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home : news : state news free April 3, 2020

2/21/2020 10:58:00 AM
Governor's plan linked to passage of amendment
Pritzker stumps for higher education budget at UIC; Proposed increases also linked to passage of constitutional amendment

Capitol News Illinois

SPRINGFIELD — One day after delivering his budget proposal to the General Assembly in Springfield, Democratic Gov. JB Pritzker was in Chicago on Thursday rounding up support for his proposed increases in higher education funding.

Speaking at the University of Illinois at Chicago, Pritzker highlighted his proposal of a 5 percent increase in general operating funds for the state’s colleges and universities along with a $27 million infusion into the financially-troubled College Illinois pre-paid tuition program; a $50 million increase in funding for the Monetary Award Program, or MAP, grants for lower-income students; and $2.5 million to defray the Advanced Placement testing fees for lower-income high school students.

“It puts college students front and center, and it builds on the historic investments and improvements that we’ve made to strengthen our higher education system,” Pritzker said.

But his speech wasn’t just about rounding up support for his budget plan. It was also a pitch for support of a constitutional amendment to overhaul the state’s income tax system, because without that, most of those funding increases are unlikely to happen.

“Some of this funding must be held in reserve until we know the fate of the constitutional amendment that would change our tax structure to treat working families more fairly,” Pritzker said..

The proposed state constitutional amendment, on which voters will decide in the November general election, would do away with the current “flat” tax rate of 4.95 percent and give lawmakers authority to adopt what’s called a graduated tax structure that levies higher tax rates on higher levels of income.

Lawmakers have already passed a bill, which Pritzker signed last year, setting out what those rates would be starting Jan. 1, 2021, if the amendment is approved. Most tax filers would pay the same or slightly lower rates while upper income filers — individuals with incomes over $250,000 a year — would pay higher rates.

State revenue officials estimate that the tax would generate about $3.6 billion a year in new revenue, including about $1.4 billion for the final six months of the next fiscal year, January through June 2021.

Pritzker said the proposed increase in operating funds would help hold down tuition rates while the increase in funding for MAP grants and the College Illinois program would help make college more affordable for working families.

Speaking at UIC on Thursday, Pritzker made a special pitch for College Illinois, a program launched in 1993 that allowed families to sign contracts and prepay tuition for their children and grandchildren. It was predicated on the idea that their money would be invested and earnings on their investments would outpace future tuition increases.

“Unfortunately, the program’s advocates didn’t forecast that tuition increases would outstrip market returns, and two decades later we find ourselves in a place where the program and its promises will be insolvent in the next six years,” Pritzker said.

College Illinois stopped signing new contracts in 2017. According to the most recent financial report, the program has an unfunded liability of $317 million.

Republican lawmakers, who oppose that graduated tax plan, also have been harshly critical of that strategy, arguing Pritzker should have submitted a budget based on current law, not on “hypothetical” revenues that voters haven’t yet approved.

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