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Illinois Governor Suspends New Film Tax Credits, Makes Other Spending Cuts

2 min readBy: Joseph Bishop-Henchman

Illinois Governor Bruce Rauner (R) yesterday announced a series of program suspensions, including new targeted taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. incentives to businesses, including new film tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. commitments to film and television studios.

After defeating incumbent Governor Pat Quinn (D) last November, Rauner in February proposed a balanced $31.5 billion budget with no tax increases. Last week, the Democratic majority in the Legislature instead passed a budget totaling $36.3 billion, about $3 billion more than available revenue. The Legislature has also rejected or refused to consider Rauner’s recommended structural reforms in workers’ compensation, civil lawsuit damage awards, municipal collective bargaining, public works contracting, and local property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es. For his part, Rauner has said he will not consider tax increases until some of those structural areas are addressed.

With the two sides at a stalemate, Rauner announced that he is issuing administrative orders to cut $400 million in spending wherever he can. Including:

  • Immediate suspension of all future incentive offers to companies for business attraction and retention, including EDGE credits and the film tax credit program. Commitments already made will be honored.
  • Suspend state low income heating assistance as of July 1. This state program supplements federal heating assistance and has already run out of money.
  • Suspend construction of the Iliana Expressway between Chicago’s southern suburbs and northern Indiana. The toll road has pit suburban Democrats against environmentalists, and is unlikely to generate traffic to pay for itself.
  • Ground all state-owned passenger planes, usually used to shuttle legislative leadership to and from Springfield.
  • Close one or two juvenile correctional facilities and one work camp facility.
  • AuditA tax audit is when the Internal Revenue Service (IRS) conducts a formal investigation of financial information to verify an individual or corporation has accurately reported and paid their taxes. Selection can be at random, or due to unusual deductions or income reported on a tax return. healthcare and family service providers for overbilling and overpayments to recover
  • Freeze all state police vehicle purchases.
  • Impose means-testing and need-determination on the elderly community care program.
  • Increase co-pays, freeze intake, and pursue other cost controls for state provided child care services.
  • Cancel 2016 Department of Natural Resources land acquisition grants.
  • Suspend operations at the Illinois State Museums in Springfield, Chicago, Dickson Mounds, Lockport, and Rend Lake.

Suffice it to say that no Illinois officials or legislators are making any non-refundable summer vacation plans.

For more about Illinois, check out our new chart book, Illinois Illustrated: A Visual Guide to Taxes & the Economy.