Illinois governor’s proposed budget includes sports betting tax hike from 15% to 35%

February 21, 2024 7:49 PM
Photo: Shutterstock
  • Sophia Tareen, Associated Press
February 21, 2024 7:49 PM
  • Sophia Tareen, Associated Press

CHICAGO (AP) — Illinois Gov. J.B. Pritzker pitched a $52.7 billion state spending plan Wednesday with more money to address the migrant crisis, education and quantum computing, while proposing tax increases that will mostly target business, including a major sports betting tax hike.

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The second-term Democrat characterized the proposed budget for the fiscal year that starts July 1, and representing a roughly 2% increase in spending, as “focused and disciplined.”

“I wish we had big surpluses to work with this year to take on every one of the very real challenges we face,” Pritzker told lawmakers in Springfield during the budget combined with the yearly State of the State address. “It’s important to note, that while this budget is tight this year, our fiscal house is in order, and we are able to keep our commitments to the people of Illinois.”

Funding for asylum seekers is expected to be among the most controversial issues as lawmakers in the Democrat-majority House and Senate begin budget negotiations. House Speaker Emanuel “Chris” Welch has already convened a panel on new arrivals while Republicans vow to target sanctuary laws. Illinois has already invested $638 million to address the crisis.

The budget proposal includes another $182 million for migrants, part of a joint funding plan with Cook County. The money would be used for “welcoming center” services, like coordinating housing and legal help, and a program used to fight homelessness.

Chicago, which has allocated roughly $150 million in the city budget, has struggled to house and care for the nearly 36,000 asylum seekers who have arrived since 2022 on buses and planes largely under the direction of Texas Gov. Greg Abbott. While migrants are still arriving, recent weeks have seen the pace slow, coinciding with a dip at the border attributed partially to the weather.

Abbott has said the federal government should step up, but Pritzker has repeatedly blamed the Republican governor for manufacturing a crisis that has been cruel to families. Pritzker ratcheted up the criticism during his speech, which comes as immigration has moved to the forefront of presidential year politics and Chicago prepares to host the Democratic National Convention in August.

“Abbott willfully planned the arrival of these individuals in locations and at times that would engender the maximum chaos for the city of Chicago and for the asylum seekers themselves,” Pritzker said. “Children, pregnant women, and the elderly have been sent here in the dead of night, left far from our designated welcome centers, in freezing temperatures, wearing flip flops and T-shirts. Think about that the next time a politician from Texas wants to lecture you about being a good Christian.”

Late last year, Pritzker’s budget office had predicted a nearly $900 million shortfall, but his budget office said Wednesday that the deficit is smaller than anticipated and outlined new revenues to help close the gap.

That includes more than doubling the sports wagering tax — paid by casino sportsbooks — to 35% from 15%, generating an estimated $200 million. Pritzker also wants to cap a deduction that allows corporations to reduce their taxable income for $526 million in savings.

Republicans were quick to blast the proposals, claiming that Pritzker is prioritizing people who are not U.S. citizens.

“The Governor just proposed raising taxes on every Illinois family struggling to make ends meet to fund the non-citizen welfare state he created,” Senate Minority Leader John Curran, a Republican from Downers Grove, said in a statement. “Our focus will remain on providing meaningful financial relief to the people of Illinois.”

Business groups, including the Chicagoland Chamber of Commerce, also raised questions about the taxes longterm.

“We are concerned about the lasting impact proposed revenue generators will have on small businesses still working to recover while facing existing regulatory and financial burdens,” the group said in a statement after the speech.

The governor’s proposed budget also includes $500 million for quantum computing technology, including for a cryogenics facility.

Pritzker called education the “central tenet” of all six of the budgets he has presented and proposed another $150 million for a statewide effort announced last year to have universal preschool in Illinois by 2027. Spending for K-12 education will also increase by about $450 million, including money for transportation and special education grants, a state literacy program and a teacher vacancy pilot program.

Pritzker also previewed a plan to address Illinois’ massive pension debt by boosting the funding target from 90% to 100% and extending the payment deadline to 2048. For consumers, he pitched permanently repealing a 1% sales tax on groceries, which was temporarily suspended for a year in 2022.