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* Tribune…
As Pritzker prepares to deliver his first spending plan to lawmakers Feb. 20, his administration said it is facing a $3.2 billion hole for the budget year that begins July 1. That deficit is more than $400 million deeper than the Rauner administration estimated before leaving office. […]
Throughout his campaign, Pritzker repeated his plan to shift from a flat state income tax to a federal-style graduated system in which higher earners would pay higher rates. But that requires an amendment to the Illinois Constitution, which would take almost two years to get on the ballot for voter approval.
His other ideas for generating new revenue — legalizing and taxing recreational marijuana and sports betting — also would take time to implement and wouldn’t raise the substantial sums that an income tax change could. […]
A separate report released Friday from Pritkzer’s transition team raised the prospect of expanding the state sales tax to some services — a concept long discussed and disregarded. It even raised the prospect of a statewide tax on plastic bags such as the one imposed in Chicago.
* From the transition report…
Illinois should take measures to broaden their tax base by exploring new sources of revenue. This committee believes several areas could be particularly productive. The state could levy a sales or excise tax on products and services that have traditionally been exempted in Illinois but not exempt from taxation in neighboring states. These categories include new products (e.g., e-cigarettes, cannabis), products that carry a cost to society (e.g., plastic bags), and various services that have been traditionally exempt.
The legalization of untaxed industries — including sports betting, internet gaming, and cannabis usage — would generate additional annual revenues. New sources of revenue should be considered through both a fiscal and a fairness lens, and the state should prioritize progressive taxes that help the middle class and those striving to get there.
All of these revenue sources combined couldn’t plug the state’s $3 billion deficit. Service taxes would likely provide the most. The e-cigarettes tax is an interesting thought.
More on that…
[Deputy Governor Dan Hynes] says details haven’t been ironed out about how a vaping tax might work. Taxation on vapor products varies across the country, with some states taxing a percentage of the wholesale value while others tax per unit or milliliter of e-liquid. Last year, Chicago passed an ordinance that hiked the city’s e-cigarette tax to $1.50 from 80 cents per container, and to $1.20 from 55 cents per milliliter of liquid nicotine.
The idea of a state tax on e-cigarettes emerged from the budget transition committee. “Every mom and dad who has a teenage adolescent child will stand up and applaud,” Hynes said.
The rapid growth of e-cigarette use, or “vaping,” among teens is generating concern among the health-care community. Taxing may help curb that use. Vaping is considered less harmful than smoking cigarettes, but its health risks are still not known.
Hynes reiterated that the e-cigarette tax combined with sports betting and legalized marijuana are ideas that won’t solve the state’s budget problems overnight. “It’s a multi-year, multi-budget solution. And so while we take those multiyear steps we have to be disciplined in spending. We have to keep control of spending and make inroads into reducing the deficit–and then get everyone united on the idea of the graduated income tax.”
* Likely both…
Was Gov. J.B. PRITZKER trying to lower expectations for his first budget proposal or start setting the stage for a graduated income tax? Or both?
* Meanwhile…
.@JBPritzker about the FY 19 budget - "“I applaud the bipartisan working group and the General Assembly for passing a state budget." I voted against the unbalanced budget. The Pritzker Jobs Tax (aka progressive tax) would kills jobs and hurt families. We need to cut spending! https://t.co/myspuwrdx9
— Rep. David McSweeney (@1980reagan) February 8, 2019
He’s right about the recent history…
“I applaud the bipartisan working group and the General Assembly for passing a state budget–something Bruce Rauner has never done,” said JB Pritzker. “Instead of doing his job, this failed governor forced our state into a historic 736 days without a budget, decimating higher education and human services and doing damage that will take years to rebuild. Three and a half years into his term, I urge Bruce Rauner to resist his heartless instincts to play politics with people’s lives and sign a full budget for the first time. Hardworking Illinois taxpayers deserve more than going years without a spending plan, and when I’m governor, I will always work in good faith with lawmakers to get the job done.”
posted by Rich Miller
Monday, Feb 11, 19 @ 9:41 am
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Step right up, Rep McSweeney, with your proposed spending cuts. No one can stop you from doing so.
