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A Pritzker “Fair Tax” failure would be catastrophic for the rookie governor

Monday, Apr 8, 2019 - Posted by Rich Miller

* My weekly syndicated newspaper column

Freshman Rep. Terra Costa Howard (D-Glen Ellyn) was reportedly none too pleased when Think Big Illinois began running TV ads in her district.

Think Big Illinois is the dark money group created to support Gov. J.B. Pritzker’s progressive income tax proposal. It started running ads in late March in four individual House districts a couple of days after an opposing dark money group called Ideas Illinois targeted the same Democratic House members: Costa Howard, Monica Bristow, Jonathan Carroll and Mary Edly-Allen.

One of the Ideas Illinois ads ended by telling viewers: “Tell Terra Costa Howard to vote ‘No’ on the jobs tax.” A pro-Pritzker Think Big Illinois ad told viewers: “Tell Terra Costa Howard to vote ‘Yes’ and put the middle class first.”

None of the four Democrats were given a heads-up about the pro-tax ads. And word got around that Rep. Costa Howard wasn’t happy, so a Think Big staffer reached out to her. I’m told she didn’t specifically demand that the ad be taken down, but the group pulled the spot off of cable TV almost right away.

Costa Howard scored a huge victory when she defeated Rep. Peter Breen last November. Breen (R-Lombard) is a nationally known pro-life attorney and by last year had become the House Republican floor leader. But Costa Howard beat him by a solid seven points.

Normally, legislators like Costa Howard are encouraged by staff to not stick out their necks on controversial legislation. Costa Howard voted against the $15 minimum wage bill, as did Reps. Bristow and Edly-Allen. The idea is to hold the seat for the party and let other, more politically secure members pick up the slack on the tough stuff.

But the Democrats have 74 seats and the governor needs 71 House votes to put his graduated income tax proposal on the ballot. Since the House Republicans are universally opposed, he can’t afford to lose more than three Democratic votes.

While the purpose behind the ads was to defend fellow Democrats against attacks from the other side, the spots can be perceived as Democrats being pressured in their own home districts by a billionaire governor to “put the middle class first” and vote for his tax plan. A vote against that plan, of course, would be perceived in that frame as a vote against “the middle class.”

Also, governors tend to inform legislators when they so much as travel to their districts. It’s seen as a common courtesy. Running TV ads without notice like this is simply unheard-of.

Even so, the other three Democrats said it was no big deal. Rep. Jonathan Carroll (D-Northbrook) said he has “no issues with the Think Big ads.” Carroll is the most liberal of the four. Rep. Carroll said he “appreciate(s) them engaging my constituents on an important issue.”

Rep. Mary Edly-Allen (D-Libertyville) said “I welcome the efforts to provide cover in my district on the issue.” The freshman claimed the local response to the ad “has been very positive and I look forward to continued discussions.”

Rep. Monica Bristow (D-Godfrey) echoed her colleagues, saying she “welcomed” the ads, and claiming “I think it’s important that my constituents hear the other side of the issue.”

And how are things going in the House? So far, House Speaker Michael Madigan hasn’t done much more than informally poll his members. He does that to see how many votes he (and the governor) will eventually need to find.

As of last week I was told, “We don’t have 60.” That’s far short of the 71 they need, but members aren’t really being pushed on it yet. Pritzker’s folks are having some informal chats with members.

To say that this is the governor’s top priority would be a huge understatement. Pritzker has staked his entire future on this proposal. His “bridge” budget proposal kicks the can in anticipation of eventual fiscal relief from his so-called $3.4 billion “Fair Tax.” It’s fully integrated into who and what he is.

If Pritzker fails, it will be the most spectacular flame-out since Republicans helped override Gov. Bruce Rauner’s veto of the 2017 tax hike. Come to think of it, this could be worse because that override saved Illinois from junk bond status and if this graduated tax thing goes down Pritzker could be the one tagged “Gov. Junk” unless they quickly switch their focus to a higher flat tax. And that’ll come with its own political nightmares.

Expect a hard, hard push.

       

39 Comments
  1. - lincoln's beard - Monday, Apr 8, 19 @ 8:43 am:

    Being in favor of amending the IL Constitution to enable a progressive income tax seems like it should be the bare minimum to be considered a Democrat in this state.


