I love to say I told you so, but I’ll also admit to being surprised.
Last Wednesday’s column previewing Gov. JB Pritzker’s budget address (delivered today) made the bold prediction we’d hear nothing about the income tax hike threatened in 2020 before voters rejected the graduated tax amendment. As details of the budget trickled out Monday, I was proven correct. Obviously, given this is an election year.
What I hadn’t been able to guess was Pritzker’s attempt to woo voters would include lowering Illinoisans’ tax burden through freezes and rebates affecting grocery and gasoline purchases and property taxes. Altogether the idea is to promote direct consumer savings of $1 billion. It’s something any candidate could propose but only the incumbent can deliver before election day.
Politically, the idea presents two significant challenges.
The first is procedural: we still need the money. Setting aside systemic challenges like pension debt, the unemployment insurance trust fund and the annual need to increase spending for things such as education and child welfare, this grand plan either amounts to a budgetary shell game or it seriously threatens local spending.
Like property taxes, grocery tax revenue funds ultimately stay in the community where they’re collected. Cities, counties, schools and other local bodies rely on these revenue streams to keep operating. Deputy Gov. Andy Manar, in interviews promoting the plan, said the $360 million in grocery tax revenue can still funnel to municipalities from elsewhere in the state budget. Property tax rebates are pegged at $475 million. Taxpayers are both Peter and Paul in these scenarios.
Pritzker proposes stalling a scheduled gas tax increase of 2 cents per gallon. That’s $135 million, framed as either savings to drivers or subtraction from infrastructure spending. Manar pledged the overall program remains on track and the delayed tax hike wouldn’t stall any current projects. But the cost of road and bridge projects perpetually increases, so any deferrals are just going to mean larger expenses eventually.
The other challenge is perception. Inflation has already taken hold, so removing a 1% sales tax might not feel significant at the register. At the gas pump, the story is, “I used to want this to cost you more but right now seems like a bad time so it won’t until later.” Is that a winning message?
The property tax rebate would apply to people who earn $250,000 as individuals or $500,000 as a couple. The property tax rebate is capped at $300. Is that enough to woo voters opposed to Pritzker on policy grounds?
Government and politics are never more conflated than during an election year. Whether this plan is a good step in either direction certainly remains to be seen — as does whether lawmakers will play along.
• Scott T. Holland writes about state government issues for Shaw Media. Follow him on Twitter @sth749. He can be reached at sholland@shawmedia.com.
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