In Illinois, Republican legislators are proposing a $200 stimulus check for individuals and a $400 one for joint filers. They say they want to alleviate the pressures citizens are facing due to rising inflation.
Illinois recently ranked as the least tax-friendly state in the nation for middle-class families, according to a Kiplinger report. So now Illinois Republicans want to provide some relief in the form of tax credits.
“[While] we may not be able to address at the state level the root causes of inflation, we can and we think it is our responsibility to provide relief,” state Rep. Avery Bourne (R-Morrisonville) told the Center Square. “And that’s why today we’re proposing inflation tax relief for Illinois families.”
But their proposal has brought predictable splits along party lines. Democratic Gov. J.B. Pritzker slammed the effort and linked it to national fights playing out in Washington.
Stimulus Check Proposal Greeted with Partisan Rancor
Under the Republicans’ proposal, single tax filers earning below $75,000 a year would get $200 checks back. Joint filers earning up to $150,000 would get $400 back. Head of household filers earning up to $112,500 would get $200 back.
“Four hundred dollars won’t make all the problems go away. But it could have a positive impact,” state Rep. Tom Demmer (R-Dixon) said. “It could be an extra week or two of groceries, it could be an extra few utility bills. It could be the difference between being able to buy new shoes or winter coats for your kids.”
Demmer wants to pay for the $1.4 billion plan by reprioritizing state spending which will be offset by some of the $8 billion in federal COVID-19 relief funds.
However, Gov. Pritzker’s office sharply criticized the proposal, complaining that Republicans had opposed Pritzker’s effort to change the state’s income tax from a flat tax to a progressive tax. In many states, Illinois included, officials were left scrambling to fill budget shortfalls brought on by pandemic-related revenue declines. So the defeat of Pritzker’s tax proposal meant painful budget cuts for the governor.
Pritzker also noted that Illinois Republicans’ colleagues in Washington had declined to support President Biden’s legislative agenda.
“While Republicans now try and weigh in 18 months too late, this administration is hard at work putting billions of dollars of rental and mortgage assistance, small business grants, and utility assistance into the hands of working families,” Pritzker’s office said in a statement.
Can States Use American Rescue Plan Act Relief Funds to Offset New Tax Cuts?
Congress included in the American Rescue Plan Act a provision that barred states from using pandemic relief funds to offset stimulus in the form of tax cuts. But earlier this month, U.S. District Judge L. Scott Coogler ruled that Congress had overstepped the limits of its authority there, the Associated Press reports.
The judge said the tax-cut restrictions were “a federal invasion of State sovereignty” that was “unconstitutionally ambiguous.” And he saw it as an attempt to force states to adopt the Democratic Congress’s preferred tax priorities.
Thirteen states had sued to stop the Treasury Department from enforcing the provision. Joining the lawsuit were Alabama, Arkansas, Alaska, Florida, Iowa, Kansas, Montana, New Hampshire, Oklahoma, South Carolina, South Dakota, Utah and West Virginia.
Justice Department lawyers had insisted that the American Rescue Plan Act funds should only go to pandemic recovery. In their view, giving tax cuts to citizens reeling from the inflation that followed the pandemic should not count as pandemic recovery.
