, the largest in state history and more than Gov. J.B. Pritzker requested.

Analysis from the Illinois Policy Institute shows (https://illinoispolicy.us1.list-manage.com/track/click?u=7fe208d3c85ffa1d03aeaade4&id=ec124ab341&e=56be2d2c7d) the budget includes roughly $1.1 billion in tax hikes, over $200 million more than what Pritzker proposed. It now moves to Pritzker for approval.

The largest line item in the budget is Illinois' pension contributions. Pension expenses are nearly $10.5 billion, or 20% of the state's general funds budget, and nearly $11.6 billion across all state funds. Lawmakers floated plans for Tier 2 pension reform, but never determined the costs. They did not implement any of their benefit plan increases or pursue funding changes proposed by Pritzker.

"While Illinois is in dire need of pension reform, lawmakers rushing through unstudied changes would've been disastrous for Illinois taxpayers," said Bryce Hill, director of fiscal and economic research at the Illinois Policy Institute. "Fortunately, legislators pumped the brakes on proposals that would've ineffectively changed Illinois' future pension funding and benefit increases without knowing the cost to taxpayers. While Tier 2 changes are needed, the only solution to the Illinois pension crisis is through a constitutional amendment. Without one, Illinois taxpayers will continue seeing new tax hikes and a reduction in services."

Tax hikes included in the 2025 budget:

* Extends cap on net operating loss deductions. Companies losing money will face a $526 million tax hike this fiscal year because of the extension of a policy that limits how much revenue loss can be claimed on corporate income taxes.

* Sports wagering tax increase. The new progressive structure uses rates ranging from 20% to 40% depending on operators' gross revenues, which is expected to cost sportsbooks an additional $200 million.

* Cap retailers discount. This will limit how much businesses are allowed to keep for collecting sales taxes for the state and local governments. The measure would effectively raise taxes by $186 million on retailers.

* A re-renters tax. A change to Illinois' hotel tax will now make third-party companies who resell large blocks of hotel room reservations pay the standard hotel operator's room occupancy tax. It's expected to increase state revenues by $25 million and local revenues by $35 million.

* Video game tax. Illinois video gaming tax will also be increased, collecting an additional $35 million for the state.

* Managed Care Organization assessment. Lawmakers are also banking on a $200 million increase in revenues from health insurance companies. No additional details have been given.

"Imposing new tax hikes on a shrinking population will exacerbate the outmigration crisis in Illinois. Illinoisans are forced to keep up with lawmakers' unhealthy spending patterns, which drive away businesses and residents. Instead of increasing the burden, lawmakers should be looking for ways to reduce taxes and spending. Without major changes, Illinois will continue to be an unaffordable state to live and do business in," Hill said.

To read in-depth about Illinois' latest budget, visit illin.is/2025budget.

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Original text here: https://www.illinoispolicy.org/press-releases/illinois-record-high-budget-cost-residents-businesses-1-1-billion-in-new-taxes/