Illinois Gov. J.B. Pritzker and the Democrat-controlled state legislature have yet to detail their plan to address the state’s $6 billion budget hole after the failure of the progressive income tax amendment and lack of action from Congress to provide additional COVID-19 relief to states.
In late May, lawmakers met for a pandemic special session where they passed a budget that relied on $5 billion in borrowing and more than $1 billion from the progressive income tax if it were to pass. The measure failed last week.
It’s unclear the prospects of attempting an increase to the flat income tax during a possible lame-duck session in January.
The 2011 income tax increase passed during a similar session where lawmakers preparing to exit the legislature at the end of a term, voted to increase income taxes.
The General Assembly is scheduled to come back to session Tuesday for three days, and an additional three days in December. Several sources say that is highly unlikely, some citing continued COVID-19 concerns.
Pritzker said he was disappointed the legislature won't return to Springfield to deal with the state’s finances.
“We’re going to need the General Assembly to step in here,” Pritzker said. “There’s a limited amount the administration can do on its own. We’re going to do all of that.”
Pritzker has said cuts will be needed, but he has been largely silent on the possibility of pushing for tax increases.
Illinois is among 11 states the group Multistate considers at “significant risk” for increased business taxes.
“Illinois voters rejected a progressive individual income tax at the ballot, which many in the state were counting on to make up for declining revenue,” the report said. “Without that revenue, legislators in the state will likely consider new ways to raise taxes. Surprisingly, relatively strong revenue performance kept Illinois out of the highest risk category on our quantitative metrics, but we consider it “highest risk” from a qualitative perspective.”
In promoting the income tax change in September, Lt. Gov. Juliana Stratton said of the measure failed, it would mean higher income taxes for everyone.
“Lawmakers will be forced to consider raising income taxes on all Illinois residents by at least 20 percent,” Stratton said.
A week after the progressive income tax failure, state Rep. Mike Zalewski, D-Riverside, couldn’t say what the prospects are for that discussion. He said there are still unknowns, like if the federal government will provide aid to states like Illinois.
“I don’t know that we’re in a position to simply say ‘we’re only going to have a conversation about raising taxes, we’re only going to have a conversation about cuts’,” Zalewski said.
State Rep. Avery Bourne, R-Raymond, said even if an income tax increase were floated, it may sink.
“I’m not sure that Speaker [Michael] Madigan has the political capital to be reelected as speaker, much less pass an income tax,” Bourne said. “And I think the voters were very clear on Tuesday [Nov. 3] that they are sick and tired of tax increases, specifically income tax increases, being the only answer that House Democrats and the governor have to get us out of our fiscal mess.”
Madigan has been implicated in a bribery scheme involving ComEd, but he has not been charged with a crime. Madigan has denied wrongdoing. Pritzker said Madigan's said opponents of the progressive income tax use Madigan's connections to the scandal to taint the tax issue with concerns over corruption in state government.
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