  2. - Put the fun in unfunded - Monday, Apr 8, 19 @ 8:46 am:

    If they are pulling ads at members’ requests, is that considered coordination?


  3. - Rich Miller - Monday, Apr 8, 19 @ 8:47 am:

    ===is that considered coordination? ===

    There’s no law against that.


  4. - Anonymous - Monday, Apr 8, 19 @ 9:02 am:

    “If they are pulling ads at members’ requests, is that considered coordination?”

    Isn’t it kinda the opposite? You have to report coordinated ad buys, not ad cancellations.


  5. - Perrid - Monday, Apr 8, 19 @ 9:02 am:

    Oops, anonymous@9:02 was me.


  6. - PublicServant - Monday, Apr 8, 19 @ 9:08 am:

    So, if you vote against putting the fair tax to a vote by your constituents, does that mean you don’t trust them?


  7. - qualified someone nobody sent - Monday, Apr 8, 19 @ 9:09 am:

    Pritzker hired very smart people to figure this out. A back up plan had to be considered prior to this roll out due to the nearly impossible task of amending the IL constitution. How high the rate will be and for how long a “temporary” increase will last are the only questions to be answered. Every attempt to make this “progressive” change to taxation has to be made for political survival for Dems. The reality of structural fiscal deficits hasn’t changed. Revenue is the only way out. Selling this isn’t easy. Taxpayers don’t want to hear facts about the historically LOW rate in Illinois since the 1970 implementation of the income tax. Low rates have benefitted the wealthy at the expense of State responsibilities like education expenditures and required actuarial pension contributions. Party has been over for over a decade and it’s time to pay the piper.


  8. - wordslinger - Monday, Apr 8, 19 @ 9:12 am:

    Pritzker might want to point out to Dem legislators that if they don’t vote now to put a graduated income tax on the 2020 ballot, the next tax vote they face will be for an increase in the flat rate. And that vote likely will be next year, before the election.

    The graduated income tax amendment on the ballot gives them tax cover through the next election.


  9. - truthteller - Monday, Apr 8, 19 @ 9:18 am:

    perhaps state legislators should listen to what the majority of their constituents want and not bow down to the anti-progressive tax special interest. Wouldn’t that be novel?


  10. - Grandson of Man - Monday, Apr 8, 19 @ 9:20 am:

    Unless Pritzker blows it by not accepting any policy amendment that will make the fair tax pass, the failure would be on the GA Democrats who vote against it.

    It’s imperative that Democrats understand what just happened in Illinois, the willful bleeding of social services and higher ed, and deliberate failure to pay debts, done by a multimillionaire governor who refused to negotiate even on one of his big policy asks, workers compensation.

    The other options are harsh cuts or a flat tax hike. Neither of these should be palatable to any politician who is a Democrat. If it’s toxic in a district or two, and the Democrat could get hurt by voting for a fair tax, find those, give them cover to vote no/present and get all the yes votes in line.


  11. - Robert the Bruce - Monday, Apr 8, 19 @ 9:21 am:

    I wonder how the progressive income tax polls in swing districts. I’m guessing fairly well, given its overall popularity. JB has the money to poll heavily in those districts to help convince undecided democrats.


  12. - RNUG - Monday, Apr 8, 19 @ 9:32 am:

    == Pritzker might want to point out to Dem legislators that if they don’t vote now to put a graduated income tax on the 2020 ballot, the next tax vote they face will be for an increase in the flat rate. ==

    This … All day long.

    In fact, just introduce a flat income tax increase bill with the rates needed to match the revenue of the progressive proposal, so the legislators know what the alternative is.


  13. - RNUG - Monday, Apr 8, 19 @ 9:34 am:

    == just introduce a flat income tax increase bill … ==

    Madigan could hold such a bill in his back pocket in committee so nobody has to take a floor vote at the moment, but it would be clear it could be popped out if the CA doesn’t pass.


  14. - Honeybear - Monday, Apr 8, 19 @ 9:35 am:

    In fact, just introduce a flat income tax increase bill

    Huh…..I wonder why they haven’t. Wouldn’t that solve a lot?


  15. - Fast Eddie - Monday, Apr 8, 19 @ 9:35 am:

    === Pritzker hired very smart people to figure this out. ===

    Objection. Speculation.

    Have any of the folk’s he’s hired ever past a statewide referendum?

