(epic music) - I told you when I was elected, that I would be a relentless optimist for this wonderful place that we call home.

I didn't tell you that I would be an optimist only if times weren't hard.

I didn't tell you that I would be an optimist only if the challenges were easy.

I didn't tell you that there was a limit to the hope that I could find for this state, because there's not.

- Welcome to "Illinois Lawmakers" coverage of Governor J.B. Pritzker's State of The State.

And bunch of message here on "Illinois Lawmakers", Hannah Meisel, correspondent for Illinois Public Radio joins us.

Hannah, what are the main takeaways?

What are the main pillars of the speech that Governor Pritzker delivered this week?

- Well, it's definitely a speech that is crafted for an election year.

The governor is trying to tell, he's been up for several weeks now on TV with ads proclaiming that he has fixed the state's fiscal situation.

Now of course, fixed is a very subjective term.

And it's not accurate to say that he fixed it and Democrats fixed it on their own obviously.

We've had a lot of help from the federal government.

That's another narrative that the governor is trying to counter and say, even with, even without that federal COVID relief and stimulus funding, Illinois would still be on a better fiscal footing.

True to certain extent, sure.

But obviously not true.

But Republicans are trying to say that if it hadn't been for Biden bucks, we would not... We would be telling the same old story that we usually tell in Illinois, which is that, our fiscal house has been for years, for decades kind of in shambles.

- The reaction along the democratic party lines has been largely very positive toward this, that the state has well in, due to some extent, due to Biden bucks as you pointed out, and a resurging Illinois economy, that the state has finally turned the corner on a lot of its past grievous budgetary issues.

- Yeah, I mean, the budget impasse that went on from 2015 to 2017, really not all that long ago, in terms of our lives and observing the goings on in Springfield.

I think that to a certain extent, we all, even though we remember the budget impasse being bad, we still have some sort of collective amnesia about how truly bad it was.

But yeah, I mean, Democrats are going to, they're always gonna go back to, remember how bad things were under former Governor Bruce Rauner, when he and former House Speaker Mike Madigan had a protracted fight over, what labor should look like and what the larger contours of political power in Illinois.

- Hannah, thank you so much for your time on "Illinois Lawmakers".

We certainly appreciate your expertise and your insights into the budget making process.

Joining us now on "Illinois Lawmakers" Democratic House Speaker, Chris Welch.

Mr. Speaker, good to have you on the program.

I see you're working from home as we talk today because of the big winter storm that's hitting the state of Illinois.

Overall, the governor laid out a pretty ambitious plan for the new fiscal year coming up that starts on July 1st.

He's talking about a $1.7 billion budget surplus and offering up to a billion dollars in tax relief for Illinois residents.

So, as you look at this plan and you've been in on this for many years now, the legislature is ready to take up the plan, how close do you expect this to conform to what the governor has laid out?

- Well, first of all, Jak, thank you for having me.

Let me say this.

I've been in the legislature since 2013, and this is probably the best State of The State budget address that I've ever heard.

I think Governor Pritzker truly hit out the ballpark.

He talked about the things that we have done to get this state on the right financial path.

He talked about the things that are gonna help everyday people struggling in the midst of a global pandemic.

And he talked about the things that we're gonna continue to do to keep our state on the right path.

We don't need to turn the clock back to where we were when we were in the midst of budget impasses and jump bond status, and things of that nature.

We need to continue forward.

And he laid out a good path forward for the great state of Illinois.

- As you look at the way that he's got this structured, he's talking about a number of tax breaks for Illinoisans in terms of property tax rebates.

He's talking about cutting back on the proposed or scheduled gasoline tax later this year, and the like.

Are all these things doable in your view as you monitor the state's finances?

- Well, let me say this.

This is a budget address.

It's the beginning of a budget process.

I certainly think it's an excellent starting point to kick off our negotiations.

Now, I think the governor's address is only possible because of the great work that we've done on the budget the last couple of years.

He wouldn't be able to even propose these things if we were in the financial situation we were in under the prior administration.

We're in a good position and we're still in the midst of a global health pandemic, as we just learned with the recent surge in December and January.

And we have to continue to talk about how to put money back in people's pockets as a result of this global health pandemic.

And I certainly think what we heard is a excellent start to an important budget conversation.

- Are there any areas that as you look at what the governor's put out on the table here, he's talking about more money for state police, he's talking about more money for DCFS and Human Services, more money for higher education, are there any additional asks that you expect the house democratic caucus to put on the table?

- Well, let me say this.

I certainly think the governor did a really good job of pointing out the things that were gutted in the prior administration that we have been able to build back up and continue to build up here under his administration.

