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* From the governor’s remarks to reporters today…
I’d like to take a moment before we begin to recognize the incredible bravery and dedication of our first responders. Already in the 51 days I’ve served as governor, we have laid a State Trooper to rest, seen five police officers injured after running into a workplace shooting that took five lives, mourned a Godfrey district firefighter who died in the line of duty, and another law enforcement officer shot today while executing a warrant. All of Illinois grieves for the fallen, and our prayers are with their families and those injured in the line of duty. We owe all of them a debt of gratitude.
Thanks for joining us.
My administration has begun negotiations over the fair income tax so we can finally put Illinois on course toward firm fiscal footing. As I said throughout the campaign, Illinois’ flat tax system is unfair to the middle class and those striving to get there. People like me should pay more and people like you should pay less. That’s what the fair tax will do.
Before I get into the details, it’s important to talk about how Illinois got here, and what our choices are.
I was sworn in just 51 days ago, and the first thing I did was begin to dive into the details of the state’s precarious fiscal condition. It was worse than we thought. Over the ensuing weeks our work showed that the damage done in previous years was beyond the assumed $2 billion deficit and even beyond the $2.7 billion in the Comptroller’s excellent report. As our study showed, Illinois actually faces a $3.2 billion-dollar budget deficit next year, and that the prior four years had left the state with nearly $10 billion of additional late payment debt – on top of the $5 billion backlog at the beginning of the last term. The state has been operating with a multi-billion-dollar structural deficit that has a tremendously destabilizing effect on our state’s economy, businesses, jobs and the future of our working families. I don’t know anyone in Illinois that thinks we can any longer just whistle past the graveyard and ignore the fiscal challenges we face. And no one thinks the right answer is to replay the last four years of gridlock and dysfunction.
So my administration has been diligently working on a comprehensive approach to solving the problem and getting our state on track to economic growth and balanced budgets.
Instituting a fair tax as I’ve proposed, will improve the arc of our state’s finances forever and make our system more fair for everyone.
It’s wrong that I would pay the same tax rate as someone earning $100,000 – or even worse pay the same tax rate as someone earning $30,000 – which is why 33 states and the federal government use lower rates for lower earnings and higher rates for higher earnings.
As I outlined when I addressed the General Assembly, those who oppose this choice have very few options to stabilize our finances.
They might choose to cut education, public safety, environmental protection and other government services by 15 percent. That means larger class sizes, higher costs for kids going to college, more hollowing out of critical human services, and fewer State Police. Most damningly, this would lead to a very predictable increase in your local property taxes. This type of thing was tried, and it failed – resoundingly. And this approach certainly won’t create good paying jobs and build the Illinois we deserve or we want for our children.
Another choice they could make is to raise taxes by 20 percent on every person in the state of Illinois. To generate enough revenue, they would need to raise the state income tax on the working poor and the middle class from today’s 4.95 percent to at least 5.95 percent. For a mom making $61,000 that would mean a tax increase of $521 per year. All while the wealthy aren’t paying their fair share.
There is a better, more fair way. And it protects working families. My proposal accomplishes several goals that I outlined from day one.
First, the fair tax would eliminate the budget deficit, balance future budgets and reduce the pension liability by producing revenue of $3.4 billion.
Second, under this plan, everyone who earns up to $250,000 will pay the same or less than what they’re paying today. That’s 97% of Illinoisans. In some cases this reduction will be very modest, and in some cases, especially for families with children, it will amount to hundreds of dollars. That’s real money that working families can use for an emergency car repair, groceries to feed their kids, or child care expenses.
Third, working families are buried under a property tax system that asks them to carry too much of the load. My proposal provides much needed property tax relief with a $100 million increase in the property tax credit. A single homeowner who makes less than $250,000 will see an increase in their property tax write-off of 20 percent. A couple who makes less than $500,000 will also see a property tax write-off of 20%. To be clear, approaching property tax relief in this way benefits homeowners and doesn’t jeopardize schools or local communities.
Fourth, included in this proposal is a new tax credit of $100 per child for families raising children, especially those families who most need it. Single parents earning less than $40,000 a year will get the full credit, and single parents who earn more than $40,000 will get the credit on a sliding scale up to $80,000. For two-income families, they get $100 per child up to $60,000 a year on a sliding scale up to $100,000.
Fifth, this proposal keeps Illinois competitive with our neighbors. Most families in Iowa and Wisconsin pay more in income taxes under their current tax systems than they would if they lived in Illinois under our proposed fair tax.