    Media buys are not gonna get this done by themselves. It’s Sisyphean. As soon as the ads stop running, voter attitude reverts to old form within weeks. So, unless they are planning on staying on air for the foreseeable future and gradually increasing their buys every month, this is not gonna work.


  16. - Norseman - Monday, Apr 8, 19 @ 9:39 am:

    Word and RNUG are on it.

    Hold outs need to be sat down in Pritzker’s Office and Madigan’s Office and answer whether they have a plan to vote for flat tax increase or vote for sufficient cuts (show your work) that would cover the shortfall.


  17. - RNUG - Monday, Apr 8, 19 @ 9:41 am:

    == I wonder why they haven’t. ==

    Probably because MJM prefers to do any persuasion one on one behind closed doors rather than in public.

    But I still think this issue is important enough to pull out all the stops. Especially because the all the CA does is let the voters decide the issue.


  18. - Soccermom - Monday, Apr 8, 19 @ 10:01 am:

    Rich didn’t say she asked to have the ads pulled. They heard she wasn’t happy, called to discuss, then pulled the ads on their own. As I understand it, they asked if she wanted them to pull the ads and she said, “I can’t tell a PAC what to do.”


  19. - Shrimp gumbo - Monday, Apr 8, 19 @ 10:02 am:

    I would assume this will get on the ballot. as others have mentioned, the 97% that won’t foot the bill for this plan will surely like it better than an increase in the flat tax. but what’s the real end game here? there’s not enough meat on the “3% bone” to solve the problems… is there?


  20. - OneMan - Monday, Apr 8, 19 @ 10:12 am:

    == So, if you vote against putting the fair tax to a vote by your constituents, does that mean you don’t trust them? ==

    I am cool with that logic, can we apply the same thing to redistricting reform and term limit while we are at it then?


  21. - Grandson of Man - Monday, Apr 8, 19 @ 10:15 am:

    “there’s not enough meat on the “3% bone” to solve the problems… is there?”

    There’s more than what Pritzker is going for—in terms of the one percent. Per a study, incomes of the 1% shot up in the last three decades in Illinois, compared with the median income that didn’t grow very much. Low and regressive state income taxes have deprived us of revenue and forced the rest of the state to carry the tax burden of the wealthiest.


  22. - VerySmallRocks - Monday, Apr 8, 19 @ 10:29 am:

    There will have to be some transition of income tax rates for 1-2 years until/if Constitution amended. Can it be higher rates with much bigger deductions? Or is that too Republican, like what was passed in Congress last year?


  23. - Real - Monday, Apr 8, 19 @ 10:31 am:

    With Pritzker and Madigan backing the progressive tax and the dems at supermajorities I see no reason why it won’t pass. All this other talk is just to make the show more interesting and scary.


  24. - Rich Miller - Monday, Apr 8, 19 @ 10:45 am:

    ===There will have to be some transition of income tax rates for 1-2 years ===

    That’s not in the cards.


  25. - Jack Dog - Monday, Apr 8, 19 @ 10:58 am:

    No increase in taxes whether a Prog tax or increase in flat tax will achieve any long term solution to 80% underfunded pensions. It will only stimulate a further exodus out of Illinois. With the idea of taxing retirement income floating around expect the annual exodus out of State to reach 100k.


  26. - wordslinger - Monday, Apr 8, 19 @ 11:14 am:

    –With Pritzker and Madigan backing the progressive tax and the dems at supermajorities I see no reason why it won’t pass.–

    Costello is already gone. All it takes is three more in the House.

    You can’t claim a super-majority until you can deliver it on a tough vote.


  27. - Real - Monday, Apr 8, 19 @ 11:20 am:

    You can’t claim a super-majority until you can deliver it on a tough vote.

    -It will pass. With the dems at high enough supermajorities its still most likely to pass even if a few of them don’t vote for it. All they need is a few republicans to crossover if it comes down to that but I don’t think it will.


  28. - Levois - Monday, Apr 8, 19 @ 11:25 am:

    I may not agree with all of the governor’s objectives but so far he’s been effective. Time will tell if he could be as effective as some of our past governors such as for example Thompson, Edgar, and I dare add George Ryan.


  29. - Nonbeleiver - Monday, Apr 8, 19 @ 11:48 am:

    The big issue of unpaid bills seems rarely mentioned in this debate.

    Would the extra money be used to pay off those bills or would it just be more money for the state to spend and the deficit spiral continues.

