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* Governor Pritzker writing for Crain’s Chicago Business…
To put Illinois back on firm fiscal footing, we must make some hard choices among three feasible options: 1) raise income tax rates on everyone by raising the flat tax; 2) cut schools, universities, public safety, mental health and addiction treatment drastically; or 3) raise tax rates only on the wealthy while giving the middle class a tax break. I choose option 3, the fair tax.
Let me explain why I support a constitutional amendment to change our tax structure to protect the middle class.
The fair tax is what a vast majority of states and the federal government use. But in Illinois, we don’t. Our wealthiest residents have enjoyed 50 years of the middle class and working class paying a higher tax burden while the richest pay a much lower tax burden. In fact, today in Illinois, the lowest earners in our state pay 14 percent of their income in taxes while the wealthiest people in our state pay only about 7 percent.
* He also wrote about progress on local property taxes…
The bulk of homeowners’ local property taxes—nearly 60 percent on average—goes to fund local schools. If the state does more to pick up its share of school funding, property taxes can go down. So I began to make that shift by increasing the state’s share of school funding.
The next-largest property tax driver is municipal and first responder pension funds—which is why I insisted on passing landmark pension reform to consolidate police and firefighter pensions. This will improve investment returns and lower costs, and that means a lower property tax burden for homeowners.
Lastly, our bipartisan Rebuild Illinois capital program provides hundreds of millions of dollars directly to local governments for transportation infrastructure and buildings that otherwise would be paid for by property taxes.
Discuss.
posted by Rich Miller
Friday, Feb 7, 20 @ 11:16 am
Sorry, comments are closed at this time.
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Even though the governor has laid out a great path for fiscal sanity, it will never be enough for the right-wing because fiscal sanity isn’t their actual goal.
Comment by Precinct Captain Friday, Feb 7, 20 @ 11:27 am
This is a very interesting choice of words;
=== If the state does more to pick up its share of school funding, property taxes can go down===
“Can”… “can go down”
Here’s the trouble I see with this pitch.
With the word “can”, there is no guarantee of relief. Heck property taxes *can* go up as well.
You can’t pitch this as an option that *may* allow for property tax relief, because many will see this as a hollow chance to seemingly trying to solve two things.
That’s not the best pitch. Nope.
In the coming weeks, this Governor, who will spend whatever it takes to pass the progressive income tax, will need to put some serious energy in property tax relief, well outside the word “can”, and be willing to put pencil to paper to show real school funding relief, K-12, and maybe even throw something at higher ed too.
“Can”
The word “can”, it “can” sink the whole premise unless some real numbers are put towards showing that the word “can” will change to the word “will”
The reality is folks who want seriously high school funding, maybe like a New Trier, voters might continue to fund at super high rates, under a new formula, but it can’t be sold as a “possible” or “can” when schools are already cutting with expected new revenues.
“Can” … can sink the whole boat.
Comment by Oswego Willy Friday, Feb 7, 20 @ 11:28 am
I wish he could show or pass something that would show a direct correlation or tax swap to say we raise x your school tax portion would go down y. Of course I also wish I would win lottery
Comment by DuPage Saint Friday, Feb 7, 20 @ 11:29 am
Let me know when he gets around to bundling in pension and spending reform, otherwise I see no need to give Illinois a blank check.
Comment by 588-2300 Friday, Feb 7, 20 @ 11:30 am
=== it will never be enough===
With great respect,
Challenging the governor on the premise of “can” is more than fair, since a hollow pitch of “possible” is also predicated on an idea that the state needs to fund schools better.
Can’t tell me about these ideas and not show me how the governor sees these numbers falling… or how I should see the word “can” as a “good” thing?
Comment by Oswego Willy Friday, Feb 7, 20 @ 11:33 am
Look, I get that property taxes are high in Illinois. BUT IT’S MAINLY A LOCAL ISSUE. If there was a cost effective statewide solution don’t you think it would have been done by now? All you can really do is give local governments the tools to lower their tax burdens and the Governor is trying to do that while also balancing the state budget that’s a mess.
