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Budget Update

REVENUE | SENATE BILL 9

Senate Bill 9 is the accompanying revenue package. It includes an increase to the individual and corporate tax rate, changes to corporate tax law and an extension to several tax credits.


Income Tax Rates

Beginning July 1, 2017, the individual income tax (IIT) rate increases to 4.95% and the corporate income tax rate (CIT) increases to 7%. Distributions to the Local Government Distributive Fund (LGDF) are adjusted so local governments receive the same amount of income taxes they do currently.

Fiscal Impact:  $4.967 billion


Means-Testing for Certain Income Tax Credits

The Education Expense Credit, Property Tax Credit, and Standard Exemption would no longer be available to high-income earners (individuals earning more than $250,000 per year, or joint filers earning more than $500,000 per year).

Fiscal Impact: $96 million.

Earned Income Tax Credit (EITC)

Under current statute, each individual taxpayer receives a state EITC in the amount of 10% of the federal earned income tax credit. This amendment would increase the credit to 14% of the federal amount in 2017 and 18% of the federal amount in 2018 and thereafter. 

Fiscal Impact: ($94 million).


Classroom Supplies Credit

The bill creates a new income tax credit (for up to $250) for teachers who spend their personal income on classroom supplies.

Fiscal Impact: ($20 million).


Education Expense Credit

The bill increases the maximum amount for the Education Expense Credit to $750 (currently $500) for tax years ending on or after December 31, 2017.

Fiscal Impact: ($15 million).


Research & Development (R&D) Credit

The R & D credit, which expired December 31, 2015, is restored through 2022.

Fiscal Impact: ($70 million).


Manufacturing, Machinery, and Equipment Exemption

The MM&E exemption is expanded to include machinery used to produce graphic arts and production-related tangible property.)

 

 APPROPRIATION (SPENDING) | SENATE BILL 6

Appropriates $4.17 billion for various capital projects, with $598 million of new capital projects and $3.57 billion of reappropriated capital projects.  The following tables break down the appropriations within 3 categories: 1) new appropriations, 2) reappropriations from the Stop-Gap budget, and 3) projects previously appropriated but did not receive an appropriation over the last 2 fiscal years.


New Appropriations

Provides for $598 million of new capital appropriations.  The table below breaks down the new appropriations by purpose and amount. 

Category

Amount

Purpose

Technology Improvements

$400 million

Implement the Governor’s information technology upgrades at state facilities

Correctional Facilities

$175 million

Implementation of the Rasho v. Walker settlement regarding mental health treatment facilities for state inmates

State Facilities

$23 million

Close out previously completed projects for which the state still owes payment and remobilization costs for projects stopped due to the lack of an appropriation

Total

$598 million



Reappropriations from Stop-Gap Budget

Provides $3.13 billion of reappropriated capital projects from the Stop-Gap budget.  All these projects were first appropriated in the FY 09 capital bill and annually reappropriated through FY 15.  With the exception of the water resource projects and school maintenance grants, these projects were not given an appropriation in FY 15, but were included in the Stop-Gap budget. 

Category

Amount

Purpose

Water Resource Projects

$2.4 billion

Grants to locals for wastewater and drinking water infrastructure projects

State Facilities

$346 million

Capital improvements to various state facilities

School Construction

$277 million

School construction/school maintenance grants

 

 

 

 

Category

Amount

Purpose

Natural Resources

$98 million

Various conservation purposes

Civic Center Construction Grants

$11 million

Grants to public civic centers for infrastructure improvements

Total

$3.13 billion


Previously Appropriated Projects

Provides $441 million of projects that have previously been appropriated, but not since FY 15.  The table below breaks down these projects by purpose and amount.

Category

Amount

Purpose

Private Organization

$15 million

Grants for construction of community health centers

Public Library Grants

$10 million

Grants to public libraries

Water Resource Projects

$21 million

Grants to locals for wastewater and drinking water infrastructure projects

Correctional Facilities

$104 million

Implementation of the Rasho vs. Walker settlement litigation regarding mental health treatment facilities at state prisons

Natural Resources

$140 million

Various conservation purposes

School construction grant

$500,000

School construction grant to CICS Rockford Charter Patriots Center

Community Colleges

$125 million

Capital grants to several community colleges

Private Organization

$3 million

Capital grant to Crossing Healthcare in Decatur

Private Organization

$2 million

Capital grant to Lawndale Christian Health Center in Chicago

State Facilities

$162,000

Infrastructure improvements at Rockford Regional Office Building

Mass Transit

$15 million

Grant to METRA for construction of a new station at Peterson Avenue and Ravenswood Avenue.

Eastern Illinois University

$5 million

Capital improvements at EIU - HVAC in Life Science Building & Coleman Hall, upgrade electrical distribution system, and renovate Fine Arts Center

Total

$441million


The Committee to Protect Illinois Families, Martin Walter, Treasurer
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