Comment by wordslinger Monday, Feb 11, 19 @ 9:48 am
Rep. McSweeney is constantly bellyaching about the budget and insists on cutting taxes. The budget isn’t yet balanced with the higher revenue and what’s his solution? Cutting revenues. And then insisting that we make cuts. I would love for the Representative to lay out the billions in cuts that he says can balance the budget.
Rep. McSweeney has never been a serious voice when it comes to the budget. He has an utter and complete lack of understanding of the situation and insists that magic fairy dust can balance the budget.
So, again, Representative. Let’s see what your magic budget looks like with a reduced tax rate.
Comment by Demoralized Monday, Feb 11, 19 @ 9:51 am
The McSweeney tax cutting and no tax thingy only works of people are willing for government to dramatically slash programs and agencies.
The reason McSweeney won’t catalog these slashes abd cuts is… he knows that there’s no stomach or political will, ever with voters.
Comment by Oswego Willy Monday, Feb 11, 19 @ 9:53 am
Expanding the state’s income tax to retirement income should also be considered. Retires helped to put us into this mess, and they should play a role in getting us out of it. I know some would move, but the majority would stay in Illinois. Otherwise the burden of this deficient and the financial disasters to come will continue to be the burden of the working middle class.
Comment by Yup! Monday, Feb 11, 19 @ 9:53 am
McSweeney was also on Twitter yesterday sounding the alarm about Illinois turning into California or New York thanks to a $15 minimum wage, so.
Comment by LXB Monday, Feb 11, 19 @ 9:54 am
Are Reps allowed to file amendments to appropriation bills in the House like they are in the Senate? If so, why not just file his amendment and put it on the board?
Comment by Anonymous Monday, Feb 11, 19 @ 9:56 am
Come on Rep, as Word said no one can stop you. File that bill that outlines in detail which human services you will cut or eliminate, which state facility or hospital or state office you will close, how many state workers will be laid off.
Take it to committee stand on your bill’s merits and show the pain it will cause. Own it, embrace it, call it what you say needs to happen.
But you are a Twitter Warrior and Hero so I don’t think you will be going to LRB in the near future.
Comment by Give Me A Break Monday, Feb 11, 19 @ 9:57 am
Why not just tax the air we breathe?
Comment by Collinsville Kevin Monday, Feb 11, 19 @ 9:58 am
I just hope they don’t shoot the crew ( repairing the deficit with “structural reforms” ei raising employee healthcare 120%)
To make more space on the current boat.
Chart course all you want.
If you shoot the hands
Who will man the oars?
Comment by Honeybear Monday, Feb 11, 19 @ 10:00 am
The person to ask about cuts is old Jay Bob. Looks like there will have to be some if the budget is to be truly balanced while we wait for all tax increases to take effect and generate revenue.
Comment by Captain Obvious Monday, Feb 11, 19 @ 10:02 am
Why not enact a temporary tax hike to 5.95% for 6 months? That would almost generate enough money to address the budget shortfall.
Comment by City Zen Monday, Feb 11, 19 @ 10:07 am
Why is it that some people try to help, and some people just want to complain?
List your budget cuts, Representative, and perhaps you will get some respect even from your opposition. Until then, continue your Twitter trolling and see the disdain roll in.
Comment by Jibba Monday, Feb 11, 19 @ 10:12 am
City, 7% would be even better
Comment by Anonymous Monday, Feb 11, 19 @ 10:16 am
Rep. McSweeney is a destructive force in representative government. He serves to undermine the process and cause further damage.
If he wants to cut services to balance the budget let him show his work, I’m sure all his suggestions will be constitutional as well.
I’ll start the conversation. We have a lot of agency police. Let’s consider eliminating the SOS police, DNR police, ICC police, and any other agency police. Restructure and staff the ISP to do the jobs. Consolidation should reduce headcount and end redundancy.