Comment by Suzzz Friday, Feb 7, 20 @ 11:36 am
Excellent op-ed and right on the money. Sorry to keep belaboring it, but students, workers and social services recipients already have paid. There was Tier 2 pension reform, inhumane social services and higher ed cuts perpetrated by a multimillionaire governor and state workers going four years without legally-owed pay increases, and also no COLA’s for four years.
The new decade finds us in need of discarding the anti-Fair Tax propaganda: that the middle class will be hurt, the rich will leave, jobs losses and all the rest. We have many examples to disprove the above, such as our neighbor states with progressive taxes who are doing better fiscally and economically, as it pertains to the unemployment rate, long-term studies of rich people not leaving high-tax states, less outmigration and even population gains in California and Minnesota, where the top rates are among the highest.
Comment by Grandson of Man Friday, Feb 7, 20 @ 11:38 am
===otherwise I see no need===
lol
Yeah. You would be leading the charge otherwise. Right.
Comment by Rich Miller Friday, Feb 7, 20 @ 11:39 am
==The word “can”, it “can” sink the whole premise unless==
This is the musing of a litigious mind. The average Joe isn’t going to read this and believe he will use an escape door to NOT lower property taxes.
JB is a trained attorney and skilled politician. Both professions tend to not lend themselves to self-imposed prisons ala Bush 41’s “read my lips” quote.
What he’s saying is true: If the state takes on more of the burden, then communities can see relief. He could further his point, however, by saying the other 2 options do not offer relief from property taxes.
==I see no need to give Illinois a blank check.==
This metaphor just doesn’t work no matter how hard some of you push it. The state can spend money and it can raise money from levying taxes. The fair tax structure proposed will have real numbers and projections based on the analysis provided GOMB and IDOR.
The real blank check was the pension ramp and loophole that let’s Illinois taxpayers short the bill every time something “else” comes up. Well, that needs to end and it needs to end now. It’s time for us to pay up and pay down our debts.
Comment by MG85 Friday, Feb 7, 20 @ 11:44 am
“to bundling in pension and spending reform”
All the effective pension reform that is legal has pretty much been done, other than paying the bill. Or are you referring to cheating pensioners, which is not legal? I guess you just never be able to support new taxes in good conscience, then.
I applaud JB for mentioning the other choices. He will have to lay out these in more excruciating detail to convince some voters of the right choice.
Comment by Jibba Friday, Feb 7, 20 @ 11:46 am
I remember when Jim Edgar had to raise the state tax. A portion of it was to be split between school districts and municipalities. He said they should then lower their local property taxes. The state tax increase took place, the local property tax rollback did not happen.
Comment by DuPage Friday, Feb 7, 20 @ 11:51 am
=== The average Joe isn’t going to read this and believe he will use an escape door to NOT lower property taxes.===
The state is not involved with property taxes.
That’s the whole thing.
=== This is the musing of a litigious mind.===
Unless the governor wants to show that relief, and show it as a “can”… yikes.
The governor is better off repeating a real truth, a kabillion times;
“Only 3% will see a tax increase” and, “the state needs revenues to meet obligations, including pensions”
=== What he’s saying is true: If the state takes on more of the burden, then communities can see relief. He could further his point, however, by saying the other 2 options do not offer relief from property taxes.===
Threading that needle… kinda like what i said… and the pitfall too…
=== The reality is folks who want seriously high school funding, maybe like a New Trier, voters might continue to fund at super high rates, under a new formula, but it can’t be sold as a “possible” or “can” when schools are already cutting with expected new revenues.===
Litigious mind or not, the Average Joe can read a tax bill and if there’s relief.
Comment by Oswego Willy Friday, Feb 7, 20 @ 11:52 am
==The average Joe isn’t going to…==
Guessing what “the average Joe” (if there even is such a thing anymore) does and thinks is a fool’s errand. That type of thinking is usually roundly mocked here.
Comment by Responsa Friday, Feb 7, 20 @ 11:57 am
=== That type of thinking is usually roundly mocked here.===
Yep.
