For those who haven’t read The Hobbit, the hero Bilbo Baggins utters these words when he is at a proverbial crossroads. Bilbo figured that a third dangerous choice would be the last thing he needed to do to secure his share of “treasure.” It wasn’t.
Working families deserve common sense solutions from our General Assembly. They deserve to know that Springfield is doing everything in its power to make good choices, and it’s fair to ask Springfield to avoid taking a dangerous course without doing everything it can to protect Illinois families. Will the third income tax increase in a decade “pay for all?”
Now, we’ve been told we need tax revenue to balance our budget. I believe balanced budgets are important, though Illinois hasn’t had one in almost 17 years. Balanced budgets help improve the economy and grow jobs. The question is do we have a revenue problem, or a spending problem?
It’s hard to imagine how Illinois doesn’t have a revenue problem. We rank second in the United States for people leaving our state for “greener pastures.” I can’t imagine that the 313 people leaving Illinois each day didn’t pay income taxes, sales taxes, gasoline taxes, or contribute to property taxes. In fact, I’m convinced that the tax burden was part of the reason why many of these people left!
The thing is, Springfield has raised our taxes before. The first tax increase was passed during a midnight session on a cold December night in 2011. That tax was “temporary” and we were promised it would solve our pension and our bill backlog problems. It didn’t.
Springfield raised our income taxes again in 2017, promising that the tax would reduce our bill backlog, fulfill our unfunded pension obligations, and balance our budget. It didn’t. After billions of dollars in new income taxes Springfield and the Chicago Machine have repeatedly had to borrow more money to pay bills and fund pensions.
I agree with President Ronald Reagan’s words, “The problem is not that people are taxed too little. The problem is that government spends too much.” Illinois’ spending is proof. Springfield has grown spending by 63.2% in the past 15 years, almost double the rate of inflation!
It’s true. I have never voted for a tax increase. I don’t think raising taxes is the best way to balance the budget or generate revenue long term, and working families in Illinois already have the highest overall tax burden in the country. Like President Reagan, my solution can be summed up, “Balancing the budget is like protecting your virtue. You have to learn when to say no.”
Governor Pritzker’s solution is different. It isn’t cutting government spending. It’s hiking income taxes. He proposes a “fair” tax, and challenges opponents to come up with alternatives that meet all of our state’s obligations. I think that’s jumping the gun. There are three things that the Governor needs to do before anyone should be obligated to offer alternatives to his proposed tax increases, much less vote for the progressive tax amendment.
First, the Governor has to prove the tax will generate the money he says it will. He projects the progressive tax rates he proposed will generate $3.4 billion in new tax revenue, without explaining how. I’m going to ignore the fact that his proposed tax cannot be collected until a constitutional amendment is put on the ballot for Illinois voters in 2020, and likely won’t be collected until 2021. We need to know how he arrived at $3.4 billion in new tax revenue because, all other things being equal, the best estimate is that his proposed tax rates will generate only $2.4 billion.
However, changing the income tax influences how some people spend their money. It even changes how others spend their time. When we consider how the proposed tax rates will change behavior, the best estimate is $1.4 billion in new revenue. Working families need to know why the Governor thinks his proposed rates will generate one to two billion dollars more than the best estimates that are available. We have been misled before but instead of cutting spending Springfield has responded by raising our income taxes. Enough is enough.
Second, the Governor needs to guarantee that income taxes will not increase for working families. I’m going to ignore the fact that working families will still pay at least 27% more than they did in 2017. Thankfully, there’s an easy way to make sure he keeps his promise that 90% of taxpayers in Illinois will not have their income taxes hiked. All he needs to do is make sure his constitutional amendment for a progressive tax also freezes the tax rates for the lowest brackets. I can tell you that if any amendment comes to the Senate floor without freezing tax rates, I’m voting no. If it passes out of the General Assembly and is on my ballot in 2020, I’m voting no again.
Third, the Governor needs to guarantee that the new revenue will pay for what he’s promising. The way to do that is to make sure the proposed constitutional amendment states that all the additional revenue generated from the progressive tax is dedicated to paying off our unpaid bills and meeting our current unfunded pension liabilities.
These are three simple, common sense solutions to protect working families from higher taxes and to make sure that the money is spent the right way. Without them, there is no reason for us to believe that this third income tax increase will “pay for all.”
I will have more to say about progressive taxes as the proposal unfolds. Next week we will discuss the most recent Springfield outrages and common sense actions we can take to respond.
If you have any additional thoughts or ideas, you can visit my website at www.senatorstewart.com and use the form to send me an e-mail.