Now, there are those who want to scare people by claiming that this proposal will cause residents and businesses to flee Illinois. They couldn’t be more wrong. They ignore the fact that people and businesses are fleeing our state now under our current regressive tax system, yet states with fair tax systems on average grow faster and create more jobs than Illinois.
It’s time we stabilized our state’s finances, so we can give businesses and new entrepreneurs the certainty that Illinois has its fiscal house in order. This fair tax proposal is fiscally responsible and makes Illinois a more predictable place for existing businesses to operate, and for new businesses to start and grow.
In the weeks ahead, we’re looking forward to discussing and debating this proposal with members of the General Assembly on both sides of the aisle. I respect the right of opponents to disagree with this proposal. But they should do so in good faith with a specific counter proposal. Not pie in the sky. We should all demand that they tell you specifically what they support that will address a $3.2 billion-dollar budget deficit, pay down $15 billion of debt from unpaid bills, and protect working families.
The principle options for fixing state finances are:
1. Make a drastic 15 percent cut to schools, public safety, transportation, and universities.
2. Raise income taxes by 20 percent on the middle class and everyone else in Illinois. Or
3. Implement a fair income tax that only raises taxes on 3% of people in Illinois.
I choose fairness.
posted by Rich Miller
Thursday, Mar 7, 19 @ 4:05 pm
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“But they should do so in good faith with a specific counter proposal. Not pie in the sky”
And not the social media screams of cut, cut, cut. The time is here for no longer hiding behind hysterical talking points. Put the counters out. Let’s see them.
Comment by Grandson of Man Thursday, Mar 7, 19 @ 4:12 pm
Seems to make sense.
Comment by JDuc Thursday, Mar 7, 19 @ 4:13 pm
This is the critical part:
“The principle options for fixing state finances are:
1. Make a drastic 15 percent cut to schools, public safety, transportation, and universities.
2. Raise income taxes by 20 percent on the middle class and everyone else in Illinois. Or
3. Implement a fair income tax that only raises taxes on 3% of people in Illinois.”
Everyone agrees the state’s finances are in trouble. If you want to fix the states finances, but you don’t want progressive taxes, and you don’t want to raise the flat tax, you need to come out and say that you want to cut services.
Comment by Actual Red Thursday, Mar 7, 19 @ 4:16 pm
R.I. P. Jacob Keltner.
Comment by Da Big Bad Wolf Thursday, Mar 7, 19 @ 4:17 pm
Which option does Hammond support?
Comment by Anonymous Thursday, Mar 7, 19 @ 4:17 pm
Huzzah.
Comment by KaneFalcon Thursday, Mar 7, 19 @ 4:19 pm
JB enough already. I give you kudos on a decent graduated tax plan. But the notion you addressed the working poor and middle classes biggest problem(crisis) ,aka, property taxes, is laughable.
Comment by Blue Dog Dem Thursday, Mar 7, 19 @ 4:21 pm
Are schools, public safety, transportation, and universities the only thing the State spends money on? And it has to be all of one or nothing? Asking for a friend.
Comment by Shemp Thursday, Mar 7, 19 @ 4:22 pm
== That’s real money that working families can use for an emergency car repair, groceries to feed their kids, or child care expenses.==
Or a portion of their next property tax raising school referendum.
== yet states with fair tax systems on average grow faster and create more jobs than Illinois.==
Like Tennessee.
Comment by City Zen Thursday, Mar 7, 19 @ 4:24 pm
“Yep 3% that’s all folks, promise, I’m serious..would everyone stop laughing please so we can finish this press conference”
Comment by Yep Thursday, Mar 7, 19 @ 4:29 pm
–I did was begin to dive into the details of the state’s precarious fiscal condition. It was worse than we thought.–
I wonder if there was ever a newly elected chief executive at any level, any where, who did not say this?
Comment by wordslinger Thursday, Mar 7, 19 @ 4:33 pm
“can any longer just whistle past the graveyard”…kudos on the imagery. Can Eric Allie do a cartoon of Rauner doing this?
Comment by Aldemuvs Thursday, Mar 7, 19 @ 4:35 pm
“Drastic cuts” are what a lot people in Illinois have had to deal with in their own personal budgets since 2008.
Comment by Steve Thursday, Mar 7, 19 @ 4:35 pm
–the working poor and middle classes biggest problem(crisis) ,aka, property taxes, is laughable.–
Perhaps you should direct your concerns to your property-tax-levying local governments. You guys down south are already far ahead on what you get from the state compared to what you put in.
