This week in Springfield, all eyes were on Governor J.B Pritzker as he presented his sixth annual budget address. Legislative action in committees and on the floor was minimal in both chambers due to the highly anticipated budget address. On Wednesday, Governor Pritzker spoke for nearly an hour as he unveiled his $52.7 billion budget. The Governor’s address focused on increasing spending in three “vital areas”: early childhood education, funding underserved public schools and the growing migrant crisis. Governor Pritzker also acknowledged the budget represents “some hard choices” and that is for those reasons he is calling for the nearly $300 million increase in the spending proposal. Last year’s budget called for $52.4 billion in spending.

After years of strong revenue performance and several credit upgrades, this year Illinois saw smaller revenue growth than years past and is the biggest reason why the Governor is proposing more than $800 million in tax increases on businesses to bring his spending plan into balance. To soften this blow, his plans also include extending a limit on the number of operating losses corporations can write off on their income taxes and to extend for three years a $100,000 cap that expires at the end of 2024.

In addition, Governor Pritzker also proposes raising taxes on individuals by reducing the standard exemption for state personal income taxes, which would raise an estimated $93 million by increasing tax bills for Illinois residents. On the flip side, he introduced plans to permanently eliminate the 1% groceries sales tax and create a state child tax credit for low- and moderate-income families. Governor Pritzker presented a long-term plan to manage the state’s massive pension debt.

Regarding housing, the Governor included plans for the newly created “Home Illinois” program, which was created to tackle the homelessness crisis, as well as, proposed an increase in the continued funding for affordable housing rental assistance.

One supplemental appropriation that was included in the budget that Illinois REALTORS® are extremely encouraged and excited about is the $350 million being allocated into a special fund at the Illinois Department of Commerce and Economic Opportunity to support big projects for this 2024 fiscal year. We are hoping that this special fund can be used to kick-start the development of the workforce housing that will be needed in the surrounding areas of the new electric vehicle manufacturing complexes. This allocation would allow for financial assistance in the process of building thousands of new single-family homes, a very much needed start in the effort to increase our state’s housing inventory, but specifically in the area of “starter homes”. We look forward to working with the Governor’s office to address the need for more housing. Illinois REALTORS® continues to work with Governor Pritzker on workforce housing and over the next several weeks we hope to have further discussions regarding improving the housing supply in Illinois.