Comment by don the legend Monday, Feb 11, 19 @ 10:18 am
–Expanding the state’s income tax to retirement income should also be considered.–
See if you can find one of 177 legislators willing to sponsor such a bill.
Comment by wordslinger Monday, Feb 11, 19 @ 10:24 am
Can a more progressive exemption schedule be used in conjunction with a flat tax increase rather than a progressive income tax? Or would that fail the constitutional muster?
Comment by the Edge Monday, Feb 11, 19 @ 10:25 am
It will be fascinating to see the Democrats approach on the balancing the budget for the first time in 18 years pivot from a balanced approach of cuts and revenues to spending increases and tax hikes on the “wealthy” to fund their progressive agenda.
Total control of Springfield has its downsides when your base has no concern for the dire fiscal realities in Illinois.
Comment by Lucky Pierre Monday, Feb 11, 19 @ 10:26 am
California’s a much brighter scenario than Kansas, Rep. McSweeney, unless you’re afraid of brown people.
Comment by Anonymous Monday, Feb 11, 19 @ 10:35 am
=== when your base has no concern for the dire fiscal realities===
That’s rich coming from a Raunerite.
Comment by Rich Miller Monday, Feb 11, 19 @ 10:42 am
===for the first time in 18 years===
Gov. Rauner signed the last budget.
So you’re angry Rauner signed an unbalanced budget?
Comment by Oswego Willy Monday, Feb 11, 19 @ 10:44 am
==McSweeney was also on Twitter yesterday sounding the alarm about Illinois turning into California or New York thanks to a $15 minimum wage==
Those states are ranked 1st and 3rd, respectively, in total GDP while Illinois is 5th.
So I fail to understand why turning into those states is such a horror, economically, for GOPers.
Perhaps they, somehow, think that if we increase the minimum wage then everyone in Illinois will turn vegan?
Comment by MG85 Monday, Feb 11, 19 @ 10:46 am
== Can a more progressive exemption schedule be used in conjunction with a flat tax increase rather than a progressive income tax? ==
A larger per person exemption would probably be fine. But I think a variable exemption tied to income would not pass muster.
Comment by RNUG Monday, Feb 11, 19 @ 10:49 am
California and New York are not Illinois. One has the best climate on the mainland and natural beauty, the other has the most important city in the world. If Illinois taxes income at CA and NY rates, the population loss will become an Exodus. Why live here when you can pay the same tax rate in California which is a lot nicer place.
Comment by Anonymous Monday, Feb 11, 19 @ 10:53 am
I was wondering if the state’s current flat income tax was in IL’s constitution… Question answered.
Comment by Levois Monday, Feb 11, 19 @ 10:57 am
Didn’t the progressive democrats tell us FY19 was balanced?
Now we have either incompetence, or deception.
Anon 10:35, no one is afraid of brown people. That accusation doesn’t belong in the public discourse. What people are afraid of is non assimilating low-skill train wrecks that just come here illegally for a handout, and illegal entry of criminals. The color of their skin is irrelevant as brown immigrants that assimilate, are self-sufficient, law-abiding, are most certainly welcome and have always been.
Comment by straight talk Monday, Feb 11, 19 @ 10:57 am
===Why live here when you can pay the same tax rate in California which is a lot nicer place. ===
1) You don’t know what the rates will be;
2) I live here because my job and family are here, which is the case with most people;
3) As we’ve discussed time and again, the people who leave are generally lower income. A progressive tax would supposedly give them a better deal.
Comment by Rich Miller Monday, Feb 11, 19 @ 10:58 am
Straight talk…it was widely expected that the FY19 Budget was unbalanced by perhaps 300M, but that is fairly common and gets worked out later.
Sadly, JB has had to probe the agencies to find out the exact state of the debt, which Rauner hid. So, you’re right…there was deception. Rauner’s.
