Dupage Policy Journal

For residents of DuPage County, where nearly 1,000 jobs were lost recently before the current crisis and where the COVID-19 pandemic may take 131,853 more Illinois jobs, Gov. Pritzker's progressive tax system, or “fair tax,” may not make sense or seem fair. 

That may become particularly true if Pritzker's“fair tax” wins voter approval, as DuPage county middle-income families stand to lose a projected $3,500 annually.

Despite Governor Pritzker’s insistence to the contrary, his fair tax plan is not a tax on the affluent only and may instead cost the state approximately 286,000 jobs—7,700 of them in DuPage County due to Chicago having more industry than other areas.

After the Governor’s Office of Management and Budget released (GOMB) revised revenue projections for the 2019-2020 fiscal year and the 2020-2021 fiscal years on April 16, the Illinois Business Alliance issued a statement  focusing on why the graduated income tax amendment is bad for Illinois, and therefore bad for DuPage.

The state’s revised estimates project that general funds for 2020 fiscal year will be $2.7 billion below the estimated $36.9 billion given in February. They also show that "fiscal year 2021 general funds state source revenue estimates are being revised $4.6 billion down from an estimated state source base revenue estimate of $38.5 billion.”

During a daily press conference focusing on the COVID-19 pandemic, a reporter asked Illinois Gov. J.B. Pritzker if, given those numbers and the current situation, it was time to rethink the progressive income tax, and perhaps remove it from the ballot.

His response was forceful.

"Look, it's on the ballot for November. I think people will be making their own decision about it. I would argue, in a way, that we may need it now more than ever. This isn't just about one year. It's about fixing the structural deficit that exists for the state,” said Pritzker. “We're in a pandemic. We're in an emergency. This crisis is causing a significant disruption to our fiscal year coming up. But we have many years ahead, and I think a fairer tax system makes sense to me."

The organization issued a statement in response on April 16:

"The governor announced that he is forging ahead with his plans to raise taxes on businesses, including small businesses, and will not work with the General Assembly to remove the graduated income tax amendment from the November ballot,” said IBA President Jared D. Carl. "We had hoped Gov. Pritzker would show compassion toward the struggling business owners, job creators and employees across Illinois who are doing their part to help defeat the COVID-19 pandemic. Instead, Gov. Pritzker's statement illustrates the vast disconnect between those feeling the intense pain of the economic shutdown and the politicians and ideologues leveraging the crisis for political gain.”

The state is in fiscal trouble driven by unfunded pension and retirement health care liability. Fitch Ratings noted that the pension contributions are a “structural weakness” in the state, and would remain so, regardless of the income tax amendment vote.

Additionally, the IBA notes that it is unfair to raise taxes on businesses during an economic downturn. With businesses closed due to the COVID-19 pandemic, hundreds of thousands are out of work, and the state’s economy is suffering. 

DuPage county is suffering along with other Illinois counties through the crisis.

The progressive tax may add to DuPage's estimated 4,671 jobs lost due to COVID-19 from March 16-18 alone. Now is not the time to push a tax increase onto the businesses and residents of an already struggling county, the IBA said.

County businesses should be able to focus on recovering and reinvesting in their workforces, not trying to figure out how to handle a tax increase, said the IBA.