Gov. Pritzker deserves no credit for his ‘taxpayer relief’ plan – Wirepoints

By: Ted Dabrowski and John Klingner

Just in time for the elections, Illinois Gov. J.B. Pritzker is set to send out income and property tax rebate checks as part of his $1.8 billion “taxpayer relief” plan. The governor will send up to $300 each in income tax and property tax rebate checks to families this year. The plan already included a suspension of the 1 percent sales tax on groceries and a delay in the state’s automatic motor fuel tax hike.

The problem is, none of what the governor is offering is real relief for struggling Illinoisans. Instead, it’s just Pritzker giving back a few hundred dollars after stripping Illinoisans of thousands. Pritzker has nearly doubled the state gas tax since he took office in 2019. He’s signed several laws that have helped push property taxes – already the nation’s highest – even higher. And he’s had a hand in the federal bailouts that have fueled inflation, leaving many Illinoisans far more poor. 

You can’t help but think most will see his “relief” package for nothing more than a campaign ploy. And many may be angry that the governor isn’t offering real relief through long-term structural spending reforms

1. Gas taxes: No relief whatsoever. 

Gov. Pritzker’s “relief” plan didn’t actually reduce gas taxes at the pump. The only thing it did was to delay a 2 cent gas tax hike in July 2022 for six months – until after the election.

Here’s the real story. Since Gov. Pritzker took office in 2019, he has overseen a near 30 cent increase in Illinois state gas taxes. He doubled the motor fuel tax from 19 cents to 38 cents and added a feature that as inflation goes up, so do state gas taxes.

When Pritzker took office, Illinois was ranked 21st nationally in overall gas taxes. Today, Illinois is ranked second highest, only behind California.

2. Property taxes: No relief for most as rebates will be swallowed by upcoming property tax hikes.

Pritzker is sending out property tax rebate checks worth up to $300. But those rebates will be swallowed up by property tax hikes as a result of the highest inflation rate in decades.

Illinois property tax law lets most local governments automatically raise property taxes by inflation, up to a maximum of 5 percent. Since inflation has exceeded 8 percent this year, property taxes will go up 5 percent in most local governments. For a homeowner who already pays $6,000 or more in taxes, that’s a hike of at least $300, entirely wiping out the governor’s rebate. That’s likely to be the story for most property owners in Illinois.

The governor’s giveaway is even more lackluster when you consider that Illinoisans are already forced to pay the nation’s highest property taxes, according to ATTOM, a leading curator of real estate data nationwide.

Illinoisans on average pay 1.86 percent on their home value, while residents in Indiana and Kentucky pay just 0.77 percent and 0.64 percent, respectively. On a $300,000 home, that’s a tax difference of more than $3,200 that Illinoisans have to pay.

Wirepoints has written in the past about how Pritzker and the lawmakers have been busy passing legislation that will only serve to drive state and local taxes even higher. Check out the appendix for a short list.

3. Income tax: no relief.

Pritzker’s offer of $50 to $300 back in income taxes means little in the face of skyrocketing prices that the governor, both directly and indirectly, is responsible for.

Illinois families are being hit hard by the highest inflation in 40 years. Overall, prices nationally are up 8.3 percent over the year and many typical family staples have skyrocketed far more.

Lunchmeat prices are up 18 percent year-over-year. Eggs cost 40 percent more. Coffee, up 18 percent. Natural gas for home utilities is up 33 percent. And the cost of gasoline is still up by more than 25 percent.

The jump in costs is the direct result of the federal government’s trillions in pandemic spending packages. Illinois’ Democratic leaders, including Gov. Pritzker, were some of the biggest cheerleaders of the federal bailouts and, in fact, got the ball rolling by making the first ask of Congress. Overall, Illinois received nearly $200 billion in private and public stimulus  – part of the unprecedented $13 trillion the federal government poured into the economy.

The Wall Street Journal recently reported that inflation is costing the average U.S. household an additional $276 a month – or more than $3,300 a year. Even taken altogether, the governor’s offered “relief” to Illinoisans is nothing compared to those costs.

This state’s residents would be far better off if Pritzker were to embrace structural changes – instead of just pre-election tax giveaways.

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Appendix

The governor and the lawmakers supporting his agenda have been busy passing legislation that will only serve to drive all Illinois taxes, including property taxes, even higher. The list of cost hikes below is just a sample:

• Granting additional sick leave benefits to teachers. Teachers got additional sick days off for Covid, in addition to the 12 to 15 paid sick days a year they already receive. Most unused sick days can be accumulated and turned in for bigger pensions.
• Hiking the pension benefits of Chicago firefighters. A group of Chicago firefighters had their annual cost-of-living benefits boosted to 3 percent compounded, up from 1.5 percent simple.
• Granting the Chicago Teachers Union additional bargaining powers. Chicago Teachers were given even more powers over which they can now strike – the same powers that let them strike in 1969 1971, 1973, 1975, 1980, 1983, 1984, 1985 and 1987, and allowed them to threaten strikes eight other times.
• Making Tier 2 benefits for local public safety more expensive. Tier 2 benefits for downstate police and fire retirees were sweetened. Costs were estimated at some $70 to $95 million over the first five years.
• Restoring 6 percent salary spiking for Illinois teachers. Pritzker lifted caps on end-of-career salary hikes for teachers back up to 6 percent from 3 percent, driving up pension costs.
• Using taxpayer dollars to picking winners and losers in the EV industry. Illinois’ political elite are choosing which players in the electric vehicle industry get subsidies and tax breaks at the expense of other industries and taxpayers.
• Granting an expensive new contract to state AFSCME workers. AFSCME workers got expensive, multi-year raises and new benefits from their latest state contract, pushing up their guaranteed pensions. Working-class Illinoisans with no such contracts or guarantees have to pay for those pay and benefit increases.
• Expanding costs in healthcare by unionizing new workers. A new class of public community health workers was created, increasing Medicaid costs.
• Expanding Medicaid coverage to illegal immigrants. Illinois became the first state to extend public health insurance to all low-income noncitizen seniors, even if they’re in the country illegally. Initially, it comes at an approximate cost of $50 million a year.
• Pushing a massive transformation of Illinois energy sector with incentives and subsidies. Lawmakers demanded Illinois go fully green by 2050, shut down coal and natural gas plants and provided millions in subsidies to nuke plants and green industries. Nobody knows the true costs of these massive changes.
• And biggest of all, pushing a new amendment that would cement union powers into the state constitution. The Labor reforms that Illinois needs to lower taxes will be blocked if Illinoisans vote for Amendment 1 this November.

Read more from Wirepoints:

• Pritzker’s $1 billion in “tax relief” would be devoured by inflation in less than a month
• Thirty years of pain: Illinoisans suffer as property tax bills grow far faster than household incomes, home values
• Credit the near $200 billion federal bailout, not Pritzker’s actions, for Illinois’ “improved” 2023 budget
• Illinois’ Pritzker promised to lower property taxes. He’s only made them worse.
• Wirepoints’ Amendment 1 page