*This piece has been updated to include Office of Management and Budget projections for 2021-2025, released in October of 2019. The original version only included 2019 OMB budget projections released in October of 2018. The overall impact of the update is not material to the findings of the piece.

By: Ted Dabrowski and John Klingner

Listen to Gov. J.B. Pritzker and new Senate President Don Harmon in recent TV interviews and they’ll leave you thinking their progressive tax proposal includes real property tax relief for Illinoisans. Harmon pitches it this way: “The fair income tax would allow us to generate that income at the statewide level and push down the pressure on property taxes.

That’s simply not true. There’s no money in their progressive tax plan for property tax relief. The math says so.

Their proposed tax structure will reportedly bring in just $3.6 billion in new revenue, an amount that would be swallowed immediately by the state’s projected budget deficits, unpaid bills and pension contributions, leaving virtually nothing for property tax relief or any other promises. We break out the numbers down below.

The only way tax Pritzker and Harmon can deliver real property tax cuts – in the absence of the spending and pension reforms Illinois actually needs – is to massively hike income taxes by billions more. That means they’d have to break their current promise of tax cuts for working and middle income Illinoisans.

Here’s what they said, and more importantly, what they didn’t.

What they’ve said

Listen to Pritzker’s interview on CBS 2 Chicago when he’s asked:

“Is property tax reform something you can promise will go hand-in-hand with the progressive tax?”

He said: “Remember what you’re paying for when you pay your property taxes… If we can help with that, then we are alleviating the burden of property taxes. The examples are paying for education.”

Sen. Don Harmon was even more explicit during his recent interview on Chicago Tonight

When asked if the progressive tax was needed before property tax reform could be tackled, he said:

“It’s a critical precursor [to property tax reform]…The property taxes in this state are too high because we rely almost exclusively on the property tax to fund our schools. If the state lived up to its obligation to provide the primary source of funding for kindergarten through high school we’d be able to push the property tax burden down….The fair income tax would allow us to generate that income at the statewide level and push down the pressure on property taxes.

Neither man is being honest. The progressive tax plan, as proposed, can’t grant a tax cut to 97 percent of Illinoisans and provide property tax relief at the same time. Here’s why:

Fact #1. The progressive tax structure raises $3.6 billion in revenue.

Pritzker and Harmon claim the progressive tax structure passed by the legislature – the one that would supposedly go into effect if the progressive tax referendum in November passes – would raise $3.6 billion in additional revenues a year. 

It’s the rate structure shown below that pro-tax politicians are using to make their promise that 97 percent of Illinoisans will get, at the most, a $65 income tax cut. However, if lawmakers want to raise billions more from a progressive tax structure to offer real property tax relief, the rates on middle and working class Illinoisans will have to jump.

Fact #2. Pritzker has said that the tax increase will be dedicated to the state’s budget deficit. Recent budget office projections show deficits of $2-3 billion-plus over the next few years.

Pritzker has gone on the record saying: “I’m committed to stabilizing this budget, to making sure that we get rid of the deficits that exist for the state of Illinois,” and that “the fair tax, let’s remember, is all about putting the state on firm fiscal footing for the future to make sure we can balance the budgets in the future.”

Rauner projected a $3.4 billion shortfall in 2021 and $3 billion-plus budget deficits for several years after that. Pritzker’s projected numbers are a bit better, but still show budget deficits growing to $3 billion in later years. Here are the numbers from both:

Rauner’s Office of Management and Budget

Pritzker’s Office of Management and Budget

Based on those numbers, the money that will be raised from the progressive tax, if it passes, will be largely consumed by the state’s structural budget deficit. There will be almost nothing left over for anything else. Certainly nothing for property tax relief.

Not to mention that the state still has more than $7.1 billion in unpaid bills as of January 24, 2020. And that the state is still shorting its pension plans by several billion dollars every year.

Billion more in taxes

Harmon and Pritzker shouldn’t imply property tax relief unless they’re prepared to break their promise of tax cuts for 97 percent of all Illinoisans.

Take Harmon’s goal of making the state the primary provider of education funding, for example. That means the state would be responsible for funding at least 50 percent of all K-12 education spending in Illinois going forward, requiring billions more annually in state spending.

If Harmon had been honest in his interview, he would have said: ”To make the state the primary funder of education (more than 50 percent of all education spending), we’ll have to raise our progressive tax proposal by another $5 to $7 billion a year. And that means we’ll have to enact a significant income tax hike on middle- and working-income residents.”

