One of the bigger state budget expansion fights we could see play
out in Springfield this spring is the creation of a permanent $300 Child Income
Tax Credit.
The new proposal has been scaled back from last year’s $700 per
child tax credit bill, which went nowhere in the House after it was introduced
in February and ultimately had 15 sponsors and cosponsors. But proponents say
even the downsized version would make a major difference.
The problem, of course, is the cost, pegged at about $300 million
per year. As I’ve told you before, number crunchers with the Governor’s Office
of Management and Budget are saying that Illinois could face a budget deficit
of $891 million next fiscal year, which begins July 1. That deficit could rise
to $1.4 billion in Fiscal Year 2026 and $1.66 billion in FY27.
But this issue has real potential to take off in the General
Assembly.
“We have the data that shows roughly 60% of the recipients of this
benefit across the state would be Black and Brown households,” said Rep. Mary
Beth Canty, D-Arlington Heights, recently on WTTW’s “Chicago Tonight” program.
“We're talking about being able to make a difference in the lives of about 1,500,000
children across Illinois. That is a game changer for families.”
The idea is framed as a partial replacement for the now-expired
but massive 2021 expansion of the federal Child Tax Credit. “Monthly checks of
up to $3,600 offered parents reliable resources to pay for basic goods, like
formula, diapers and school supplies, and basic necessities like shelter,
utilities and food,” wrote Natalie Foster in a recent Crain’s Chicago
Business op-ed. “The expanded federal CTC slashed child poverty in half,
decreased food insecurity and improved educational outcomes.”
“This is something that has to be dealt with at the federal
level,” Rep. Canty admitted last week. Efforts are indeed being made in
Washington, D.C., to revive a scaled-down version of the federal tax credit
program. A bipartisan agreement has been announced, but D.C. being D.C., nobody
can be certain that it can actually pass.
So the states, Canty said, “have a real opportunity to make a
difference. There are 14 other states that are running programs like this.”
Asked how she would pay for the new tax credit program, Canty
said, “Where there is a will there's a way,” which is not exactly an answer. “We
always talk about a budget being a moral document,” Canty said, “So when you
talk about your policies, those are the things that you want people to know,
but what we fund is where your morals really are. Those are your real values.”
All true, of course, but, unless he goes along with it, this could
be one of the most interesting challenges to the governor’s effort to tamp down
attempts to add permanent costs to the budget in the face of possible future
deficits.
Keep in mind that more than half of all current House Democrats
never served under then-Gov. Bruce Rauner’s budget disasters, and the budget
crunch during the pandemic’s early stage was beyond anyone’s control and was
dealt with in just a few session days, so the newbies really have no idea what
it’s like to try and manage a possible deficit year.
Meanwhile, Capitol News Illinois reported in December on the
Commission on Equitable Public University Funding, which is “tasked with
developing a new model for funding higher education.”
The news service reported that “some draft meeting materials
presented at the board’s November meeting suggest it would require as much as
an overall $14,000 per-student increase in state appropriations to fully fund
higher education. With 130,000 undergraduates and 56,000 graduate students
enrolled at state universities this year, these numbers suggest the needed
funding increase could reach into the billions.”
Not included in the article was the arithmetic, which would total
$2.6 billion in spending. That’s per year, by the way.
There’s just no possible way the state can pay for that. But it
could be in the realm of possibility for another spending “ramp,” something
along the line of what the state did with pension funding and with gradually
bringing all K-12 schools up to adequate funding levels.
Anyway, just add that potential cost to the pile.