We've invested in public safety, we've done all the right things to move our state toward a safer Illinois.

And I certainly believe our caucus, which is a very diverse caucus, it reflects the state of Illinois will continue to probably have other things that they wanna inject into the conversation.

And that's why I say, this is an excellent starting point.

And I do think though it's a starting point that we're all happy to be starting from.

And I'm looking forward to where we end up.

I think we're gonna continue to keep Illinois on a positive path forward.

Probably still see additional credit upgrades as a result of the work that we're doing, but we're gonna do this.

- In the time we have remaining, the governor touched upon the crime issue.

And that's one that you have said many times over as we started this second year of your term as speaker, that the Illinois House is going to have to go back and do some working on that against the Democrats in the run up to the midterms.

What are Illinois Democrats going to put on the table?

- Well, first of all, we're gonna remind people across this state that the reason we're seeing an uptick in crime and recent studies have shown this from Northwestern University and the University of Illinois at Springfield, that the budget impasse from the Rauner years certainly led to a lot of the uptick in crime.

And some of the things that we've already done has helped is putting that infrastructure back in place, but there's more work to do.

And it's gonna be a two-prong approach, it's gonna be a comprehensive approach.

We have to continue to properly fund law enforcement, make sure they're trained and educated, but we also have to address the root causes of violence.

We have to deal with housing and security, we have to deal with homeless problem, we have to deal with mental health issues.

And those are things that we've been addressing in last year's budget.

We're gonna continue to build upon that in this year's budget.

It's a holistic approach that has to be taken and we're well on our way.

- Mr. Speaker, thank you so much for your time on "Illinois Lawmakers".

We always appreciate it.

- Jak, it's always a pleasure.

Thanks for having me.

- Joining us now on "Illinois Lawmakers", Senate Republic leader, Dan McConchie of Hawthorne Woods, working from the home office as a major winter storm hits the state.

He's in his district office in the Hawthorne Woods area.

Leader, thanks for joining us.

We certainly appreciate the time.

- Always good to be on with you, Jak.

- So, the governor restated promises made before that he's a relentless optimist out the state of Illinois.

He says we've turned a major corner in terms of repairing and reconstituting the state's finances.

He's looking at a $1.7 billion budget surplus and plans to grant somewhere around the frame of around $1 billion in tax relief to Illinois citizens.

What's your reaction to what the governor laid on the table?

- Well, I will agree that our picture, our financial picture is rosier than it has been in recent years.

But a great deal of that has to do with the COVID relief dollars that flowed to individuals, companies, local units of government.

Even though the governor's budget does not appear to be reliant upon direct federal assistance, it absolutely is helped out by the fact that all this money went into people's pockets.

They went out, they spent it, they bought and sold houses and so forth.

And that tax revenue then is coming back to help the state.

So, his insinuation during the speech that it has nothing to do with the federal government's assistance is simply not true.

Interestingly enough, a couple of years ago, the governor painted such a dire picture of the state's future financial condition, that if we didn't pass his graduated income tax, the sky was gonna fall.

And now he's trying to say that, no, we've got this great rosy picture and we did it on our own, and had nothing to do with the federal government is really laughable at the end of the day.

- So he's talking about roughly a billion dollars in tax relief in terms of eliminating the state tax on groceries, pausing the gasoline tax increase for later this year and offering property tax rebates to roughly two million Illinois residents.

Is there anything in this that gives you pause that he might not be able to pull this off?

- Well, the thing that your audience needs to understand is that all the tax cuts that he's talking about, they're all temporary.

They're all one year only benefits if you will, for individuals and people.

Here's what he didn't say.

And we cut through the numbers this morning to try to figure it out.

The increase in base spending that he's doing, from our base spending from before to now is $2.5 billion.

And this is gonna be permanent ongoing spending, a $2.5 billion increase while only providing $1 billion of temporary one year tax relief.

Here's the thing, we've been losing population over the last several years.

People have been voting with their feet and leaving for other states.

One of the big reasons we know is affordability, how difficult it is for people to afford to live here in this state.

And he's, property taxes for that, he's gonna offer one year of relief.

Not permanent ongoing relief.

One year of sales tax saving on your groceries, not permanent relief.

So that's something that I think people are gonna be very concerned about when they really kind of dig into it.

We're talking about massive permanent increase in government, but only some temporary relief that after the...

It's an election year gimmick.

And after that, taxes are gonna go back up under his proposal.

- So what would Senate Republicans put on the table as an alternative package?

- So, we've put a proposal on the package, on the table, I should say.

And what we did was we made permanent tax relief, property tax relief in an ongoing basis.