And if either politician were honest about the full cost of the state’s deficit, they’d say: “Paying down our unpaid bills and contributing more to our core pension problems would mean another $3 to $5 billion on top of that. In total – without pension or spending reforms – we need some $12 to $15 billion in total tax hikes, not the $3.6 billion we’ve proposed.”

Wirepoints ran similar numbers last year using available 2015 tax data and found that the income tax rate on middle incomes would have to jump for the progressive tax to raise an expected $11 billion in new revenues.

Rates would have to jump to 8.5 percent on middle incomes starting at just $50,000. And rates would rise to above 11 percent for million-dollar incomes.

That’s a far cry from providing relief for Illinoisans.

We’ve documented in detail why the progressive tax will only make things worse in Illinois. It’s a bad idea all around.

And it’s even worse that Pritzker and others are overselling the tax the way they are. Making Illinoisans believe something that’s just not true is an all too common tactic used by Illinois politicians on both sides of the aisle. It’s part of the reason why Illinois is in such a mess

Read more about how the proposed progressive income tax will fail Illinois:

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Poor Taxpayer
6 months ago

Keep sending all of your high paying taxpayers to Florida. The HUGE PENSION money moves to Florida and they live in beautiful houses and drive new cars and go out to eat all the time. Thank you Illinois hard working taxpayers (suckers). There are so many Rich cops, teachers and firemen down here living the good life on your money. Keep up the good work.

Douglas
6 months ago

Want lower property taxes? You will be happy to know that it takes very little more than a trip to a menards or home depot. Dig a hole in your backyard and build an outhouse. Next, remove all your toilets and other plumbing in the property. For additional details, contact the billionaire governor as he knows all about it. He may be busy putting more of his money/assets in the tax free Bahamas, or writing a speech on how the wealthy need to “pay their fair share.” Just leave a message and customer driven state government will surely get back… Read more »

Freddy
6 months ago
Reply to  Douglas

JB just had the toilets removed. Sinks showers bathtubs laundry were still working. Water if I remember reading correctly was still connected. I will just turn off the water to the toilet and take the knob off and tell the assessor my toilets don’t work. Port o Potty’s are cheap to rent or I’ll just put in a heavy duty garbage disposal unit in my bathtub. Should do the job and save me a ton of tax’s and I’ll save money on not cleaning toilets I don’t have.

Poor Taxpayer
6 months ago

This tax increase would be the best thing that ever happened to Florida and Texas. Bring it on and everyone with money will run for their economic lives.
Solve the problem with a U Haul and the best day of your life is ahead of you.
The greed of the cops, teachers and firemen have destroyed the quality of life for the honest hard working taxpayer. Kiss Illinois good bye, it is DOA, no hope of ever recovering.

Old Spartan
6 months ago

This is a good example of how Illinois has sunk to the low place it is in. Voters are going to get duped again. They just keep voting for the same old crew that has lied to you over and over again. Are they lazy, uninformed, uneducated and docile? All of the above. Illinoisans are getting what they deserve.

debtsor
6 months ago
Reply to  Old Spartan

Voters aren’t being duped; they know exactly why they voted Democrat in 2018: Because Orange Man Bad, so therefore, vote anyone except the Republican Party. And it turned our once wonderful state a deep deep shade of blue.

Riverbender
6 months ago

LOL lets cut taxes without cutting spending.
Lolololololol

Hank Scorpio
6 months ago

Aside from the obvious fact that his claims are hot air, isn’t the purpose of a progressive tax to lower the burden on the lower brackets? His plan keeps everyone else below 250k at effectively the same rate.

Riverbender
6 months ago
Reply to  Hank Scorpio

That is until inflation, a genuine certainty, kicks in making 250,000 easily obtainable by the working taxpayers. To show an example of this the Federal Government legislated the Alternative Minimum Tax to target a handful or two of wealthy individuals that were not paying Federal taxes. Today things have evolved where many in the working middle class are affected by the tax as well. Congress often legislates a temporary stop gap to keep the full effect of the AMT from kicking in…but one can easily see by looking at the AMT situation that the 250,000 will, if history is any… Read more »

joe blow
6 months ago
Reply to  Riverbender

That is until they realize that taxing people more that make over 250k isn’t enough, then they lower the threshold to 150k, because rich people, then 100k because its the right thing to do, then 50k because eff you we need the money, then 1k because what you gonna do about it chumbalone?

debtsor
6 months ago
Reply to  joe blow

Look at California’s progressive tax rates to give you an idea of where we are headed.

