FILE – In this March 7, 2019, file photo, Gov. J.B. Pritzker outlines his plan to replace Illinois’ flat-rate income tax with a graduated structure at the State Capitol in Springfield, Ill. (AP Photo/John O’Connor File)
SPRINGFIELD, Ill. (AP) — Illinois Gov. J.B. Pritzker said Wednesday that coming budget “pain endured by working families” can be laid at the feet of Republicans and special interests who told lies about the impact of switching to a graduated income tax system in an amendment voters rejected Tuesday.
“There will be cuts, and they will be painful,” said Pritzker during his daily COVID-19 briefing in Chicago.
“Whatever happens here, the pain that is endured by the people of Illinois, by the working families of Illinois is on the Republicans and the special interests and the billionaires. They’ve got to step forward and help,” he added.
He wouldn’t commit to any alternative, but he has not ruled out a general tax increase or other actions aside from spending cuts.
The Illinois Constitution requires that all income be taxed at a flat rate — currently 4.95%. Pritzker campaigned to amend the 1970 charter to allow a progressive rate. He contended that anyone making less than $250,000 — 97% of taxpayers — would pay the current rate or less. Those with incomes over $250,000 would pay higher incremental rates, topping out at 7.99%.
Dubbed the “fair tax” by Pritzker and supporters, it was to generate an extra $3 billion a year to help pay down an $8.3 billion backlog in past-due bills, fill revenue gaps in the state budget that lawmakers had hoped federal pandemic relief would fill, and billions of dollars more in debt.
Both sides of the debate invested heavily in their positions, spending a combined $100 million on advertising. Opponents contended that Pritzker and fellow Democrats who control the General Assembly would not use the extra revenue to pay debts but instead for new and expanded programs. As for the wealthy, forced to pay more, they would emigrate from Illinois, they said, leaving the middle class to pay a greater share.
“Voters sent a clear message that it is time for Illinois policy makers to stop raising taxes on families and businesses and start getting serious about policy reforms that will help spur long term economic growth,” Mark Denzler, president & CEO of the Illinois Manufacturers’ Association, said in a statement.
Pritzker claimed that opponents “lied about what would happen if it passed, and they left all of the working people of Illinois holding the bag.”
“If you set aside federally protected programs, court-ordered obligations and our bond and pension debt, we would have to reduce discretionary spending in our state by approximately 15%,” Pritzker said. “That’s 15% fewer state troopers. That’s 15% fewer students going to college, 15% fewer working parents receiving child care assistance, and 15% less money for your local public schools, which likely means that your property taxes will increase.”
