CHICAGO (CBS) — Gov. JB Pritzker spelled out Illinois’ fiscal mess but said the ultimate solution lies two years away in a graduated income tax.

CBS 2 political reporter Derrick Blakley has the story from Springfield on the governor’s budget address.

Pritzker’s budget calls for spending about $1 billion more than former Republican governor Bruce Rauner proposed spending last year. Nevertheless, Pritzker called it an austerity budget.

Gov. JB Pritzker laid out a $38 billion spending plan and the bleak realities of the state’s fiscal disaster.

“Illinois is faced with a $3.2 billion budget deficit and $15 billion debt from unpaid bills. Last year alone, the state paid out more than $700 million in late payment penalties,” Pritzker said.

Pritzker placed some of the blame squarely on his predecessor and his long-running budget battle.

“We lost four valuable years because of an ideological battle. That stops now,” Pritzker said.

To help fill the gap, Pritzker wants to legalize sports gambling, to bring in $200 million in fees as well as legalize recreational marijuana to raise another $170 million. But his big long term bet is on a graduated income tax, which couldn’t be implemented for another two years.

“We need fundamental tax reform. There’s no hiding from it. There’s no running from it. There’s no lying about it. I choose a fair tax system to get us out of this mess,” Pritzker said.

Still, pro-business groups are already fighting back. A digital ad from Ideas Illinois, a group formed to fight the progressive tax, echoed criticisms from Republican leaders.

“The graduated income tax that he presses, I think, works in other states to diminish economic opportunity. We just fundamentally disagree on how you create economic opportunity,” said Illinois Senate Minority Leader Bill Brady (R-Bloomington)

Gov. Pritzker also offered a long-term plan to address the state’s $134 billion in unfunded pension liabilities. But it relies, in part, on more borrowing and extending the full funding date. Republicans call that simply kicking the can down the road.

That graduated income tax which Gov. Pritzker is counting on must first be passed by the General Assembly with a constitutional amendment, then approved by Illinois voters.