Comment by wordslinger Thursday, Mar 7, 19 @ 4:39 pm
Then tell us what that looks like Steve if you support the 15% cut option.
Comment by Demoralized Thursday, Mar 7, 19 @ 4:40 pm
There we go. Blaming the governor for municipal and county taxes and then a snarky comment. Thank God the Governor is serious, at least.
Comment by Anonymous Thursday, Mar 7, 19 @ 4:41 pm
==Then tell us what that looks like Steve if you support the 15% cut option.==
Ask JB. It’s in his proposal.
Comment by City Zen Thursday, Mar 7, 19 @ 4:44 pm
Fixing the property tax crisis. Created in Springfield, needs to be fixed in Springfield.
Comment by Blue Dog Dem Thursday, Mar 7, 19 @ 4:45 pm
“Or a portion of their next property tax raising school referendum.” If that’s a problem for them, then I suggest they vote “No.”
Comment by Skeptic Thursday, Mar 7, 19 @ 4:48 pm
Outrageously dishonest. $3.4B (even if true, which it is not) wouldn’t even cover the pension problem alone.
Comment by driveby Thursday, Mar 7, 19 @ 4:55 pm
–Fixing the property tax crisis. Created in Springfield,–
How’s that? You don’t have elected local officials with taxing powers where you live?
Where I live, property taxes provide more than 90% of the revenue for local schools. But I knew that when I chose to live here, so I’m not beefing.
What percentage of school budgets where you chose to live come from local sources? State sources?
Comment by wordslinger Thursday, Mar 7, 19 @ 4:58 pm
==Instituting a fair tax as I’ve proposed, will improve the arc of our state’s finances forever==
He really should have edited this little piece of hyperbole bordering on treacle out of his speech. Otherwise I thought it was a pretty good and thoughtful presentation.
Comment by Responsa Thursday, Mar 7, 19 @ 5:19 pm
His principle [sic] options are purposely and dishonestly rigid. The implication that you can choose only 1 and only as he laid it out is inane. If you’re going to argue that a progressive structure is more appropriate, fine. I agree, even as someone who will be negatively impacted by this. But framing it like this now frees him from ever having to look for cuts, which don’t necessarily need to be 15% across the board if part of a blended approach. The view that *all* state agencies are cut to the bone and providing only vital services top to bottom that cannot be touched — I don’t agree at all. But it’s a lot tougher to fight agencies and stakeholders on that than to gang up 97% of the State on the other 3% along with the other revenue bumps they’ve pushed, so they ditch that entirely.
The part I find most insulting, though, is the notion that 3% bearing the entirety of the increase is the most fair (or even fair, at all), without any clear justification other than nice round numbers. 90/10 still seems like it would be pretty popular, even 80/20. $200,000 is a lot of money. $170,000 is a lot of money. If you’re going to take my money and tell me it’s fair, then explain why the person making $200,000 in Central Illinois is already paying his fair share while I’m not.
People accept a negative result better when they feel they’ve been treated fairly in the process. Does anyone facing a tax increase feel that’s been the case here so far? Does anyone expect to be treated fairly going forward, and not as miserly elites who have, notwithstanding the efforts of all others, closed our pockets this entire time?
Comment by The Big Salad Thursday, Mar 7, 19 @ 5:58 pm
Can anyone do basic math? By raising the tax rate 50% on the top 3% manna will fall from heaven and deficits will disappear.
First bit of major film flam from a guy with a raft of money in off shore accounts that will not pay any of the new tax burden.
Comment by Plutocrat03 Thursday, Mar 7, 19 @ 6:02 pm
Seems like people are evenly split on this. The “pick one of the three options” doesn’t ring true to me either. Really JB, the greatest minds in the state put their heads together and said it’s one of these three?
My concern is it doesn’t go far enough in fixing the problem. We’re going to need a lot more, even after he booted the pension can pretty hard.
Actually, you could take all three options together and not fix the state. If he’s lucky enough to get the progressive tax passed, he’ll come back to options one and two in a year or so.
Long live the king.
Comment by SSL Thursday, Mar 7, 19 @ 6:18 pm
====Then tell us what that looks like Steve if you support the 15% cut option.==
Ask JB. It’s in his proposal.==
Zen, this makes twice today that Steve (and you) have chickened out when called on this. You’ve spent the entire day on this blog whining and demanding cuts instead of this plan, and so far all either of you have offered when asked to explain what you want to cut is “because I don’t have to” from the original post and “Ask JB” from this one.
