Prairie State Wire

Illinois voters are scheduled to decide the fate of a constitutional amendment designed to install a graduated income tax Nov. 3 but that could change if the amendment were withdrawn from the ballot, according to Americans for Prosperity Action senior adviser Andrew Nelms. 

The Illinois Legislature could reconvene and take the amendment off the ballot with simple majority votes in both houses, Nelms said.

“There’s still plenty of time for them to act,” he told Prairie State Wire. “They could come back at any time.”

Nelms said if legislators are listening to the people who would be harmed by scrapping the 4.95 percent flat tax — a list that includes small business owners, major employers, farmers and others — they would withdraw the amendment.

He said Gov. J.B. Pritzker, the author of the tax plan, could bring the legislature back, or legislative leaders can decide to reconvene. 

The constitutional amendment, dubbed the “Illinois Fair Tax,” was approved during the 2019 session, as the Senate passed it 36-22 and the House did so by a 73–44 vote. Pritzker signed Senate Bill 687 into law on June 5, 2019. It needs the support of 60 percent of the votes on the ballot measure itself, or a simple majority of all of votes cast in the election.

Nelms said he thinks taxpayers are weary of the constant drumbeat of higher taxes they hear from Springfield.

Illinois residents have the biggest tax load in the nation, paying almost 15 percent of their income in state and local taxes, according to WalletHub, which ranked ranked it the heaviest tax burden in the nation in 2020 and 2019. Illinois also has the second-highest property taxes in the nation.

Despite that, state lawmakers raised income tax increases in 2011 and 2017, followed by 20 new or higher taxes in 2019, including doubling the gasoline tax.

Nelms thinks residents are weary of tax-and-spend policies, and the steady exodus of people leaving the state proves his point. Illinois has experienced six straight years of population losses even as the nation’s numbers increase.

That’s why Nelms and others — the National Federation of Independent Businesses (NFIB), the Illinois Farm Bureau, Americans for Prosperity Illinois and the Illinois Chamber — oppose the tax plan.

He said the mechanism to pull the question off the ballot has existed since the Sixth Constitutional Convention in 1970, and delegate Peter Tomei, chairman of the committee on suffrage and constitution amending, made that clear.

“We have spelled out specifically that the legislature does indeed have power to withdraw proposed constitutional amendments by a majority vote,” Tomei said a half-century ago. He said such power was needed “for weeding out perhaps hastily considered or ill-advised constitutional amendment proposals.”

In Nelms’ view, both are applicable to this amendment.

When the governor unveiled the plan in April 2019, Pritzker said 97 percent of Illinoisans would pay the same or lower taxes if the amendment was approved. He said only those who make more than $250,000 would see a tax hike and it would generate an additional $3.4 billion in annual revenue.

Nelms scoffs at that. In an essay he wrote for ChicagoBusiness.com, he said the amendment on the ballot differs from the proposal Pritzker laid out more than  a year ago.

It is “materially different than when it was introduced, including a number of provisions that would likely have negative unintended consequences in the future for senior citizens and the middle class," he wrote. "The proposal set to be voted on in November would eliminate a provision that there be ‘one tax’ and replace it with ‘any tax,’ making it easier to tax retirement income, for example, thus allowing politicians to enact one set of rates for ordinary income and a separate rate, or rates, for retirement or other types of income. 

“It also would eliminate a prohibition against local income taxes that was part of the original version. If the legislature is granted this power, it would then be able to add additional brackets, increase the rates and lower the threshold at which higher rates kick in, affecting people and business owners who are far from rich.”

He told Prairie State Wire that economic conditions have changed since the plan was rolled out.

The COVID-19 pandemic has left businesses reeling and the state short of money, passing a budget that relies on billions in federal dollars. Even Pritzker thought lawmakers should have made more cuts, Nelms said.

The University of Illinois System’s Institute of Government and Public Affairs (IGPA) released a report June 1 that said the state faces a challenging period during and after the pandemic.

“Like the disease that caused it, the economic downturn is novel in many dimensions and creates massive uncertainties,” the report states.

Nelms said no one is sure what will happen in the coming months and it seems a poor time to alter the state’s income tax plan.

“Illinois lagged the nation in making a recovery from the Great Recession,” Nelms said. “We will likely lag the nation in recovering from the pandemic.”

With the state deep in pension debt, its credit rating abysmal and the steady loss of people who will be harmed by this new tax plans he said the best option for Illinois is to withdraw the amendment. He urges people to contact their legislators and urge them to go back to work and do just that.

Nelms said he realizes getting the legislature to reconvene and withdraw the amendment is a long shot, buts one worth taking.

Still, he said persuading Illinois Democrats to consider anything other than another tax is a challenge.

“When there’s a movement to do something pro-taxpayer, it always fizzles,” Helms said. “But we’re always going to fight on behalf of the beleaguered Illinois taxpayer. Absolutely, there’s time.”