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Saturday, November 2, 2024

Illinois House votes to put Pritzker’s progressive income tax amendment on 2020 ballot

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In keeping with tradition, Illinois state lawmakers voted to advance a substantial tax hike on a day most Illinoisans had their attention turned elsewhere.

On May 27, Memorial Day, the Illinois House of Representatives voted 73-44 to pass Senate Joint Resolution Constitutional Amendment 1, which would scrap the state’s constitutional flat tax protection and allow for a graduated, or “progressive,” state income tax system. All Republicans voted “no” and all Democrats voted “yes” with the exception of state Rep. Andre Thapedi, D-Chicago, who was not present.

Lawmakers have not yet passed a bill containing new income tax rates should voters approve the amendment. Nor have they passed constitutional amendments on popular items such as term limits, redistricting reform or pension reform.

The progressive income tax proposal will appear on Illinoisans’ November 2020 ballots, where it would become law with either the approval of 60% of voters who pick a side on the ballot question itself or more than 50% of those casting a ballot overall.

State Reps. Jonathan Carroll, D-Northbrook, and Sam Yingling, D-Grayslake, demonstrated political courage by originally standing opposed to Pritzker’s progressive tax hike, citing the need first for guaranteed property tax relief.

But both Yingling and Carroll broke their promises to taxpayers in their districts by voting “yes” on SJRCA 1 – without any guarantees regarding property taxes.

While state Rep. Michael Zalewski, D-Riverside, announced plans to form a “task force” to study the issue, this is a far cry from delivering on the promise of guaranteed relief. Without pension reform, property tax bills will continue to rise under Pritzker’s plan.

State lawmakers last convened on a holiday to hike taxes in 2017, when the Illinois General Assembly voted the week of Independence Day to pass a 32% income tax hike. As with Pritzker’s “fair tax” proposal, state leaders sold the 2017 tax hike, and the 2011 hike before it, as ways out of Illinois’ fiscal crises.

Unfortunately, it isn’t just the attention of voters that Illinois lawmakers sought to limit in service of Pritzker’s tax plan – but their participation in the democratic process as well. The Illinois House Revenue & Finance Committee denied Illinois voters the option to file witness slips on Senate Bill 687, which would set graduated tax rates should SJRCA 1 become law.

The reason for skirting basic transparency? Discomfort with facing voters’ opposition to Pritzker’s agenda is one likely reason: A tally of witness slips filed on SJRCA 1 shows nearly 10,000 opponents to Pritzker’s progressive tax amendment and a mere 4,000 proponents. Voters’ disfavor with Pritzker’s tax plan is reaffirmed by polling in a number of House districts currently held by Democrats.

This may also explain why many of the Democratic lawmakers representing those districts refused to state to their voters where they stood on the tax plan until casting their vote.

Illinoisans are justified in rejecting Pritzker’s progressive tax plan. Just one state in the last 30 years has switched to a progressive income tax: Connecticut. Since doing so, ithas suffered soaring poverty, middle-class tax increases, severe jobs losses, a stunted economy and continuously unbalanced budgets. Illinois lawmakers should especially note the Nutmeg State’s continued growth in property taxes, atop its income tax hikes.

In November 2018, by contrast, Colorado voters rejected a state constitutional amendment that would have replaced its flat income tax with a progressive tax. Both North Carolina and Kentucky have ditched their progressive tax structures for a flat income tax in recent years.

Connecticut’s progressive tax pain is reflected in Illinois Policy Institute research, which found the average Illinoisan would need to endure a $3,500 income tax hike in order to fund Pritzker’s spending plans under a progressive tax system. And while Pritzker’s fast diminishing promise of middle-class tax relief for the middle class, the governor’s 18 additional proposed tax and fee hikes would quickly wipe out any theoretical income tax relief.

Illinois cannot deliver lasting tax relief without addressing the root cause of state and local tax hikes: massive, unfunded pension and health insurance liabilities for government workers. Without reining in those costs, for which the Illinois Policy Institute this year offered a solution, a progressive income tax system would simply pave the way for middle-class income tax hikes.

For this reason, state leaders should not be surprised if Illinoisans reject Pritzker’s progressive tax hike in 2020.

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