People know their property taxes, they also know when they go up or down.
“Can” doesn’t do much to change that
Comment by Oswego Willy Friday, Feb 7, 20 @ 12:02 pm
J. B. will have my support if he modifies the current version of the “FAIR” tax to include income he currently hides from the Illinois tax collection process in his Caribbean trust funds.
Comment by PlsSenSorMe Friday, Feb 7, 20 @ 12:05 pm
=to bundling in pension and spending reform=
Did you sleep through the Quinn and Rauner years? The ILSC has been clear on what options exist for pension obligations after Quinn’s failed attempts and I would remind you of the Tier 2 reforms. Rauner tried spending reform through his “starve the beast” initiative which only served to balloon the bill backlog to $15B.
Comment by Pundent Friday, Feb 7, 20 @ 12:05 pm
===J. B. will have my support if he modifies===
Right. lol.
The rank disingenuousness of some y’all is pretty hilarious.
Comment by Rich Miller Friday, Feb 7, 20 @ 12:10 pm
Why can’t he be honest. Let’s acknowledge that income taxes are going to have to rise for more people then just the top 3 percent and there is not going to be statewide property tax relief. Politicians here have been claiming for 40 years that property tax relief was just around the corner. Well it’s not going to happen as long as the State is staring at 140 billion in unfunded tax liabilities and local govt’s have their own pension problems. If anyone in Illinois is looking for a property tax red- I suggest you look into moving
Comment by Sue Friday, Feb 7, 20 @ 12:17 pm
=== Let’s acknowledge that income taxes are going to have to rise for more people then just the top 3 percent…===
That’s not on the ballot, but good try, lol
Comment by Oswego Willy Friday, Feb 7, 20 @ 12:19 pm
=The word “can”, it “can” sink the whole premise unless some real numbers are put towards showing that the word “can” will change to the word “will”=
OW, I disagree. Here is why, first and foremost is the states century long track record of shorting schools and pensions. This is the singular driver of the states financial issues. Illinois legislatures have never demonstrated the ability to fund education with consistency. While I generally believe Pritzker is trying to do the right thing he will not be governor forever.
PTELL- Because schools do not trust the state PTELL has forced schools to maintain a higher tax rate (really levy) than needed in high wealth areas. If you drop the rate or lower the levy and then thedistrict finds itself needing revenue teh only way to get the old rate is through referendum. Referendum in Illinois is a long process and very iffy.
There is still great disparity in how schools are funded by the state. High wealth districts are not reliant on the state for funding like everyone else. High poverty districts like Cicero 99 get massive amounts of state and federal funding, so much so for Cicero that they typically run large annual surpluses. During the proration years they were still running $12 to $18 million dollars annual surpluses meaning they were not spending all the money they were getting. At one point they had $150 million in the bank. But middle income district have neither the local wealth or the the poverty rate (even though some exceed 50%) needed to generate funding. Many still struggle.
I would rather keep my tax dollars close to home instead of sending them to the state. Illinois needs to string together 5-10 years where they handle their funds correctly before I would be willing to cede any level of the ability to raise funds locally. I want to see the graduated tax process work first.
Beginning almost 20 years ago Ralph Martire had a plan for a property tax/state tax swap. As he articulated it there would be a minimum of 20% or 25% reduction in property tax reduction for an increase in the tax base at the state level. People should have taken that deal.
With respect.
Comment by JS Mill Friday, Feb 7, 20 @ 12:20 pm
Sue has rather neatly summed it up, but she left out the option of at least some spending control. Fixing the mess is going to require all 3 things JayBob laid out in his original flawed premise of picking only 1 of the 3 options. So we will have to raise taxes on more than the 3%, and reduce spending in some areas to fund areas currently being shorted. And property taxes are not going down anytime soon. It is insulting to me that they even try to claim that will happen if the unfair tax is passed.
