Gov. Pritzker Proposes a $3.4 Billion Tax Hike on Illinois Families and Businesses
Last Thursday, Governor JB Pritzker finally unveiled his plan for a graduated income tax in Illinois. Pritzker’s proposed rates would result in a $3.4 billion tax hike on Illinois families and businesses.
Prior to the announcement of the proposed graduated income tax rates, I joined members of the House Republican Leadership Team at a press conference where we announced our unanimous opposition to a graduated income tax structure. Click here to watch my comments at the press conference.
The Governor’s proposal would move Illinois from a flat income tax rate of 4.95% to a graduated income tax with six tax brackets. Families and small businesses with income between $250,000-$500,000 would pay a state tax rate of 7.75%, while the highest rate of 7.95% would apply to all income over $1,000,000. As many small business owners file their tax returns as individuals, Pritzker’s tax hike would hit Illinois small businesses especially hard. In 2017, small businesses were responsible for 70% of Illinois’ jobs.
Illinois’ corporate income tax rate would rise from 7% to 7.95%. Coupled with Illinois’ Personal Property Replacement Tax of 2.5% on corporations (1.5% on partnerships, trusts, and S-corps), corporate income taxes would rise from the current 9.5% to 10.45%, one of the highest tax rates in the nation.
If approved by a three-fifths majority of the House and Senate, a question of whether the Illinois Constitution should be amended to allow for a graduated income tax would be placed before all Illinois voters. It is important to note that the Governor’s proposed rates would not be enshrined in the Constitutional Amendment. For taxpayers, this means that if and when the flat tax guarantee is removed from the Constitution, lawmakers will have a great deal more flexibility to raise tax rates to fund new spending.
Upon learning the proposed rates, several Illinois business leaders spoke out against Gov. Pritzker’s tax hike that will drive families and jobs out of the state:
Mark Denzler, President and CEO of the Illinois Manufacturers’ Association: “Today’s massive tax hike proposal will further harm the state’s manufacturing sector, which has already lost more than 300,000 jobs since the turn of the century. Illinois cannot afford to lose more of these good, high-paying middle-class jobs. Taxing and spending are not the answer to our daunting challenges. The governor’s plan will vault Illinois to the 3rd highest corporate tax rate and 8th highest individual tax rate in the United States. Given that we already face the highest property taxes in the nation, the most glaring part of today’s announcement is what is not included: there is no mention of property tax relief for job creators or curtailed government spending.”
Illinois Chamber of Commerce President and CEO Todd Maisch: “The Illinois Chamber realizes that Governor Pritzker has inherited real and serious fiscal problems. Unfortunately, his plan for a new tax increase is very unlikely to solve them. Taxing businesses and business owners without restraining state spending nor taking measures that will spur economic growth sends exactly the wrong message to job creators who are already questioning their commitment to Illinois. When they choose to move investment across state lines, government loses tax revenue and our communities take a hit. It is important to note that the increase on the ‘2.7 percent’ of taxpayers the governor is targeting will pay much more than the $3.4 billion net income the plan claims it will generate. They will also pay for the ‘tax relief’ afforded to other taxpayers. Clearly, this plan will trigger a serious reaction from employers, especially since the plan only addresses the perceived budget deficit and does not make any meaningful dent in Illinois’ backlog of unpaid bills nor the future spending demands of progressive members of the governor’s party. The plan should be viewed for what it is: merely a first installment.”
National Federation of Independent Business Illinois State Director Mark Grant: said if Pritzker’s plan were to go through, he would expect small businesses to pack up and take their jobs with them. “And then what happens is the people left behind are stuck with new bills and then all the pension costs we have.”
Warrenville Mobile Office Hours a Success
COGFA Reports on FY19 Revenue Trends
Wehrli Signs On as Chief Co-Sponsor of Clean Energy Jobs Act
The legislation, filed as SB 2132 in the Senate and HB 3624 in the House, was written based on information gathered from a clean energy listening tour, which included 60 meetings across the state. The bills target four primary goals:
These are lofty goals, but they are necessary if we want to protect the air we breathe and the quality of the environment for future generations. By embracing clean energy technologies like wind, solar and other renewables, we are taking bold steps to ensure our children and grandchildren enjoy a healthier future.
Illinois Treasurer’s Office Continues to Return Unclaimed Property to Illinoisans
Common types of unclaimed property include: checking and savings accounts, uncashed wage and payroll checks, uncashed stock dividends and stock certificates, insurance payments, utility deposits, customer deposits, accounts payable, credit balances, refund checks, money orders, traveler’s checks, mineral proceeds, court deposits, uncashed death benefit checks and life insurance proceeds.
Property is returned to its rightful owner at no cost when proper identification is provided.
Wehrli to Host Environmental Town Hall Meeting on April 13 in Naperville
Later in the month, on Wednesday, April 24, I will be hosting a general topics Town Hall Meeting at the Naperville City Hall from 7:00 PM until 8:30 PM. I have the council chambers reserved, and after I provide a brief Springfield update, I will take questions from the audience. I hope you will come out for this informational meeting. I look forward to your questions!
Naperville Tops New Best of the Best Lists
Illinois Economy Producing New Jobs in Service-Intensive Sectors
Other Illinois economic sectors display much better numbers, but fields such as “professional and business services” (148,800 new jobs created in Illinois since 2010) tend to be areas of professional education where jobs are concentrated in the greater Chicago area. Furthermore, other areas of Illinois net job creation tend to be fields where employers demand specialized experience and educational training. This is particularly significant with respect to new jobs in “education and health services” (98,200 new jobs created in Illinois since 2010), as hospitals and health clinics want people with educational credentials. One major sector, “leisure and hospitality” (103,300 new jobs created in Illinois since 2010) is creating new non-credentialed jobs across Illinois. However, these are lower-paying jobs than the manufacturing jobs that have been lost.
Illinois Scraps Controversial PARCC Testing in Schools
While PARCC professionals had invested large quantities of work to generate a statistically valid test experience, and large amounts of data were collected, the test generated a great deal of concern from Illinois teachers and parents. PARCC tests took over, and siloed away from teaching, large segments of teacher-student time. Teachers had to reallocate classroom time to prepare for and administer the test. The PARCC test results were calibrated so as to make it look like many Illinois students were enrolled in failing classrooms. PARCC assessment professionals did not want Illinois teachers and educators to become complacent about their performance, so they calibrated the test and its results to demand very high standards from grade-school students. As a result of this decision, few students, schools, and school districts could perform adequately on the PARCC grade scale.
The PARCC test came to be widely disliked and the Illinois State Board of Education (ISBE) announced in late 2018 their intention to move away from this exam. Last week the ISBE announced its switch to a new standardized test, the Illinois Assessment of Readiness (IAR), for the student age groups previously targeted by PARCC. The IAR is approximately two-thirds of the length of the PARCC test and requires less time to administer to students. The ISBE announcement was made on Tuesday, March 5.