Married
Tax Bracket Tax Rate
$0.00+ 1%
$16,446.00+ 2%
$38,990.00+ 4%
$61,538.00+ 6%
$85,422.00+ 8%
$107,960.00+ 9.3%
$551,476.00+ 10.3%
$661,768.00+ 11.3%
$1,000,000.00+ 12.3%
$1,074,996.00+ 13.3%

California – Single Tax Brackets
Tax Bracket Tax Rate
$0.00+ 1%
$8,223.00+ 2%
$19,495.00+ 3%
$30,769.00+ 4%
$42,711.00+ 8%
$53,980.00+ 9.3%
$275,738.00+ 10.3%
$330,884.00+ 11.3%
$551,473.00+ 12.3%
$1,000,000.00+ 13.3%

Platinum Goose
6 months ago
Reply to  debtsor

That’s exactly where we are headed. What will be real interesting to see is how many union employees making $75K a year will decide to opt out of the union once they start getting dinged an extra $275 in state taxes every month.

Riverbender
6 months ago

Lower one tax and don’t tell about raising another tax to make up for the cuts. What a great plan that is certain to get considerable support from Illinois voters.

Tom Paine's Ghost
6 months ago

There will never be any tax relief in Illinois for any tax – Property Tax, Income Tax, Sales Tax, license plates, city stickers, Chicago water and trash tax, property transfer tax, birth tax, death tax, you-name-it tax – until Public Sector Unions are made illegal and eliminated. Until then the corrupt Democrats and their masters at AFSCME, SEIU, IFT and CTU will continue to criminally collude to screw over the working chumbolones of Illinois. Even when Illinois bankruptcy happens the democrat political criminals will work for their criminal union member masters and their financial lifeblood.

joe blow
6 months ago

you forgot the “amusement tax”

Mike Mike
6 months ago

Has the Governor’s office produced any documentation of how passing the progressive income tax hike would provide property tax relief?

Or is this another verbal claim with no documentation to the public, just as the Governor’s office has not provided any documentation on how a voluntary pension buyout program could save up to $25B.

Admin
6 months ago
Reply to  Mike Mike

Only mixed verbal messages. Watch that video and see how he handles the question.

Mike Mike
6 months ago
Reply to  Ted Dabrowski

Another example of Pritzker making an undocumented claim.

joe blow
6 months ago

I’m sure JB is going to repatriate his offshore accounts to banks in Chicago just so he can help out with the taxes, right?

Juicy Smollier
6 months ago

If there is anywhere near a doubling in the income tax rates as above (I make over 100k), it will make leaving for me that much easier. I’m going to leave, it is just a matter of time, and I don’t own a place because of it — if it gets crazier, poof, another six figure earner gone.

Indy
6 months ago
Reply to  Juicy Smollier

Indiana welcomes you with open arms, low taxes, fiscally responsible government and the best long term stability in America.

debtsor
6 months ago

Wirepoint’s figures seems more accurate as to where things will eventually go, more in line with California’s progressive tax rates: CALIFORNIA RATES: 1 percent on the first $8,544 of taxable income 2 percent on taxable income between $8,545 and $20,255 4 percent on taxable income between $20,256 and $31,969 6 percent on taxable income between $31,970 and $44,377 8 percent on taxable income between $44,378 and $56,085 9.3 percent on taxable income between $56,086 and $286,492 10.3 percent on taxable income between $286,493 and $343,788 11.3 percent on taxable income between $343,789 and $572,980 12.3 percent on taxable income of… Read more »

Freddy
6 months ago

Four things come to mind immediately. First is even if the entire $3.6B is put towards schools how many new school contracts are in the pipeline and how many existing contracts are almost over with all getting 2-3%/yr+ raises and higher costs for medical/pensions/benefits? Second if property tax reduction is offered it will only amount to either a temporary tax cap freeze or a few % reduction? The new higher value of contracts will easily eat up 1/2 of the 3.6B year over year. Third there would probably be a school hiring frenzy with more assistant supers and principals/employees all… Read more »

MikeH
6 months ago

And that’s $3.6B before the rich start popping smoke and fleeing the state.

Mike Williams
6 months ago

What a surprise. Illinois liberals hiding the truth and most of the media ignoring it. It should be interesting to see which Illinois media outlets endorse the progressive tax when it’s time to vote.