This is after you spent the last 4 months smugly noting that there was no way JB’s plan could possibly exempt people making less than $150K, only to be proven wrong. It would be better for everyone if you stopped arguing like a child for once and either spell out what you want to cut, or offer an alternative tax plan. If that’s not something you’re interested in doing, you might want to sit out the next couple of plays and let the adults discuss this.
Comment by Lester Holt’s Mustache Thursday, Mar 7, 19 @ 6:18 pm
====Really JB, the greatest minds in the state put their heads together and said it’s one of these three?====
Come on. It’s a press pop. At least supply your own proposal in detail in you disagree. Didn’t the last four years teach us anything? And just whining and screaming won’t solve our problems.
Comment by Been There Thursday, Mar 7, 19 @ 6:37 pm
Lester’s Stacie,
Could not agree more, McSweeny sounds like a three year old, I want a cookie x10, except I want to cut taxes. Ives , cut taxes, Rauner, I’m going to cut taxes. None of them could cut anything even Rauner department heads. 80%-90% go to schools, these people should run for school boards and see where there cut ideas go when they propose them to their neighbors. McSweeney is the best at the crying, cut taxes, put your plan out there by departments and position. MCSWEENY SHOW US YOUR CUTS
Comment by Popeye Thursday, Mar 7, 19 @ 6:58 pm
Why is no one including JB talking about the huge corporate tax cut from 9.5 down to 7.5? How does that help balance the budget? Sounds like the same thing Trump did. Tout tax cuts for everyone but middle class get a miniscule cut.
Comment by Concerned Citizen Thursday, Mar 7, 19 @ 7:01 pm
Rauner had four years to propose cuts. He came into office claiming massive waste in state government. Yet his budget proposals instead relied on magic revenues from service taxes and selling the JRTC. There is nothing to cut that wouldn’t cause more people to flee.
Rauner could have also proposed a larger flat tax instead allowing the previous tax to expire and then vetoing the current tax which was fortunately overridden.
ILGOP had four year to get Illinois on a firm financial footing, but spent it bashing the Speaker and Unions. Indeed the ILGOP made the situation worse. So now the ILGOP just needs to get out of the way or get onboard with the progressive tax.
Comment by A Jack Thursday, Mar 7, 19 @ 7:07 pm
Right thing to do
Comment by m4a Thursday, Mar 7, 19 @ 7:19 pm
Who needs this money more, the social services agency tasked with protecting children of mentally ill parents or someone who may be making 500 times what the majority of people working at the company, which (s)he runs apparently nearly alone, live on?
Comment by Huckleberry Mentat Thursday, Mar 7, 19 @ 7:35 pm
Actual Red,
I want to cut services. See, that wasn’t so hard.
Comment by Tim Thursday, Mar 7, 19 @ 8:19 pm
Layoffs, Layoffs, Layoffs
Comment by realworld Thursday, Mar 7, 19 @ 8:31 pm
JB’s stating that a reduction from 4.95% to 4.90% is a tax “cut”, even if true mathematically, is disingenuous at best, and opens his administration up to criticism. He could have simply triumphantly claimed that 97% would “not see a tax increase”, and went from there.
But PR aside, the proposal does not do nearly enough, I believe it should have more closely mimicked IA’s or MN’s rate structures, significantly lowering the rates on the bottom 20% and increasing the rates on the top 20% - to me, that’s the definition of “progressive”. Maybe the GA can “fix” this. As it stands now, it does not do nearly enough to raise dollars and reduce the property tax burden. Having to go back to the trough in a year would be a mistake. So if asked to vote for this in its present form, I will say, “No”.
Comment by Stuntman Bob's Brother Thursday, Mar 7, 19 @ 8:47 pm
=== He could have simply triumphantly claimed that 97% would “not see a tax increase”, and went from there. ===
Yup.
Comment by Cadillac Thursday, Mar 7, 19 @ 9:42 pm
Tim…==I want to cut services===
One wonders if you know anything about the extent and cost of services to Illinois residents, nor who would be hurt by cuts of 15%. But it is great that you admit it. I assume you have some company, but that’s why we have elections.
Comment by Jibba Thursday, Mar 7, 19 @ 10:00 pm
Any bets on the expenditures for the FY20 budget being higher than in the current budget. Let me add #4 to JB’s list. No increases until he backlog of bills is eliminated.
Comment by Sam Hall Thursday, Mar 7, 19 @ 10:26 pm
If the option to the progressive tax was to make 15% cuts everywhere, my 3% proposal to cut most-but-not-all services doesn’t sound so awful to either 1) make more progress on the debt or 2) give the 97% a bigger tax break. The way the Governor presents this, it was 15% cuts or nothing at all.
