By JERRY NOWICKI
Capitol News Illinois
Jnowicki@capitolnewsillinois.com
SPRINGFIELD – Republican members of the Illinois House reaffirmed their opposition to Gov. J.B. Pritzker’s graduated tax proposal Tuesday, calling it a “blank check” to lawmakers and citing “empty promises” from Democrats in previous General Assemblies.
Representative Mark Batinick, a Plainfield Republican, read from statements made by state Senate President John Cullerton (D-Chicago), House Majority Leader Greg Harris (D-Chicago) and other Democrats from years past which said previous tax hikes would balance the state’s structural deficit, help pay down the state’s bill backlog and pension debt, raise credit ratings and more.
Batinick said none of those claims have become reality.
“Our Democratic colleagues love to make promises that if it's just ‘raise this tax or that tax, our problems will be solved,’” Batinick said. “But in reality, it just gives them more money to spend without actually fixing what got us here in the first place.”
Batinick brought up two votes to raise the income tax: one which took place in 2011 and raised the flat tax rate to 5 percent temporarily for four years, and one which passed in 2017 with bipartisan support, raising the rate to 4.95 percent after it reverted to 3.75 percent upon expiration of the temporary tax.
According to an Illinois Comptroller report, when the temporary tax was passed in 2011, the bill backlog was $7.4 billion. When it expired in 2015, the backlog was $5 billion. During the two years between the 2015 expiration of the temporary hike and the 2017 permanent increase, the backlog tripled to $15 billion. As of Tuesday, the comptroller’s website shows the backlog at $7.8 billion.
Democrats said last week if a graduated tax amendment failed to pass, the state’s other two options for balancing the budget are 15 percent cuts across the board or an increase to the flat tax for every Illinoisan from 4.95 percent to 6.95 percent.
Batinick said he did not know if Democrats, who hold the governor’s office and supermajorities in each chamber, would prioritize raising the flat tax rate should the graduated tax fail.
And when asked Tuesday to name three cuts to state government that Republicans would support, Rep. Jeff Keicher, a Sycamore Republican, said the conversation has to “go beyond cuts.”
He cited former Indiana Gov. Mitch Daniels’ handling of his state’s agency expenditures in a “programmatic approach of looking at each agency on a scale of individualized metrics so that they could not only refine what they do in alignment with the mission created for them, but that they could do it in a more effective and efficient manner.”
The group mentioned a bill from state Rep. Steve Reick, a Woodstock Republican, which would create private-sector commission mirroring Daniels’ approach to examine the spending habits and management practices of state agencies.
That commission would give recommendations to lawmakers to spend more efficiently, but would be a 501(c)4 organization which would not have to release any information about its donors. The bill remains in committee.
Other specific reform legislation mentioned Tuesday includes a Batinick bill to consolidate pensions, and legislation from Rep. C.D. Davidsmeyer (R-Jacksonville), who has a bill to create a discretionary spending freeze for fiscal years 2020 and 2021. The group also touted workman’s compensation reforms and said Illinois needs to work on making it easier to do business in the state.
Batinick said he believed his party, which holds 44 of the 118 Illinois House seats, could solve the state’s multibillion-dollar structural budget deficit through a series of reforms if “given the keys to pass what we need done,” but as it stands now, he said, Democrats will have to play a bigger role.
A graduated tax constitutional amendment would require three-fifths approval from each house to be put on the November 2020 presidential ballot, and Illinois voters would have the final say.
Per Pritzker’s plan, the rate would be a flat 7.95 percent for those making more than $1 million in income, while earners in five other brackets would see margins of income taxed from 4.75 to 7.85 percent. Illinoisans earning $250,000 or less – approximately 97 percent of the state – would see their rates lowered modestly under the plan, Pritzker’s office claims.
Pritzker claims this would raise $3.4 billion in new revenue, $2.7 billion of which will be paid by approximately 20,000 Illinoisans whose income exceeds $1 million, although a study by the Project for Middle Class Renewal and the Illinois Economic Policy Institute estimated added revenues at $3.12 billion, according to the Associated Press.
But Republicans say voters would be allowing only a graduated tax structure, not approving the rates touted by Pritzker, and revenue resulting from a graduated tax would not be realized for another two years.
Batinick said Illinois needs solutions now, not a tax plan that would “make it easier” for Democrats to “engage in class warfare” by allowing them to raise rates on a smaller percentage of wealthier taxpayers.
The peer-reviewed PMCR and IEPI study, on the other hand, said Pritzker’s plan could narrow growing income disparity, cut property tax bills by up to 10 percent and help cut the state’s deficits.