We not only cut out the tax on groceries, but we expanded it to medicine and medical devices.

We made that permanent.

We've also talked about restore...

Giving people the ability to be able to go to referendum, to actually cut their own property taxes.

If they believe their local unit of government is behaving in an inappropriate manner, for anybody who's across the state, they could go to referendum to do that.

In any sort of tax cap counties right now that power doesn't exist.

We actually found a way to reduce the price of a gallon of gas, but also increase the money going into the road fund.

And that's by addressing the sales tax that's currently on there that doesn't go to the road fund currently, just goes into the general revenue fund.

The governor's actually talking about cutting money that goes to roads.

We wanna be able to save people money at the gas pump and help continue to fix our roads, which as we all know need that help.

- Senate Republican leader, Dan McConchie, thank you so much for your time on "Illinois Lawmakers".

We appreciate you taking the time out of your busy schedules.

- Absolutely, good to be on with you.

- Up next on, on "Illinois Lawmakers", Senate democratic president, Don Harmon of Oak Park.

Senator, good to have you with us on the show.

This is an unusual speech in a lot of ways because we've come through COVID or going through COVID.

We have a major winter storm in the state, but the governor is painting a sunnier outcome for the state's fiscal situation after many years.

I think it's fair to say that this is not something that you're used to when it comes to watching a budget address.

- I am not accustomed to good news in a budget speech.

That's for sure.

But the governor's laid out a framework for another responsible, balanced budget, probably the most responsible in my 20 years in Springfield.

One that redoubles our efforts to put our fiscal house in order, to pay our bills, to pay down pension debts, to invest in our infrastructure.

And I'm very encouraged by what I heard today.

- A couple of key takeaways, of course, upwards of a billion dollars in tax relief for Illinoisans, pausing the gasoline tax increase later this year, property tax rebates.

That's always an issue, property tax rates, of course in the state have always been high.

And you're looking at a 1.7 billion surplus.

Is this gonna pan out once the federal money goes away from COVID relief?

- Well, I gotta tell you, the operating budget really is built exclusive of that federal support.

This is a budget based on our revenue from the state income tax and state sales tax predominantly.

I hope that it is sustainable, but I'm glad we're taking a very cautious, conservative approach.

And we're putting that money away in the rainy day fund.

As you mentioned, we're advanced funding the pensions, we're paying off other debts and paying down unpaid bills to really lock in the financial stability of the state.

A billion dollars in taxpayer relief is a big component of it.

And I'm glad the governor found a way for us to share that with the people who contribute to the treasury.

And I'm really cautiously optimistic that this is, puts us on a financially sound footing for years to come.

- One of the key criticisms of the package that the governor rolled out in his speech from the Republican side of the aisle is that these are one-time tax relief measures.

Is there any way that any of this could be sustainable beyond this fiscal year given what we know about the Illinois economy?

- Well, let's take it one budget at a time.

We're making real meaningful investments in paying off our debts and paying down obligations.

That puts us in a position in the long term for more tax relief.

Again, I'm glad the governor found a way to provide a billon dollars in proposed tax relief to hardworking Illinois families.

Would love to be able to repeat that year after year, but let's make sure we've got that financial footing in place so that we can make those sorts of commitments and make 'em stick.

- Well, you obviously saw all of the key components of this speech and trying to shore up more money for the state police recruiting class, more money for DCFS, more money for higher education, more money for elementary and secondary.

It's a long list of asks.

Is there anything that you expect to come out of the Senate democratic caucus to perhaps adjust this?

Are there other areas that you think might be on the table that your caucus is going to want?

- I'm sure that our caucus will weigh in with all sorts of thoughts, but the principles the governor outlined are sound.

We are always committed to funding public education and continuing our commitment to fund kindergarten through high school education through the evidence-based funding model.

The governor included the pledge, 350 million increase.

We've also increased funding for higher education by 5%.

Again, this continues to reverse a trend two decades in the making, and invests in some of our most important institutions.

And perhaps most importantly, that meaningful increase in investment for early childhood education, always a priority for Senate Democrats, probably the smartest money we could spend dollar for dollar based on predicted returns.

So I think the governor will find a lot of common ground with Senate Democrats on those key areas.

- Senate president Don Harmon, thank you so much for taking the time out of your busy schedule to be with us on "Illinois Lawmakers".

We certainly appreciate it, sir.

- Delighted to be with you.

- Joining us now on "Illinois Lawmakers" house Republican leader, Jim Durkin of Western Springs.

He's enduring the snowpocalypse at his office in Springfield.

Good to have you with us leader.

- Thanks Jak, glad to be here.

