Why Inaction on Illinois Progressive Income Tax Actually is a Good Thing

Opinion by Reboot Illinois' Madeleine Doubek

We've now gone 11 months without a state budget. It's been one year and five months since our personal state income tax rates dropped from 5 percent to 3.75 percent after the expiration of a temporary income tax increase. It's been one year since the Illinois Supreme Court unanimously rejected the state's first attempt at saving its pension funds.

And what do we have to show for all of that time? Zero.

No real talk of any pension-saving alternatives while we carry $111 billion in pension debt. No discernible progress toward a state budget that anyone is willing to reveal. Despite a few weeks of hoopla, no movement toward getting a progressive income tax amendment on the ballot for a vote in November and, therefore, no floor debate or vote on a separate bill to set different income tax rates on varying incomes.

Thank goodness. On that last point about progressive income tax rates, thank goodness for no progress.

My colleague, Reboot Illinois Editor Matt Dietrich, recently argued that by foregoing the progressive income tax ballot question last week, Gov. Bruce Rauner and Illinois lawmakers were losing a useful tool for the tall-order-task of getting Illinois back on track toward fiscal reality. To that I say, you must be joking.

Why in the world would anyone give Illinois lawmakers more power to set different tax rates for different people? Why give them the ability to raise those rates and create more of them any time they choose with nothing more than a simple majority of both chambers and a governor's signature?

Yes, Illinois needs to forge a budget compromise. Yes, it needs to start testing other ways to get pension debt addressed. Yes, that is going to take tax increases, but no way should we give lawmakers the huge power to set varying rates by majority vote.

The previous vote for a temporary income tax increase occurred in 2010 in the dead of night, during a lame-duck session, on the strength of only Democratic votes and Democratic Gov. Pat Quinn's signature. Quinn and others argued it was needed to deal with a state debt of $6.4 billion in unpaid bills, but the increased rates expired four years later and the state's debt then still was $4.3 billion.

At about that same time, the debacle started that now is known as Quinn's Neighborhood Recovery Initiative. The Neighborhood Recovery Initiative allowed $53 million of our tax dollars to be spent with little to no oversight. An audit four years later offered more than a hint that the program was little more than a way to pay people to get out votes for Quinn. And that's just the highest-profile example of grant fraud to come along in recent years.

And yet we're going to give many of these same people the power to set more than one tax rate by just a simple majority? We're going to give them more of our money to mismanage?

Dietrich is right when he says the tax increases are coming, so yes, we are going to be giving them more of our money. And if you aren't telling your lawmakers what you think about that, well then I'll just say you darn well should be.

Rauner has said nearly since his 2015 inauguration that he will sign off on tax increases and knows they're needed once he gets some reforms. So far, though, lawmakers won't give him any, not even changes to the state's purchasing laws that might save us all a few bucks.

And what do you think would happen if we changed our constitution to allow for multiple rates and we once again had one-party rule in Springfield?

As it is, we've gone 11 months without a state budget, with no real effort by legislators to cut spending or find a drop of budget fat. We've also let the weeks fly by since the 2014 governor's race with no substantive public debate of what kind of spending, taxes or tax system we ought to have.

All this time with little talk and no action. It's too late now for this election cycle for a vote on a progressive tax system. That means less power for our politicians. For once, inaction is a good thing.

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