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Illinois Gov. J.B. Pritzker warns of 15% cuts in spending because of ‘fair tax’ failure

Belleville News Democrat

Thursday, November 5, 2020  |  Article  |  By Kelsey Landis

Budget--State (8) , Business (10) , Governor (44) , Taxes, Graduated/Progressive

After supporters of the graduated income tax amendment admitted defeat Wednesday, Gov. J.B. Pritzker warned of severe budget cuts and other measures to make up for a looming budget deficit.

“There will be cuts and they will be painful,” Pritzker said during a news conference in Chicago, “and the worst thing is the same billionaires who lied to you about the fair tax are more than happy to hurt our public schools and diminish our state, maybe because they think it won’t hurt them.”

With all but 2% of precincts reporting, 55% of voters had rejected the ballot and the Associated Press called the race in favor of opponents. Though roughly 500,000 outstanding vote-by-mail ballots had yet to be counted in Illinois, it would not be enough to overcome the margin, Capitol News Illinois reported.

Replacing the state’s flat-rate income tax system with a graduated tax structure was a signature policy in Pritzker’s campaign. It would have implemented a higher tax on Illinoisans who earn more than $250,000 a year, but voters rejected the amendment after the opposition argued it would result in increased taxes on the middle class.

The change would have generated an estimated $3 billion a year, and would have helped make up for lost revenue caused by the COVID-19 pandemic. Without the prospect of extra money from the top 3% of earners in Illinois, Pritzker said the state will have to turn to budget cuts, income tax increases or both.

To make up for a budget shortfall Pritzker has estimated at $7 billion, agencies statewide would have to cut at least 15% in discretionary spending across the board. That level of cuts hearkens back to the 2015-2017 budget crisis under former Republican Gov. Bruce Rauner.

The governor also said he had already done much to reduce spending since he took office in January 2019. He said he helped repair wounds after the budget impasse created $16 billion in unpaid bills. The Illinois Comptroller’s office estimated the backlog was at $8.3 billion as of Nov. 4, Capitol News reported.

“My predecessor, Governor Rauner, tried to drag the state underwater with painful and draconian cuts,” Pritzker said, “ ... His approach devastated higher education, child care, human services and hollowed out state agencies like those that manage public health and unemployment benefits.”

He called that option “the Republican approach.”

The second option is increasing the flat-rate income tax. Pritzker said previously it could go up by a full percentage point to 5.9%.

“Option three was the fair tax,” said Pritzker, who spend $58 million of his own fortune on the “yes” campaign.

A graduated income tax system would’ve had the least impact on working families, he added, but that option did not resonate with voters, especially those in southern Illinois.

Skeptical southern Illinoisans said they wouldn’t trust lawmakers to use the extra revenue wisely, and worried the amendment represented a slippery slope to increased taxes on the middle class. Presumptive winners in metro-east state House races, meanwhile, called for spending cuts and reductions in waste and fraud.

Business groups such as the Illinois Business Alliance praised the rejection of the amendment, while billionaires such as Illinois’ richest man, Ken Griffen, spent millions on the opposing campaign.

“Voters won’t send more money to corrupt and dysfunctional Springfield,” said alliance president Jared Carl. “It’s time for Springfield to enact meaningful pension, spending, and property tax reform.”

The Illinois Chamber of Commerce also lauded the amendment’s failure.

“It is clear that Illinoisans do not trust this legislature and this administration to spend more of their precious tax dollars without restraint,” Illinois Chamber of Commerce President and CEO Todd Maisch said in a statement. “We believe we’re on our way to hearing from the electorate that Illinois needs a lot more than tax increases to fix our economy. While it may not be official this morning, it certainly looks like Illinoisans have made their voices heard and want a plan for rescuing our state that is not just raise taxes, raise taxes and raise taxes some more.”

Pritzker blamed Republicans for bearing the burden of rejecting the amendment, which he said will ultimately lead to pain for Illinoisans.

“The Republicans stood against this. Whatever happens here, the pain that is endured by the people of Illinois, by the working families of Illinois, is on the Republicans and the special interests and the billionaires that backed the Republicans. They’ve got to step forward and help.”

Speaking at his daily COVID-19 briefing in Chicago Tuesday, Gov. J.B. Pritzker says local officials who won’t enforce COVID-19 mitigation orders will be responsible for the public health consequences that follow. Blueroomstream.com