Editor’s note: In this series, the Tribune Editorial Board offers its closing arguments against a proposed constitutional amendment that would replace Illinois’ flat-rate income tax with a graduated rate.
If Illinois were a seriously ill patient, even a medieval doctor from the old eye-of-newt school of medicine could see the problem at a glance:
A lack of political will needed to survive as the patient keeps spilling its life blood, its residents, year after year, in a rush out of state for economic opportunities and lower taxes. It’s a phenomenon, or medical condition if you like, we call the Illinois Exodus.
Yet rather than nourish the struggling patient, its 21st century physicians — Gov. J.B. Pritzker, House Speaker Michael Madigan and the Democrats who control the House and Senate — seem intent on applying more leeches rather than committing to full surgery. The big hungry leech in question is Pritzker’s “fair tax” referendum on the Nov. 3 ballot, which for now is being sold as a tax on only on the wealthy — though if it passes, most taxpayers who grew up in Illinois realize that it eventually will hit the middle class.
Taxpayers are realistic
Most taxpayers of Illinois are realistic. They understand taxes are the necessary component to keeping government services functioning. They want well-funded schools, thriving libraries and parks with the grass mowed and the playgrounds tidy. Taxpayers know they are the beneficiaries of their tax commitments.
They really don’t want to leave their homes, their neighbors, their families, their state.
But what they don’t see, what they don’t receive from the political physicians, Drs. Pritzker and Madigan, is any signal that the state will make the structural changes necessary, to apply the scalpel or even a splint, to repair what’s broken. Without any of this, the patient can’t be expected to get up out of bed.
“Fair taxation” would include change on their end that would be fair to everyone: a long-debated workers’ compensation overhaul that would encourage businesses and jobs to stay in Illinois; an amendment on pensions, a new pension tier for new workers that resembles more of a 401(k), or an end to the General Assembly pension fund for part-time lawmakers; a property tax freeze and government consolidation; and spending cuts in the state budget. That would be a start on “fairness.”
Bring back the Grand Bargain
Many of these proposals were part of a “grand bargain” the Senate, in bipartisan negotiations, tried to accomplish in 2017. Gov. Bruce Rauner was blamed for blowing up those talks, which were led by former Senate President John Cullerton and Republican Leader Christine Radogno. Why not resume them in some fashion now?
Instead, lawmakers and the governor talk only of the need for more revenue, more money, more taxation, whether it comes from income, sales, casinos, marijuana, alcohol, property, whatever.
This is why taxpayers rebel — not because of taxation alone but because of failure to tax fairly, to offer relief to them through structural changes in state government. But there is no political will.
Other states that attract Illinois residents apparently have the will, such as Indiana with a long record of balanced budgets, bills paid on time, a limit on what local government can charge in property taxes and a healthy pension system.
“When we first started thinking about leaving Illinois, we talked to (Illinois) state officials, but all we got was soft rhetoric,” said Andy Gross, CEO of Alliance Steel, which relocated from Illinois to Indiana. “They had no bullets in their gun. There was nobody aggressively trying to keep us in Illinois. It was just soft talk.”
Vincent Flaska moved his company, Hoist Lifttruck, from Illinois to East Chicago two years ago. He brought with him 500 new jobs and millions in new investments. His business was purchased by Toyota Industries North America. In Illinois, Flaska said his workers’ compensation insurance was between $2 million and $3 million a year. In Indiana, the same coverage costs him $250,000.
When ‘fair’ isn’t fair
As Pritzker pushes his “fair tax” plan, as we hurtle toward November, voters need to keep all of this in context. There is nothing “fair” about blaming and punishing wealthy people, and eventually the middle class, for the dismal management of this state’s budget. That’s what is on the ballot.
And until taxpayers are offered real structural change in return, they should tell Springfield “no.” Sending more money to state government, no matter who it comes from, will not fix the sick patient.
Editorials reflect the opinion of the Chicago Tribune Editorial Board.
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