    The lack of discussion on this issue as related to a graduated tax is ‘interesting.’

    According to the Governors budget GRF income has increased from $30.333 billion in 2017 to $36.783 billion in 2018 to $37.964 billion in 2019


  30. - Fav human - Monday, Apr 8, 19 @ 11:58 am:

    Can’t JB just promise cushy state jobs to anyone who loses due to voting for it?


  31. - Nonbeleiver - Monday, Apr 8, 19 @ 12:05 pm:

    Extreme pressure, promises and maybe even veiled threats by the Governor would lead me to believe that in the final analysis it will be on the ballot.


  32. - Responsa - Monday, Apr 8, 19 @ 12:05 pm:

    I think a not insignificant number of voters may see the pension language in the Constitution to be a mirror image issue of the fair tax issue. They may wonder why, if an amendment can be offered for a graduated income tax why an amendment should not also be offered for changing the pension language. The two together might actually and reasonably accomplish something positive to ameliorate Illinois’ current and future financial problems.


  33. - PublicServant - Monday, Apr 8, 19 @ 12:12 pm:

    Responsa, specifically how is changing the pension language in the constitution going to do anything regarding pension debt?


  34. - wordslinger - Monday, Apr 8, 19 @ 12:38 pm:

    –specifically how is changing the pension language in the constitution going to do anything regarding pension debt?–

    Some can’t quit that crack pipe.


  35. - City Zen - Monday, Apr 8, 19 @ 1:05 pm:

    ==if an amendment can be offered for a graduated income tax why an amendment should not also be offered for changing the pension language.==

    Yep. I imagine this will eventfully be featured prominently in the opposition ads. Forces the other side to defend their stance, and no matter how logical it may be, will just rile folks up.

    Marriage penalty, pension clause, fair maps…and we’ve got a ways to go.


  36. - Whatever - Monday, Apr 8, 19 @ 4:59 pm:

    ==Marriage penalty ==

    There will be no marriage penalty unless the income tax act is amended to require joint returns. Right now, joint returns are elective, not mandatory.


  37. - Nonbeleiver - Monday, Apr 8, 19 @ 5:51 pm:

    Whatever - Monday, Apr 8, 19 @ 4:59 pm:

    ==Marriage penalty ==

    There will be no marriage penalty unless the income tax act is amended to require joint returns. Right now, joint returns are elective, not mandatory.

    Please explain how this would work. Yes, I could be missing something.

    But as I understand it the Illinois return is based upon the Federal return. Since married people usually have joint income, including investments, it would appear to me that they would now have to separate out all of this and form ’separate taxing entities with individual income being broken down and then filing separate returns.

    Very complicated and needless if there were no marriage penalty in the Gov’s proposal.

    Real question. Am I missing something?


  38. - Whatever - Monday, Apr 8, 19 @ 6:02 pm:

    There is only a marriage penalty if married couples pay more than two single people with the same incomes. This happens federally when the couple have a choice between filing a joint return and their combined incomes put them in a higher tax bracket than either would pay separately or filing as married filing separately, and having some deductions and credits disallowed because they are allowed to married couples only when filing separately or because the married filing separately tax brackets are smaller than single filer brackets. Illinois does not mandate joint filing, and does not have any intentional penalties for married filing separately.

    35 ILCS 5/502:

    (c) Joint returns by husband and wife.

    (1) Except as provided in paragraph (3):

    (A) if a husband and wife file a joint federal income tax return for a taxable year ending before December 31, 2009, they shall file a joint return under this Act for such taxable year and their liabilities shall be joint and several;

    (B) if a husband and wife file a joint federal income tax return for a taxable year ending on or after December 31, 2009, they may elect to file separate returns under this Act for such taxable year. The election under this paragraph must be made on or before the due date (including extensions) of the return and, once made, shall be irrevocable.

    (3) If either husband or wife is a resident and the other is a nonresident, they shall file separate returns in this State on such forms as may be required by the Department in which event their tax liabilities shall be separate; but if they file a joint federal income tax return for a taxable year, they may elect to determine their joint net income and file a joint return for that taxable year under the provisions of paragraph (1) of this subsection as if both were residents and in such case, their liabilities shall be joint and several.


  39. - Viking - Monday, Apr 8, 19 @ 10:24 pm:

    Oh how I long for the days of Thompson and Edger.


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