- The governor outlined a fairly rosy budget picture for the state of Illinois, for the coming fiscal year that starts on July 1st.

He's talking about a 1.7 billion surplus overall in the budget.

He's also targeting about a billion dollars in tax relief for Illinois residents.

Is any of this gonna stack up as far as house Republicans' viewpoint?

- Okay, we're always fair with the governor.

If he wants to invite us in on any issue, we're glad to work with him.

But the Republicans have been shut out the last few years on everything, on budget, on any type of major legislation in the general assembly.

So, let me just say this, there is a credibility gap with the governor and also I would say most voters in Illinois, and clearly members of the House of Representatives on the Republican side.

It was just two years ago he said that if we did not pass this constitutional amendment, the state finances would fall into the abyss, where his Lieutenant governor said that if we did not pass this constitutional amendment, we would have to raise income taxes by 20%.

None of that ever happened.

So the governor's painting a picture right now that looks great, looks great on paper, but he needs to be upfront about why we're in this position.

It has nothing to do with what the Democrats and he have accomplished in the House of Representatives with any one particular type of legislative initiative.

He is the beneficiary of the federal government, billion, multi-billion dollar bailout like every other state, but he is also the beneficiary of increased taxes that are being imposed on Illinois families because of this high inflation that is going on.

Those are the two reasons why we have this.

He can talk about the great financial predicament of the state of Illinois, which is short term, which is just short term.

So, he likes to talk about transparency and also being honest with people.

He needs to be honest with people that this is about somebody else's doings, which made Illinois put him in a better fiscal position.

- As you say, it's difficult for house Republicans to have a place at the table in these negotiations that will take place in coming weeks.

But putting the onus back on the house Republicans, what would you do differently than what the governor has outlined?

- I didn't hear anything about any structural reforms, Jak, and that's important.

He's talking about how he is giving homeowners a break by giving a $300 check through the income tax and income tax credit to take the burden off of taxpayers.

That's not gonna get anywhere.

It's not gonna improve the quality of life in the middle class, nor are these, that's a gimmick.

The other gimmick is what he's doing with the gas tax and also on the groceries.

So if he wants to talk about long term structural reforms in state government, instead of continuing the spending that he's on, we're glad to do it.

Governor Pritzker is a tax and spender, and he will continue on with this, but he fails to talk about that this money that we are, we're reliant on, which is the federal bailout money comes to a close in about a year and a half.

And so, you can't look at the budget for a four-month period.

You gotta look at it sustained over many years.

So we're gonna continue on with the spending that the governor does, but in two years, we're gonna be back where we were back when he started.

We're gonna have massive deficits.

We're gonna have to deal with the spending, which is gonna be again, it's gonna go above and beyond what the revenues that we will be bringing in.

So nothing's gonna change, but look, it sounds great for his reelection.

That's what it was today.

It was bitterly partisan, but this was his great election speech about how he's been able to turn around Illinois finances, but he forgot to mention how we got there.

The federal government, and also the squeeze and the middle class through the rising cost of inflation on goods and services.

- House Republican leader, Jim Durkin of Western Springs, thank you so much for your time on "Illinois Lawmakers".

We certainly appreciate it, sir.

- Thank you, Jak.

- Back with us on "Illinois Lawmakers" Illinois Public Radio correspondent, Hannah Meisel.

As you look toward the rest of this spring session, a shortened spring session wrapping up ostensibly on April 8th, do you think the governor's budget outline is going to survive pretty much intact with the democratic super majorities in power at the capital?

- Yeah, I mean, I would say that the broad things that the governor wants to do, they might stay pretty much the same, or only see a little bit of a change.

Things like the governor wants to acknowledge that regular families, even though Illinois budget is doing better writ large, a lot of families are still feeling the squeeze of higher inflation and just....

In general, pretty bad economy that has hit a lot of low income folks, a lot harder than others in the last two years.

And so what he's offering is a one-year, temporary pause of the planned increase in the gas tax, which was tied to inflation a few years ago, and a one-year suspension of tax on groceries and also up to $300 rebates on property taxes that would be for about two million Illinoisans.

Those are things that Democrats would definitely wanna get on board with.

And frankly, some Republicans in reaction that we've heard so far, they like these things.

And so it's kind of a, I dare you move from the governor.

So we'll see how things play out, but on the gas tax, for example, we have a major powerful union that is not so on board with that.

So I don't think that the governor is gonna get everything that he wants, but I also don't think he expected to get everything.

- Hannah Meisel, thank you so much for joining us on "Illinois Lawmakers".

That's it for this special edition of "Illinois Lawmakers".

Thank you for joining us.

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