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Local

GOP leaders speak out against graduated income tax proposal

Say proposals to generate revenue aren't best way to fix fiscal crisis

MORRISON – Three Republican state lawmakers addressed several issues at a town hall held Saturday at Morrison Institute of Technology, but there was one clear overarching theme – the governor’s proposals aren’t the best way to tackle the state’s fiscal problems.

State Reps. Tony McCombie, R-Savanna, and Andrew Chesney, R-Freeport; and State Sen. Neil Anderson, R-Andalusia, hosted the event which drew about 75 area residents.

Much of the focus was on Gov. J.B. Pritzker’s plan to generate additional revenue by switching from a flat income tax system to a graduated form, but many of the other hottest issues in Springfield right now are part of the Democrats’ grand plan to fix the budget deficit.

Pritzker has proposed a $38.9 billion budget for fiscal year 2020. Projections show the state looking at a $3.2 billion deficit by then, and a bill backlog of between $9 billion and $15 billion.

The graduated tax proposal is the centerpiece of the governor’s plan to fix the budget. The top tier of the rate structure would be 7.95% for the state’s wealthiest 3%, and Pritzker claims the remaining 97% would get tax relief or stay the same. The administration’s projections show the graduated tax generating $3.4 billion more annually.

The state Senate last week approved a rate structure that takes the ceiling to 7.99% for residents who make $1 million or more.

The governor’s plans to reduce the state’s budget deficit is dependent upon new revenue from not only the graduated tax, but several other proposals that include the legalization of recreational marijuana and sports betting, as well as gambling expansion and taxes on plastic e-cigarettes and bags.

“The governor needs a lot of policy changes for his budget to work, and these bills may or may not pass,” McCombie said. “I would rather do what the Constitution says and pass a budget with real revenue estimates. There also is no plan to pay off the huge bill backlog we have.”

The governor’s plans to capture additional revenue are disingenuous, Anderson said.

“The legalization of marijuana would bring in about $300 million a year, so I think it’s intellectually dishonest to think this will solve our budget problems,” said Anderson, who added he can’t support that bill as introduced.

The lawmakers estimate that sports betting would bring in $212 million and the bag tax $20 million.

“Taxing bags seems like a desperate measure to balance this dysfunction,” Chesney said. “We need to fix the underlying issues – our priorities are all wrong. We need to cut spending and live within our means.”

Andrew Nelms, state director of Americans for Prosperity, presented his organization’s views on the graduated income tax proposal. The conservative advocacy group was founded in 2004. It is funded primarily by billionaire businessmen David and Charles Koch, part of a family that wields a great deal of political influence.

Nelms said it is frustrating that Illinois is the sixth most populous state, with a $750 billion GDP, yet bad public policy has made it the laughingstock of the nation.

While the tax system as proposed would affect a very small part of the taxpayer base, the advocacy group believes that Illinois residents should fear handing over more taxing power to leaders in Springfield.

“Do you believe Illinois politicians have the fiscal discipline to manage a graduated tax system? I say no – this is just a path to more of your money,” Nelms said.

Nelms said there is a national trend to move away from the graduated tax system, which Illinois should pay attention to. New Jersey has the nation’s highest property tax and Illinois come in second for that dubious distinction.

“New Jersey adopted the graduated tax system 50 years ago and it hasn’t helped them,” Nelms said. “Connecticut was the last state to do it in the 1990s and it’s been a massive failure.”

Utah, North Carolina and Kentucky have recently moved away from the graduated tax.

The graduated tax proposal must pass both chambers of the legislature by a three-fifths supermajority before a referendum could be put on the November 2020 ballot.

Contact your lawmaker

Contact state Rep. Tony McCombie’s Savanna office at 815-632-7384, state Rep Andrew Chesney’s Freeport office at 815-232-0774, or state Sen. Neil Anderson’s Moline office at 309-736-7084 about the graduated income tax proposal or other state legislative issues.

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