If they have an excuse for this, none is apparent, and we can’t think of one.
Eight days ago Governor Pritzker released his proposed rates for a new progressive income tax, including his estimate of additional revenue to expect — $3.4 billion.
But he provided no support for that revenue claim, which we and others immediately said looked very suspicious. We’re still waiting. Pritzker has long said a progressive income tax is the key to solving our fiscal crisis and funding other promises he made.
The Civic Federation took a close look and said it “has not been able to replicate the $3.4 billion number and the Governor’s Office has not yet provided information about the methodology used to arrive at the figure.” The Illinois Policy Institute has been particularly critical. In response to their FOIA request for the administration’s basis for its projection, the administration said it needed more time.
Our own back-of-the-envelope calculation indicated a lower estimate than Pritzker’s, too. We didn’t make a more serious effort or share ours because we have only 2016 information on stratification of Illinois income groups to work off. That’s the latest we could get from our own FOIA requests, from the Rauner Administration as well. That, too, is inexcusable – more current data should be publicly posted.
I expect the administration eventually will show reasoning based on estimates of 2021 income stratification – optimistic ones that nobody has. That’s the first year a progressive tax could legally be levied. That might partially explain why nobody can confirm their numbers. However, I also suspect they did not dynamically score their estimate. That is, they did not adjust down to reflect how tax increases affect behavior, resulting in lower taxable income.
We’ll see, but it’s pretty clear what’s going on: The Pritzker Administration is backward solving to come up with justification for its projection. That’s no way to do it. They should have initially made the calculation objectively, which would have made it immediately available to share with the public.
Aside from that matter of process and transparency, it doesn’t matter much what the right number turns out to be. Even Pritzker’s $3.4 billion solves little. It would barely dent the true budget hole Illinois faces, as we wrote earlier.
UPDATE: Subsequent to writing this, the governors office released further details of its calculations, linked here.
–Mark Glennon is founder of Wirepoints.