On April 19, Governor JB Pritzker signed the FY 2023 Illinois state budget into law, including $1.8 billion in tax relief.  Highlights include rebate checks for working families, grocery tax suspension, property tax rebates, gas tax freeze, and more.  The budget consists of projected revenues of $46.329 billion and expenditures of $45.986 billion, leaving a $444 million surplus.  The budget also appropriates Illinois’s remaining American Rescue Plan Act (ARPA) federal funding, totaling $4 billion.

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Highlights from the Illinois FY 2023 budget include:

Tax Relief

The $1.8 billion in tax relief includes:

• $400 million – suspending tax on groceries for one year;
• $70 million – freezing motor fuel tax for six months;
• $520 million – one-time property tax rebate (Five percent of property taxes paid, up to $300 per household);
• $100 million – permanently expanding the earned income tax credit;
• $685 million – direct rebate checks ($50 per person and $100 per dependent, up to three children per family); and
• $50 million – “Back to School” sales tax holiday on clothing and school supplies for a week in August and doubles the tax credit for teachers who buy classroom supplies.

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Public Safety & Violence Prevention

• Approximately $1 billion for violence prevention, youth employment, and diversion program appropriations to deliver a multi-year investment in these programs far exceeds previous levels.  Includes appropriations for Reimagine Public Safety and R3 grants; 
• 300 new State Police troopers, the single most significant dollar investment in state history to expand cadet classes; 
• $50 million increase directly from cannabis revenues to support communities harmed by violence, excessive incarceration, and economic disinvestment;
• $240 million for the Reimagine Public Safety Act ($235 million ARPA, $5 million GRF);
• $30 million to support the Violent Crime Witness Protection Program;
• $20 million for grants to non-profits for security investments to prepare for hate crimes;
• $30 million for Local Law Enforcement Body Camera grants;
• $20 million for less-lethal device grants and associated training expenses;
• $10 million for the Co-Responder pilot program;
• $10 million for a local law enforcement retention grant program;
• $8 million for a multi-year equipment replacement program at the Illinois State Police that includes radios, body and car cameras, and cloud storage;
• $5.4 million for more staffing and new equipment at a new forensic lab in Decatur, after expanding state forensic capacity in Chicago and Joliet; and 
• $20 million for cameras and automatic license plate readers on state roads.

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Education

• $350.2 million increase for Evidence-Based Funding (EBF) for K-12 schools, to a total of $7.9 billion in EBF appropriations;
• $96 million increase for transportation and special education district reimbursements ;
• $54.4 million increase for Early Childhood Education;
• $300 million to Strengthen and Grow Childcare Grants;
• $601.5 million in support of need-based Monetary Award Program (MAP) funding, a one year $122 million increase, plus an expansion of the maximum award to 50% of tuition at public universities and coverage for an additional 24,000 students;
• A 5% operating budget increase for Public Universities and Community Colleges in FY 2022 through supplemental appropriations and a continuation of the 5% increase in FY 2023;
• $230 million to retire the unfunded liability for College Illinois! in P.A. 102-696, saving taxpayers $75 million in unnecessary costs over the remaining life of the prepaid tuition program; and
• Funding increase for minority teacher scholarships. 

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Healthcare

• $240 million in hospital tax relief through additional support to the Hospital Provider Fund;
• Hundreds of millions in grant funding for safety-net hospitals and other hospitals in the State from the General Revenue Fund and federal COVID-19 funding;
• Fully funds nursing home rate reform and a redesigned provider assessment to maximize federal dollars, encourage staffing and improve quality, with more than $700 million, all funds;
• Waives licensing fees for about 470,000 frontline healthcare workers; 
• $180 million to preserve and expand the healthcare workforce, through Medicaid providers, concentrating on underserved and rural areas;
• Establishes the $25 million Pipeline for the Advancement of the Healthcare (PATH) Workforce grant program through the Illinois Community College Board; and
• $7.8 million increase for Nurse Scholarships and Grants in Illinois Higher Education institutions.

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American Rescue Plan Act Funding

The budget also appropriates $4 billion in federal ARAP funding that the State has remaining, including $2.7 billion for the Unemployment Insurance Trust Fund.  The remaining $1.37 billion will go towards:

• $320 million in state COVID-19 response operational appropriations for the Illinois Emergency Management Agency ($200 million), Department of Corrections ($50 million), Department of Human Services ($50 million), and Department of Public Health ($20 million);
• $380 million in pandemic support healthcare provider payments, including;
  • $225 million for Nursing Homes
  • $67 million for Hospitals
  • $30 million for Ambulances
  • $58.7 million for safety-net hospitals
• $235 million (plus $5 million GRF) to support violence prevention grants;
• $150 million for affordable housing programs;
• $83.4 million for violence prevention and interruption grants at Criminal Justice Information Authority (CJIA);
• Support for those impacted by the Pandemic through DCEO:
  • $75 million for a hotel jobs recovery program
  • $50 million for restaurant employment and stabilization grant program
  • $50 million for arts-related grants such as live venue operators, performing or presenting arts organizations, arts education organizations, and museums or cultural heritage
  • $15 million for tourism attraction development grants

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