Illinois Gov. JB Pritzker threatened severe cuts to the state budget if the “fair tax” constitutional amendment he invested so deeply in failed. As we know, voters soundly rejected the proposal in the Nov. 3 General Election.
True to his word, on Tuesday, the governor announced $711.2 million of an expected $3.9 billion in cuts needed to cover the revenue shortfall in the current fiscal year’s budget. Pritzker said about $2 billion of this year’s shortfall is due to the COVID-19 pandemic, which has drastically cut into state revenues.
The first wave of reductions will impact most state departments, which, in turn, should affect every Illinois citizen. But citizens and lawmakers shouldn’t squawk about the cuts. Voters had their say on the proposed amendment knowing the alternative was massive budget cuts. And lawmakers own this mess, and need to be a major part of the fix.
Still, this is a budget exercise the governor should have done before proposing the fair tax amendment in the first place. Most of the cuts he made on Tuesday could, and should, have been made before proposing the fair tax. If he had, maybe the proposal would have been a more palatable offer for voters.
For some perspective, the governor made a personal $50-million donation toward efforts to pass the fair tax constitutional amendment. The proposal was meant to remove a requirement for a flat tax on income, and tax millionaires at a higher rate than households making less than $250,000 per year. Income taxes on the richest 3% would raise an additional $3.6 billion annually, supporters said. That’s pretty close to this year’s revenue shortfall.
The Legislature now retains the power to change income tax rates. Since 2010, it increased the state’s tax rate to 5% from 2011 through 2014; then it was reduced to 3.75% from 2015 to June 30, 2017; then it was increased to the current 4.95% level. A likely problem voters had with the proposed amendment was it did not prevent the Legislature from raising income tax rates, and, in fact, the fair tax amendment proposal made it easier for them to do just that.
As nearly every business and household has learned in 2020, to succeed, let alone survive, every dollar spent and earned needs to be reviewed. No expense can go unchallenged. And in a state that’s in as sorry a financial predicament as Illinois, that means hard work, but work that must be done.
It’s also work that should have been done decades ago under House Speaker Mike Madigan’s watch. Madigan has done nothing to make Illinois a more livable state.
Pritzker said on Tuesday he is starting the cost-cutting with actions he can make without legislative approval. “This is going to be tough,” he said. “And as my ongoing conversations with General Assembly leaders would indicate, there is a great deal of work the legislature must do when it convenes next month.”
Pritzker said his office is negotiating with labor unions to identify $75 million in personnel cost reductions, which could include furloughs, according to Capitol News Illinois. He is also working to identify possible closures of Department of Corrections facilities due to lower inmate populations.
Pritzker plans hiring freezes at several state agencies as well as reductions or freezes in several grant programs at the Department of Commerce and Economic Opportunity, the Department of Agriculture and the Department of Natural Resources, CNI reported.
We hope the governor and the Legislature don’t try to prevent more cuts by increasing state taxes. Doing so will only impact the poor and middle class he was trying to help with the proposed fair tax amendment. Raising income, and property, taxes is also how we got to the point where Illinois is among the top five states for out-migration.
And we need to stop the partisan politics. It will only make matters worse. For example, after Pritzker announced the first wave of cuts on Tuesday, he and Republicans in the Legislature quickly accused each other of not providing actionable answers to the state’s budget woes. The problems are clear and both sides should take ownership for their role in overspending and poor leadership. It’s a message we bring up repeatedly, but is not heeded.
So, we look forward to watching Pritzker as he makes the remainder of his budget cuts. The toll will be steep and Madigan’s apostles will try to keep their patronage army safe, but the cuts must be made.
It will be a bloody lesson for us all.