Civic Federation President Laurence Msall called the state’s policy “an outdated and expensive exemption” that shifts the tax burden from wealthy retirees to working people. By taxing all retirement income that is subject to the federal income tax, Illinois could bring in $2.5 billion during the budget year that begins July 1, according to the report. Last week, the Pritzker administration projected a $3.2 billion budget deficit for the next fiscal year in a report that set the stage for a low-expectations budget plan next week.