Comment by Anonymous Monday, Feb 11, 19 @ 11:13 am
The lie was put to the “cut our way to a balanced budget” fallacy in the last 4 years when, time and again, Rauner-appointed agency heads were unable to identify sufficient cuts to their agencies to bring the budget into balance. They often acknowledged that the budgets they had were insufficient to do the jobs they were tasked by the Legislature to do. But sure, let’s keep trotting out the Kansas talking points, McSweeney.
Comment by Anon324 Monday, Feb 11, 19 @ 11:21 am
–Total control of Springfield has its downsides when your base has no concern for the dire fiscal realities in Illinois.–
Yeah, fiscally conservative Raunerbots like yourself were just besides yourselves with worry as he ran the pile of unpaid bills up to $16B.
You know — you’re not very good at whatever it is you think you’re doing.
Comment by wordslinger Monday, Feb 11, 19 @ 11:31 am
Well as Rich did point out “All of these (proposed taxes) revenue sources combined couldn’t plug the state’s $3 billion deficit.” It is correct there will not be any new graduated income tax revenue nor marijuana tax revenue for a while as the Tribune indicated. So in the meantime at least the General Assembly can avoid putting of the scheduled evidence based funding increase for k-12 education of about an additional $300 million in FY 20. It is a bitter pill for school districts looking to avoid property tax increases, and funding adequacy for low wealth districts, but it is the reality of the situation.
If the additional k-12 increase goes through it is very possible we could be looking at human services cuts yet again.in Illinois in the FY 20 budget.
Comment by Rod Monday, Feb 11, 19 @ 11:36 am
=Why live here when you can pay the same tax rate in California which is a lot nicer place. =
Except for the earthquakes and the fires and the mudslides.
Comment by JoanP Monday, Feb 11, 19 @ 11:38 am
I doubt income taxes can be lowered on the middle much if at all. The median family income in Illinois is $80,000. There aren’t enough rich people and if we tax the upper income brackets at CA or NY rates, they will leave.
Comment by Anonymous Monday, Feb 11, 19 @ 11:40 am
===Retires helped to put us into this mess, and they should play a role in getting us out of it.===
How? Should they just die immediately upon retiring? Do you have any idea what you’re even saying?
Comment by Nick Name Monday, Feb 11, 19 @ 11:52 am
===Should they just die immediately upon retiring?===
Don’t argue like a child.
Comment by Rich Miller Monday, Feb 11, 19 @ 11:53 am
Iowa’s top tax rate is 8.98%,starting at around $72,000. Wisconsin’s top tax rate, 7.65%, starts at around $252,000. Minnesota’s top bracket is 9.85% and starts at around $157,000 (all above incomes/rates are for single filers).
Illinois would probably be much more generous to the rich, with the highest rate starting at $1 million. I think we need an even higher tax for incomes over $10 million/year, like 10% or slightly higher. It’s fair. We can’t keep placing more vulnerable people in harm’s way, in regards to budget cuts and revenue shortages.
Comment by Grandson of Man Monday, Feb 11, 19 @ 12:01 pm
Grandson, there is little reason for someone making $1m to stay in Illinois with your proposed tax rates. California can charge high taxes because it’s beautiful. New York is now losing high earning taxpayers as they shift to low or no tax states. The same will happen in Illinois, but at a faster rate.
Comment by Anonymous Monday, Feb 11, 19 @ 12:08 pm
I guess Rep. McSweeney didn’t get the news that California, on its own, is fifth in the world in GDP.
Only the United States, China, Japan and Germany have larger economies.
California has a higher GDP than the next-largest national economy, the UK, with just 60% of the UK’s population.
Comment by wordslinger Monday, Feb 11, 19 @ 12:15 pm
There you go again Grandson. What are sales taxes, real estate taxes, gas taxes, etc. in those other states?
