Illinois voters decide whether to change the state’s flat income tax to a progressive one this November, but the chief proponent and opponent have been separately debating what it could mean for Illinois' high property taxes.
Illinois has a flat income tax. Lawmakers have changed the flat rate several times over the past decade. Democrats in the Illinois Legislature passed a proposed constitutional amendment to voters this November to change the flat income tax to a progressive structure with higher rates for higher earners.
Illinois has among the highest property taxes in the country.
Gov. J.B. Pritzker told Politico Live last week that the state should be spending more money on public schools so districts don’t have to rely so heavily on property taxes. He said raising an additional $3 billion a year through a progressive income tax could lead to increased state funding for local schools to help low-income neighborhoods.
“Actually, low-income neighborhoods, your property tax is actually higher than in high-income neighborhoods, and so the only way you can correct for that is in the income tax,” Pritzker said.
Ideas Illinois Chairman Greg Baise is opposed to the progressive income tax plan. He said nowhere in the proposed progressive tax amendment does it mention it will help lower property taxes.
“Is [the governor] going to put $3 billion into education and then require local school districts to lower their property tax levies?” Baise said. “Anywhere in this proposal does it do that?”
Pritzker said the proposed rates that would follow possible voter approval of a progressive income tax are fair because it would mean lower rates for most taxpayers.
“It’s only the top 2.7 or 3 percent that will pay a little more,” Pritzker said. “Addressing income inequality is very important.”
Baise said addressing income inequality wasn't in the governor’s job description. He said state government hasn’t proven it can wisely spend the money it collects now.
“The flat income tax in this state makes it a little more difficult for your elected representatives, who in the last ten years have raised taxes on taxpayers in Illinois and still we have all those other problems: State debt, property taxes and a pension deficit," Base said.
The progressive tax rates are separate from the proposed amendment. If the flat tax is done away with and the constitution allows for tiered rates with higher rates on higher earners, state lawmakers could change the rates every year.
“What this argument is about is to give an opportunity for Springfield politicians to have an easier way to raise money when they need, for whatever particular pet project they happen to be wanting to get done in any particular year and this would open that door,” Baise said.
Voters will decide whether to change the state’s flat income tax to a structure with higher rates on higher earners at the ballot box this November.