Comment by lake county democrat Friday, Mar 8, 19 @ 7:49 am
Thought a lot about the plan. What is inseemly is giving 97 percent of all residents a total pass in helping fix the fiscal mess. Not many millionaires collecting a state pension. Where is the shared pain. No doubt a lot of people who can afford to move are going to.
Comment by Sue Friday, Mar 8, 19 @ 7:51 am
People complaining about the “small cuts” are mistakenly comparing the proposed rates to the current 4.95%. Instead you should be comparing it to the 5.95% rate you will likely end up paying if the progressive structure isn’t implemented.
Comment by Anonymous Friday, Mar 8, 19 @ 8:03 am
In our increasingly mobile world, this is playing with fire…or in the case of this formerly great state, fyre.
Comment by DuPage Moderate Friday, Mar 8, 19 @ 8:06 am
Didn’t we vote overwhelmingly for a millionaire tax a few years ago? Isn’t this what this really is? Btw, i to would like to see no new programs other than a modest education increase and capital funding. The debt has to be paid down.
Comment by Stew Friday, Mar 8, 19 @ 8:12 am
==What is inseemly is giving 97 percent of all residents a total pass in helping fix the fiscal mess.==
What is unseemly (that’s the word you were looking for) is that comment. You really want to go after the lower and middle class do you? Heckuva a gal aren’t you Sue.
==Not many millionaires collecting a state pension. Where is the shared pain.==
What does that have to do with anything? Are you suggesting that somehow those who have state pensions should be targeted?
Comment by Demoralized Friday, Mar 8, 19 @ 8:31 am
=even if true mathematically, is disingenuous at best=
I view math as math. And I would also say that if the rate went from 4.95 to 5.00 there would be screaming about the “increase.”
=What is inseemly is giving 97 percent of all residents a total pass in helping fix the fiscal mess.=
Well just a week ago people were complaining that there was no way to do this without punishing the “middle class.” So your argument this week is that they aren’t being punished? Good luck with that.
Comment by Pundent Friday, Mar 8, 19 @ 8:36 am
Even Sue is now not screaming about class warfare, but saying that taxes arent high enough, that the states fiscal difficulties must be addressed.
Come to the table, Sue. Come, let us reason together.
Comment by Anonymous Friday, Mar 8, 19 @ 8:38 am
So Sue is now arguing that pensions should be taxed? Please ask your legislator introduce that bill and vocal with your support for a tax increase.
Comment by JIbba Friday, Mar 8, 19 @ 8:47 am
==So Sue is now arguing that pensions should be taxed?==
I understood the core of her argument to be that for a fiscal problem this large, it is hardly fair that 97% of the State was exempted from kicking in anything more than they currently are. That $250,000 was way too high of a threshold.
I agree.
Comment by The Big Salad Friday, Mar 8, 19 @ 9:00 am
I don’t disagree that $250K is too high, but Sue was specifically calling out state pensioners for tax increases. And weren’t you just the other day protesting tax increases of any kind, and now you both want more folks to pay? Sounds like you and Sue are trying to throw anything at the wall and see if it sticks, just to gin up protest against the whole plan.
Comment by JIbba Friday, Mar 8, 19 @ 9:04 am
You all miss my point. If the economic chaos is a statewide issue why ask only 3 percent of taxpayers to contribute to a fix. Those arguing otherwise who are in the 97 percent and benefiting from state spending are simply hypochrits.
Comment by Sue Friday, Mar 8, 19 @ 10:19 am
==And weren’t you just the other day protesting tax increases of any kind, and now you both want more folks to pay? ==
I don’t know what you’re referring to, so here are my general thoughts:
I support a progressive structure, or more specifically, one that at least comparatively protects the ability of all families to provide for basic needs.
I think we are overly taxed because the State has been and is mismanaged, and I don’t think additional taxes will really address many of the core problems. So we are exploring a potential move from Illinois because of that and other reasons.
I think that this tax increase, as proposed, is unfair in its 97/3 split, and I think it also absolves the administration from doing the hard work in other areas to rein in costs where possible.
If we are going to go down this path, though, then yes, those under $250,000 should be kicking in more as well. I am fine with it being less than the increase I am contributing, but it’s a huge base of income that was ceded immediately. No way they can go back below that now, even with a very small increase.
Comment by The Big Salad Friday, Mar 8, 19 @ 10:35 am