Comment by Pick a Name Monday, Feb 11, 19 @ 12:40 pm
===What are sales taxes, real estate taxes, gas taxes, etc. in those other states?===
(Sigh)
===Illinois would probably be much more generous to the rich, with the highest rate starting at $1 million. I think we need an even higher tax for incomes over $10 million/year, like 10% or slightly higher. It’s fair. We can’t keep placing more vulnerable people in harm’s way, in regards to budget cuts and revenue shortages.===
While we don’t know, no one knows, where the brackets may fall, the premise of $1 million if that were the highest bracket, its still more generous that Wisconsin in that scenario.
How can anyone “go again” when we have no idea what the brackets are.
The premise suggested is more generous. I have no idea if that will be the brackets.
Comment by Oswego Willy Monday, Feb 11, 19 @ 12:45 pm
==variable exemption tied to income would not pass muster. == Yeah but…how is the current system flat ? I just made out my taxes. I owe zero $ for an effective tax rate of 0%, because I can exclude all of my retirement income(sorry for those that choke on that fact). If I can exclude one type of income but not others, that creates an infinite set of effective tax rates depending on how much taxable income I have. There are various deductions which also result in different effective rates. So why can’t the exemptions be varied ? Seems that the current system is only flat on the resulting taxable income. We already play games on what is taxable.
Comment by Anotheretiree Monday, Feb 11, 19 @ 12:48 pm
When determining taxable income, does Illinois let you to deduct your income taxes paid to the federal government like Iowa? Or, up until this year, deduct your itemized deductions like in Minnesota?
Tax brackets only tell part of the story. Property taxes tell the other.
Comment by City Zen Monday, Feb 11, 19 @ 12:56 pm
Income tax increase is almost a given and the retiree income is to juicy to pass up, but that could kick off an accelerated exodus to warmer clime like Missouri or Indiana (snark) Seriously there will be lots of older folks that wanted to live out their days in the Land of Lincold that will just say they have had enough pack up the mini van and head out.
Comment by theCardinal Monday, Feb 11, 19 @ 1:45 pm
Cardinal, retired folks are fleeing in large numbers without being taxes, it will be a true Exodus with one.
Comment by Anonymous Monday, Feb 11, 19 @ 1:50 pm
theCardinal,
When I look at the property tax difference between my house and a similarly priced home in Tennessee (which also doesn’t tax retirement income btw), I will take the $7,000 difference in property taxes.
Part of what drove my folks to AZ (besides the weather) was the difference in property taxes. IMHO you are staying retired here for income tax purposes if you live in Cook or the collar counties. You are staying here because that is where the kids are or because you can’t sell the house.
Comment by OneMan Monday, Feb 11, 19 @ 1:52 pm
–New York is now losing high earning taxpayers as they shift to low or no tax states. –
Sure they are. That was Cuomo’s excuse for low-balling his deficit before the election.
Because you can make earn whatever you want, wherever you want, whenever you want.
Must be a buyer’s market for real estate with all those high earners leaving. I guess that explains how Griff got his new NYC crib for the low, low price of $238 million.
Comment by wordslinger Monday, Feb 11, 19 @ 2:56 pm
Griff is the wealthiest guy in IL, even wealthier than Jay Robert.
He can easily afford the $238 mil.
Comment by Pick a Name Monday, Feb 11, 19 @ 3:05 pm
So is the current argument that there are many people now making $1M+ per year in Illinois who could and would just up and move to California for an equivalent job at any time, but they don’t because the income tax here is lower?
Comment by LXB Monday, Feb 11, 19 @ 3:36 pm
“There you go again Grandson. What are sales taxes, real estate taxes, gas taxes, etc. in those other states?”
That’s actually the point for having a graduated income tax: state and local taxes are highest for the lowest and middle incomes in Illinois. We need to shift the SALT burden more on to the wealthiest, who pay the smallest percentage of their incomes in SALT.
If it gets on the 2020 ballot, voters will decide. Can’t ask for more than that, in this state with its constitution. If it’s so hard to pass with voters, why are some people so afraid to let the voters have the final say?
Comment by Grandson of Man Monday, Feb 11, 19 @ 3:43 pm