Comment by Captain Obvious Friday, Feb 7, 20 @ 12:38 pm
=So we will have to raise taxes on more than the 3%, and reduce spending in some areas to fund areas currently being shorted.=
Well if you believe that a tax increase beyond the top 3% is inevitable then don’t vote for it. But Pritzker is making it clear that the alternative is an increased flat tax on everyone. It’s also easy to talk about “spending control” while not offering any specific solutions on what that actually means. Why don’t you brush up on consent decrees and programs that are matched with federal funds and let us know where you want to start making cuts?
Comment by Pundent Friday, Feb 7, 20 @ 12:45 pm
#1. to OW=== Let’s acknowledge that income taxes are going to have to rise for more people then just the top 3 percent…===
“That’s not on the ballot, but good try, lol”
Is not a statement of fact, but a prediction of bracket creep. Do you disagree that once a tax package is in place that allows for multiple rates, that more than just the “rich” will be impacted? Certainly you know that the GA can do what they want, to whomever they want, once the amendment passes
#2 to “the Pensions must be paid without reform, ever” argument: If we are insisting that a fair tax is about “fairness”, what is wrong with amending the constitution and capping pensions at 100K or 1.5x the state median income, annually? is it “fair” that a 60 year old high School superintendent takes 250K per year in guaranteed and lives in Arizona, while we cant find money for the foster system, or the disabled or elderly RESIDENTS of Illinois?
Comment by Lets be Adults Friday, Feb 7, 20 @ 12:49 pm
The realities are $137B of unfunded pension liabilities plus billions more in unfunded benefit liabilities. A hollowed out state government that underserves the most vulnerable with often times tragic outcomes. A structural budget deficit in a robust economy, certain to get worse with the next recession.
All of this can be fixed with a tax on the 3%, and property taxes can go down? No and no.
I think the real fix will require something more like a real progressive tax structure, with those earning much less than $250,000 paying a higher percentage than the current flat tax. May as well throw some retirement income in there as well. And forget real property tax relief.
I don’t like it, but it’s a lot closer to the truth.
Comment by SSL Friday, Feb 7, 20 @ 12:50 pm
- JSMill -
With great respect toward you as well;
Property tax relief will need to include looking at PTELL, abd how the formula meets 2 goals;
Funding schools at a level needed and recognized as appropriate.
Showing that $30 billion in funding schools is now greater at the state portion.
This is NOT a simple solution. I don’t think it’s even hard, i think it’s arguably the hardest thing this state can and would do.
Paying on pensions is paying a bill, this is changing a whole system, and then some, to meet a constitutional requirement of funding K-12. Huge.
Education is going to cost the state money, and while everyone wants property tax relief, we can’t beef when a Cicero district may get more to equate to an Oswego district.
Either education is a priority for all, or we might as well continue “haves” and “have nots” but the last thing we can endorse is have central state funding and tolerate those “haves” and “have nots”
If that’s the case, keep property taxes as they are and have those disparaging fundings continue.
With great respect.
Comment by Oswego Willy Friday, Feb 7, 20 @ 1:03 pm
=== Is not a statement of fact, but a prediction===
Predict somewhere else.
The likelihood of taxes (snicker-snicker) being raised in the brackets, with political will and a governor willing to sign is 2025;
Passes in 2020
Implemented in 2021, reviewed.
2022, Governor running for re-elect, new map, open seats, no vote to move then.
In 2023, that might be the first time, but ask yourself, in the past 30 years, how many times has the rate gone up?
Take your time.
=== Pensions must be paid without reform, ever” argument: If we are insisting that a fair tax is about “fairness”, what is wrong with amending the constitution and capping pensions at 100K or 1.5x the state median income, annually? is it “fair”===
Show me your 71 and 36
Comment by Oswego Willy Friday, Feb 7, 20 @ 1:08 pm
=Certainly you know that the GA can do what they want, to whomever they want, once the amendment passes=
Actually, they can do what they want with respect to taxes right now to everyone. If they were chomping at the bit to raise taxes there absolutely nothing to prevent it. So this argument that the fair tax is somehow “different” falls flat on its face.
