With Illinois facing a nearly $4 billion dollar budget shortfall this year, some are fearful of a possible state income tax increase in the near future, possibly while lawmakers conduct business in Springfield this week.
The support for raising the state income tax comes after voters rejected the graduated income tax amendment in November’s election. Gov. J.B. Pritzker said the change in tax code would have raised an estimated $3 billion a year in revenue, so now what?
Last September, Illinois Lt. Gov. Juliana Stratton warned of a 20 percent across-the-board income tax hike if voters didn’t approve the progressive tax amendment in November.
“To adequately address the budget crisis under our current tax system, lawmakers will be forced to consider raising income taxes for all Illinois residents by at least 20 percent,” Stratton said.
Brian Costin, state director of Americans for Prosperity, said now is a terrible time to raise taxes.
“Tax hikes are not working. It is not turning around the economy of Illinois, it is making it worse,” Costin said. “People are making huge sacrifices during the COVID-19 pandemic. They shouldn’t be asking for more money from the taxpayers during this very difficult time.”
The last tax hike was just over 3 years ago. On July 6, 2017, the Illinois General Assembly voted to override then-Gov. Bruce Rauner’s veto of a record-setting income tax hike. Personal income tax rates rose 32% to 4.95%, while corporate income taxes rose 33% to 7%.
Democratic Rep. Lashawn Ford would support an income tax hike only if Republicans were on board.
“It has to be bipartisan because we have to make sure that we are fair about the taxes and have input from Republicans as well as Democrats as it relates to spending of the revenue,” Ford said.
Pritzker’s office has asked state agencies to prepare for the possibility of budget cuts reaching up to 10 percent by fiscal year 2022. He has already announced over $711 million in cuts for this fiscal year, but details of those cuts remain unclear.
Costin is keeping an eye on the proceedings in Springfield during the General Assembly session.
“It is quite clear that the legislature is not willing to reform government spending, so we are very fearful that they will try to raise taxes,” he said.
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