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* Some background…
A 3% tax on individual income over $1 million would flood Illinois’ coffers with at least $4.5 billion in new revenues annually, a new state estimate shows weeks ahead of an advisory referendum on earmarking that money for property tax relief.
The estimate, obtained by WBEZ through a state open-records request, marks the first time Gov. JB Pritzker’s Revenue Department has weighed in on the effects of imposing that new proposed tax on the state’s wealthiest citizens to ease what is a leading financial issue daunting the middle class.
Voters are being asked this question now because lawmakers in May voted to bring it forward as part of a broader election package Pritzker signed.
The exact wording of the ballot question reads: “Should the Illinois Constitution be amended to create an additional 3% tax on income greater than $1,000,000 for the purpose of dedicating funds raised to property tax relief?”
The phrase “property tax relief” is not defined.
* Former Gov. Pat Quinn is a big proponent of the advisory referendum, and he has an idea on implementation, if it eventually comes to a constitutional amendment vote…
There’s actually a law that the state has called the Property Tax Relief Fund. It’s never been funded until hopefully now, but that says that every year, the comptroller of our state will determine how many homeowners there are in Illinois and send them a rebate on their property taxes every year mandated. So it seems to me, this is the best way, without bureaucracy and without any any complication, to get money back into the pockets of people who live from paycheck to paycheck and who want a fair system.
From that law…
As soon as possible after receiving certifications from each county under this subsection, the State Comptroller shall calculate a property tax rebate amount for the applicable property tax year by dividing the total amount appropriated from the Illinois Property Tax Relief Fund for the purpose of making rebates under this Section by the total number of homestead exemptions granted for homestead property in the State. The county treasurer shall reduce each property tax bill for homestead property by the property tax rebate amount and shall include a separate line item on each property tax bill stating the property tax rebate amount from the Illinois Property Tax Relief Fund. Within 60 days after calculating the property tax rebate amount, the State Comptroller shall make distributions from the Illinois Property Tax Relief Fund to each county. The amount allocated to each county shall be the property tax rebate amount multiplied by the number of general homestead exemptions granted in the county for the applicable property tax year. The county treasurer shall distribute each taxing district’s share of property tax collections and distributions from the Illinois Property Tax Relief Fund to those taxing districts as provided by law.
* Gov. Pritzker has not yet said whether he’ll be voting for the proposal. He was asked about his thoughts yesterday…
I believe in a graduated income tax. That’s what most states have, by the way, the vast majority of states have a graduated income tax system. It works well for them. You know, I think about, you know, a state like Minnesota, where it’s been very beneficial, as well as many others. So, that is the preferred method, in my view, of how to, you know, organize your tax system. But I know that this is a ballot question that legislators put on the ballot and allowed people to vote on. I think we all believe in lowering property taxes in the state of Illinois. So I can see that it might be one that is popular among people, but, you know, but as far as I’m concerned, the graduated income tax is the way to go.
Lots of words.
posted by Rich Miller
Tuesday, Oct 1, 24 @ 12:33 pm
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=The county treasurer shall distribute each taxing district’s share of property tax collections and distributions from the Illinois Property Tax Relief Fund to those taxing districts as provided by law.=
I am a hard no on this proposal. Pay the money back to the individual taxpayer and I would be a yes.
If this were to pass ever (full suspension of disbelief required), the state would find a way to reduce the amount of money back to taxing bodies. Our school district is heavily reliant on local revenue (82% of our revenue last year) it is the only thing that protects us from state fiscal instability. This is a way for the state to get their hands on local money and, even with JB as governor, I don’t trust them.
Comment by JS Mill Tuesday, Oct 1, 24 @ 12:49 pm
With the Property Tax Relief Fund what Former Gov. Quinn is advocating for is all homestead property receiving relief. Simple way of distributing relief but it’s odd Quinn would be advocating that billionaires like Gov Pritzker recieve the same relief check as the widowed little old lady on a fixed income.
Comment by Nagidam Tuesday, Oct 1, 24 @ 12:50 pm
=== Pay the money back to the individual taxpayer and I would be a yes.===
Homestead property owners are getting the direct relief on the front end as a deduction to their tax bill. Once the comptroller sends back the money to the county, the county treasurer must then distribute it to the appropriate taking bodies.