Your comments on pensions work well at the corner bar but have been addressed at length on this blog repeatedly over the years and clearly show a fundamental lack of understanding on the changes that have occurred to our pension laws in recent years.
Comment by Pundent Friday, Feb 7, 20 @ 1:10 pm
Comments by Sue, Captain Obvious, and Pundent are the reason JB will need to do a lot of work to convince many to support the fair tax. It is not wrong to want some fiscal discipline or reform of major programs alongside revenue increases as part of a stabilization program.
Alternatively, those folks will say no anyway, and showing the revenue needs of the next 5 years is going to scare off a lot of potential supporters. You choose.
Comment by JIbba Friday, Feb 7, 20 @ 1:12 pm
I see that my comment might be misinterpreted…I did not mean our specific commenters would oppose the tax, but there are many who “would support” the tax only if (insert phony reason here). Those folks will not be persuaded, so trying to convince them is wasted work.
Comment by Jibba Friday, Feb 7, 20 @ 1:14 pm
==Passes in 2020. Implemented in 2021, reviewed. 2022…==
Inflation kicks in. Everyone gets a tax hike.
Comment by City Zen Friday, Feb 7, 20 @ 1:27 pm
- City Zen -
Earlier I had you down as a yes, LOL
At least you stopped your phony parsing of the 3% argument.
I’ll look forward to the $20-25 million pointing out worries.
Comment by Oswego Willy Friday, Feb 7, 20 @ 1:31 pm
=Those folks will not be persuaded, so trying to convince them is wasted work.=
Those folks also tend to use lazy arguments usually along the lines of “Democrats just want to raise taxes and increase spending.”
Comment by Pundent Friday, Feb 7, 20 @ 1:37 pm
==At least you stopped your phony parsing of the 3% argument.==
The married tax bracket argument? I haven’t stopped.
Comment by City Zen Friday, Feb 7, 20 @ 1:49 pm
But you recognize it’s still… 3% of taxpayers…
That’s not changing with this vote in November.
Comment by Oswego Willy Friday, Feb 7, 20 @ 1:51 pm
How is it “fair” to cap pensions? How is it “fair” for me to be told one thing when I’m 23, then to install a cap when I’m 61? (BTW, not a superintendent, not living in Arizona and not retiring anytime soon).
Capping pensions is changing the rules. Changing the rules is not fair—unless you’ve got a DeLorean to take me back to 1981.
Comment by ajjacksson Friday, Feb 7, 20 @ 2:25 pm
OW - the only thing on the ballot is converting away from a flat tax. Once the amendment passes- the legislature will need to match up tax revenues to a budget. Nothing prevents them from immediately raising taxes on more then the top 3 percent. Pritzker’s proposal in terms of rates isn’t on the ballot whatsoever
Comment by Sue Friday, Feb 7, 20 @ 2:31 pm
=== Nothing prevents them===
Political will.
Pritzker will be gearing up for te-elect.
Pritzker is not signing any tax increase.
Voters are deciding this tax increase, not him.
There won’t be any votes to change the rates until the earliest 2023, more likely 2025
Your ignoring political will is either willfully ignorant or a trolling that you hope scares people who also forget about political will.
Comment by Oswego Willy Friday, Feb 7, 20 @ 2:36 pm
=Nothing prevents them from immediately raising taxes on more then the top 3 percent.=
Nothing prevents them from doing this today, right now, on everyone. I’ll give you the benefit of the doubt and say that they will expand this. Maybe it goes from 3% to 4%. Maybe years from now it impacts 10%. But you’re still arguing on behalf of a very small percentage of tax payers when the only other viable alternative is an increase for everyone. The option is a tax increase for some or a tax increase for all.
Comment by Pundent Friday, Feb 7, 20 @ 2:37 pm
==unless you’ve got a DeLorean to take me back to 1981.==
You have access to a time machine and the first thing you’d do is related to pensions? Think Big.
Comment by City Zen Friday, Feb 7, 20 @ 3:02 pm
= Nothing prevents them from immediately raising taxes on more then the top 3 percent. =
Nothing prevents them from outlawing the use of the letter “J”.
