Yesterday, Governor Pritzker outlined his 2022 $41.6 billion budget proposal in a virtual State of the State Address from the Illinois Fair Grounds. As expected, the Governor’s proposal was balanced and did not call for an increase to the State’s 4.95 percent flat-tax rate.
The Governor’s Plan calls for the State to continue the $700 million in department budget cuts from the last fiscal year. The Governor is also planning to prioritize any federal funding to support Illinois Departments of Public Health, Human Services, Veterans Affairs, and Employment Security. The Plan also calls for additional legislation to divert $60 million to ease some of the Department of Employment Security challenges, including expanding call centers.
To address the $3 billion budget hole, the Governor proposed $932 million in corporate tax increases:
- Reversing a phaseout of the State’s corporate franchise tax;
- Eliminating an additional tax credit for companies receiving other state incentives that create construction jobs;
- Lowering the deduction for taxpayers who donate to private school scholarship funds;
- Capping a discount for retailers that collect state sales tax;
- Ending a sales tax exemption for manufacturers;
- Capping the amount of operating losses business can deduct at $100,000 per year;
- Align Illinois tax treatment of foreign-source dividends, with the rate on domestic dividends;
- Rollback the corporate accelerated depreciation clause.
iBIO’s statement regarding the Governor’s Budget Proposal
“iBIO’s members are dedicated to creating new treatments, vaccines, diagnostics, and devices to fight the COVID pandemic. Our members are investing significant resources into R&D while also providing more than $80 million to support Illinois communities most impacted by the COVID pandemic. Illinois is facing unprecedented challenges, but the proposed increases to corporate taxes would negatively impact our member’s ability to improve patients’ lives. iBIO stands ready to work with the Governor’s Office and the General Assembly to address these challenges while supporting proposals to help Illinois Life Sciences companies continue to grow and innovate in the State.”
You can read the Governor’s Budget Proposal Here