Comment by Nagidam Tuesday, Oct 1, 24 @ 12:53 pm
I agree with JB that a graduated income tax is best. That said this would be a first step. If the government can prove it is responsible to lives up to the commitment that money will be solely dedicated to property tax relief then it may build the trust to get the amendment on income tax reintroduced.
Comment by illinifan Tuesday, Oct 1, 24 @ 1:00 pm
We had a simple property tax relief measure –it was 5% income tax credit for all homeowners and then the Dems took that away from those paying the highest income and property taxes. Let’s just drive all the wealthy out of the state and see what’s left.
Comment by anon Tuesday, Oct 1, 24 @ 1:02 pm
=Lots of words=
If Quinn was still governor his response to a similar question would have filled an entire book.
Comment by NonAFSCMEStateEmployeeFromChatham Tuesday, Oct 1, 24 @ 1:09 pm
I am all for it and expect it will work just as well as the lottery funding schools and just as well as the tolls worked funding highways before they were all eliminated
Comment by DuPage Saint Tuesday, Oct 1, 24 @ 1:24 pm
Not sure how they came up with $4.5B? At 3% over $1, that would be $150B in income tax. Serious question - I must be missing something?
Comment by I do not get the numbers Tuesday, Oct 1, 24 @ 1:31 pm
“… will determine how many homeowners … .”
Renters? And, remember, in 1985 with the federal tax reform Reagan & the National GOP admitted property taxes on rental property is paid by the renter, not the owner / landlord. Quinn doesn’t have the discipline to make sure renters got $. [Sarcasm font on] Unless, of course, he brought to this issue the discipline and drive he used in matters related to patronage …
Comment by Anyone Remember Tuesday, Oct 1, 24 @ 1:32 pm
===Not sure how they===
Click the link…
“State Revenue Department estimates show for the 2021 tax year, the most recent year available, there were 77,323 Illinoisans who reported having adjusted gross income greater than $1 million annually.”
Comment by Rich Miller Tuesday, Oct 1, 24 @ 1:36 pm
Governors Quinn and Pritzker are both right on.
This advisory referendum *and* a graduated income tax are no-brainers, and they’re not mutually exclusive.
Hard to imagine this referendum not winning a strong majority in November.
Comment by Gordon Geico Tuesday, Oct 1, 24 @ 2:20 pm
==the vast majority of states have a graduated income tax system. It works well for them. ==
Every state with a graduated income tax system taxes retirement income.
It works well for them.
Comment by City Zen Tuesday, Oct 1, 24 @ 2:32 pm
===It works well for them. ===
Find a sponsor.
Comment by Rich Miller Tuesday, Oct 1, 24 @ 2:53 pm
Many thousands if not a million or more Illinoisans are paying a higher state income tax today because they judo-flipped themselves with their baseless fears on the Fair Tax, like retirement income will be taxed. It’s karmically funny that many non-wealthy Illinoisans who hate higher taxes are paying a higher state income tax because of themselves.
Comment by Grandson of Man Tuesday, Oct 1, 24 @ 3:37 pm
==Find a sponsor.==
I know but Pritzker is commenting on what works well in Minnesota and it’s not an accurate comp. If MN removed retirement income from taxation (a bill was introduced years ago to do just that and was squashed) it would blow a $2 billion hole in their state budget.
Comment by City Zen Tuesday, Oct 1, 24 @ 3:49 pm
===I know but===
You’ve repeatedly advocated for it here. So do something about it.
Comment by Rich Miller Tuesday, Oct 1, 24 @ 3:53 pm
If we were creating IL state tax policy from scratch today we’d almost certainly have a progressive income tax and we might well in some ways mirror other states around taxation of retirement income. But as we found out with the fair tax vote in 2020 that when it comes to taxes - a third rail topic for most voters - it is a lot easier to create good policy in the absence of any policy than it is to change bad policy to good.
Comment by Unfortunate box Tuesday, Oct 1, 24 @ 3:56 pm