If we want to make dumb arguments based on the infinite possibilities of “if” then lets really dig deep.
Comment by JS Mill Friday, Feb 7, 20 @ 3:07 pm
“Once the amendment passes- the legislature will need to match up tax revenues to a budget”
This is where I wonder whether it is politically good to publicly release detailed estimates of future revenues versus expenditures, say for 5 years. The soft middle who might be persuadable might want to evaluate whether there are constraints on spending and how high the rates might need to go to generate sufficient revenue, given the ramp plus many promises of additional spending (plus other major spending that would be needed to significantly improve the higher ed and property tax situations). The amounts might be so eye popping that it would scare off the middle ground. The alternative is to hide the upcoming dramatic need for revenue increases and allow the opposition to paint unlimited taxing and spending, which would scare off the middle ground. Is it a losing proposition either way?
Comment by Jibba Friday, Feb 7, 20 @ 3:25 pm
Pundant-actually there is another alternative which would allow for more discipline being imposed on our elected officials. Raise the flat tax to 6 percent with additional exemptions for folks on the bottom half of the income ladder. Gets you to the same place without totally changing the tax regime. You folks are all deluding yourselves to believe that down the road the fair tax will be anything but
Comment by Sue Friday, Feb 7, 20 @ 3:28 pm
=== Raise the flat tax to 6 percent===
If the progressive tax fails, it could up to 6 or higher.
That will be the closing argument, or it should be, after telling 97% they won’t see an increase.
It’s too obvious.
Comment by Oswego Willy Friday, Feb 7, 20 @ 3:31 pm
OW - explain how it is if the State needs more revenue for legitimate purposes- why impose that cost on only 3 percent of the populace. Surely it’s not the fault of the 3 percent that the State finds itself in this mess. Frankly it’s the fault of elected officials going back 40 or more years who spent in public programs as if the tax rate was 5 percent when it was only 3 while making up the difference by shorting pension funding while at the same time kept enriching the programs. As someone who already pays in excess of 60 K between real estate and Illinois income taxes/ raising my burden by 60 percent will likely force our move elsewhere
Comment by Sue Friday, Feb 7, 20 @ 3:38 pm
Sue:
If your defense is that it’s not fair to rich people I don’t think you’ll find a lot of people to support your argument. You’re going to have to do better than that if you want to get people to vote against it.
Comment by Demoralized Friday, Feb 7, 20 @ 3:46 pm
===…explain how it is if the State needs more revenue for legitimate purposes- why impose that cost on only 3 percent of the populace.===
Um, - Sue -… the other 97%… they’re *still* paying taxes.
Do you ignore the obvious or you hope I ignore the obvious.
Deciding to sell this as something that *can* bring property tax relief is a silly way to sell it, but…
=== As someone who already pays in excess of 60 K between real estate and Illinois income taxes===
So you want to raise the taxes on those not already paying $60K…
I don’t think you’re struggling if you’re paying $60K a year in taxes.
I can find a whole bunch of folks wishing for that “curse”
Comment by Oswego Willy Friday, Feb 7, 20 @ 3:46 pm
I would do what I could to make sure that Walter Payton scored a touchdown in the Super Bowl, for starters….
Comment by ajjacksson Friday, Feb 7, 20 @ 3:51 pm
PTAX reform must encompass the taxing bodies themselves. No more endless increases in tax rates. No more amassing millions in unspent funds (Cicero scenario); make it law the unspent money above a certain $ amount must be refunded (or next years taxes are zeroed out to keep it simpler). No more assuming real estate only goes up in value.
Comment by revvedup Friday, Feb 7, 20 @ 3:52 pm
=== I remember when Jim Edgar had to raise the state tax. A portion of it was to be split between school districts and municipalities. He said they should then lower their local property taxes. The state tax increase took place, the local property tax rollback did not happen.===
Because property taxes are local. Edger has no control over them. If a town wants a gold plated monorail the property taxes will increase.
Comment by Da Big Bad Wolf Friday, Feb 7, 20 @ 4:11 pm