Friday, March 8, 2019

Alliance Legislative Report 101-08

GOVERNOR PRITZKER UNVEILS PLANS FOR GRADUATED INCOME TAX

On the campaign trail and in his Fiscal Year 2020 Budget Address to the Illinois General Assembly, Governor JB Pritzker has made his case for Illinois to adopt a graduated income tax. Until Thursday, this was just a general concept without any specific rates identified. This week, the governor revealed a plan that would slightly lower the income tax rate for households making under $100,000 and keeps in place the current 4.95% income tax rate for households making between $100,000 and $250,000. The increased rate starts at incomes greater than $250,000 and tops out at incomes greater than $1,000,000 with a tax rate of 7.95%. For a more detailed breakdown, you can find Governor Pritzker’s plan here.

The plan is estimated to provide a savings for 97 percent of taxpayers and raise additional revenues of $3.4 billion per year. While the projected revenues would be a significant increase, to put it in perspective, earlier this year the Illinois State Board Education (ISBE) proposed an education budget increase of $7.2 billion to adequately fund all schools.

Currently, the Illinois Constitution bans anything other than a “non-graduated” income tax. For the governor to be able to make the changes he wants to the Illinois Constitution, he will need help from the General Assembly and voters. To make a change to the Illinois Constitution, three-fifths (a super majority) of legislators in both the House of Representatives and the Senate would need to approve the language for the constitutional change. Democrats currently have super majorities in the House and the Senate, but it may not be so easy to get all members on board with a constitutional change, which are typically more difficult to pass than normal pieces of legislation. If three-fifths of the General Assembly give the green light, the question would be submitted to the voters. For a constitutional change to become law, three-fifths of voters on the question, or a majority of all ballots cast would have to affirm the change. While there are still some questions as to what the exact language presented will be, it is clear that the debate around a move to a graduated income tax is just beginning.

TEACHER MINIMUM SALARY BILLS ON THE MOVE

Senate Bill 10 (Manar, D-Bunker Hill) was advanced to 3rd Reading in the Senate earlier this week. The procedural maneuver means that SB 10 could be called for a final vote at any time the Senate is in session. Across the rotunda, a House committee approved the same minimum teacher salary language in House Bill 2078 (Stuart, D-Collinsville). With bills moving in both chambers, it is important for school board members and administrators to reach out to General Assembly members to urge opposition. For additional information on minimum teacher salary language, click here.

Click here to read the entire Alliance Legislative Report 101-08, including information on bills currently under discussion by Illinois lawmakers.