Illinois Gov. J.B. Pritzker and lawmakers are touting a one-time, $556 tax break for the average family, but full disclosure should include the $2,721 more in taxes imposed by them during Pritzker’s term. Subtract the temporary tax break from the permanent tax increases and government under Pritzker will eat $2,165 more of the average family’s income.
But wait, there’s more: Pritzker campaigned for governor on the promise of substantive property tax relief for Illinois families. They’ve averaged $1,913 more paid in property taxes under his administration.
The $556 in temporary cuts were packaged in the 2023 state budget, which at $46.5 billion is the most Illinois has ever spent. Even bolstered by billions in federal pandemic relief, state leaders still plan to spend more than they are projected to take in and continue a perfect record of budget deficits stretching back 21 years, according to an Illinois Policy Institute analysis.
Illinoisans pay the highest tax burden in the nation with the median family giving nearly 17% of everything they make in a year to taxes. The same family would pay less than 10% of their income living in 30 other states.
Pritzker’s administration is positioning itself as an election-year giver of tax cuts and rebates, but getting $556 for one year is overwhelmed when the average Illinois household paid roughly $680 more in taxes each year. The money went towards higher state and local gas taxes, vehicle registration fees, parking garage taxes and online sales tax as part of 24 tax and fee increases signed by Pritzker.
Included in Pritzker’s temporary, election-year relief is:
-A one-year suspension of Illinois’ 1% grocery tax – a tax 37 other states don’t impose on the need to eat.
-A six-month delay in the next automatic gas tax hike, a mechanism Pritzker included in 2019 when he doubled the state gas tax to 38 cents from 19 cents.
-An expansion of the Earned Income Tax Credit for low-income residents, making it more generous and available to more workers. This is the only permanent tax change.
-A one time income tax credit for joint filers making up to $400,000, worth $100 in tax for joint filers plus an additional $100 per child.
-A one-time, $300 property tax rebate for state residents.
The main culprit behind high taxes in Illinois is pensions, which take up 26% of Illinois’ budget – the most of any state. Permanent tax relief for residents is impossible without constitutional pension reform.
A “hold harmless” pension reform plan developed by the Illinois Policy Institute would save the state $2.4 billion in the first year and more than $50 billion by 2045. It fully eliminates pension debt in that time while preserving all promised benefits to public employees for work already performed.
It would put Illinois on the fiscal footing to permanently lower state income taxes – and do it next year. That is a promise of direct relief to struggling families that lasts long after the polls close.