Andrew Nelms, the state director of Americans for Prosperity, a nonprofit group that studies Illinois issues, said during a town hall meeting Saturday that Illinois ought to be one of the most prosperous states in the nation.
However, in part due to bad public policy, the state has had the highest or second-highest outmigration since 2013, Nelms said. Illinois also faces billions in unpaid bills and more than $130 billion in unfunded pension liabilities.
Nelms – along with state Reps. Allen Skillicorn, R-East Dundee, Steve Reick, R-Woodstock, Tom Weber, R-Lake Villa, and Dan Ugaste, R-Geneva – met at Lake in the Hills Village Hall to advise residents that Gov. J.B. Pritzker’s graduated income tax proposal is not a cure-all for Illinois’ problems.
Under Illinois’ current flat tax system, all residents are taxed at 4.95%. But under the tax brackets of Pritzker’s graduated income tax plan, rates would range from 4.75% for those making $10,000 or less a year to 7.95% for those making more than $1 million a year.
Nelms said the opposition to this proposal is bipartisan. Not only does the House GOP opposed the plan, but former state Rep. Jerry Costello, a democrat, also is against it, he said.
“If Springfield politicians were to be given more tax power, taxpayers would face more uncertainty,” Nelms said.
Nelms also said the plan does nothing to ease the burden of the state’s property taxes, which are among the highest in the nation.
Pritzker estimates his proposal will generate $3.4 billion in new revenue, but that growth won’t be anywhere near the same level as the growth of the state’s pension obligations, Reick said. Even if all of the new revenue from Pritzker’s graduated tax plan goes toward pensions, it will never be enough to catch up with the mounting debt.
Reick added that the pension liability is the one thing that could break the state of Illinois completely.
Skillicorn said the state’s temporary income tax hike in 2011 came with no reforms, the permanent tax hike in 2017 came with no reforms and now the constitutional amendment establishing a graduated income tax is coming with no reforms.
“In spite of the tax hikes, our debt is higher than ever,” Skillicorn had said in a news release. “Rather than taking steps to control spending and grow our economy, Illinois Democrats just want to keep raising taxes on Illinois families.”
For a constitutional amendment establishing the graduated income tax plan to appear on the November 2020 general election ballot, both legislative chambers must approve the measure by a supermajority, or three-fifths vote.
Both chambers also must approved the tax rates, which would require a simple majority.
At the end of his presentation, Nelms said the question attendants need to ask themselves is whether they believe Illinois politicians possess the fiscal discipline necessary to impose a graduate income tax that could provide sustained tax relief for middle class families.
“I think it would be myopic to support a tax proposal allowing the Legislature to issue a blank check,” Nelms said.
During a Q-and-A portion after the presentation, representatives were asked what can be done to turn Illinois around.
Ugaste suggested changing the compound interest rate for pensions. Skillicorn also proposed a constitutional amendment for pensions.
Weber said the state spending should be thoroughly examined to weed out wasteful expenditures. Reick also wanted to look into agency operations to determine where money could be saved.
Reick added that he and his fellow representatives can’t help but sound pessimistic over the state’s many flaws, but each lawmakers goes down to Springfield with optimism. The key thing the public can do, however, is talk with one another about Illinois issues, and if there is a bill they feel strongly about, visit www.ilga.gov and fill out a witness slip.