Corruption eruption invites a Democratic tax debacle
Fifty weeks before voters say yea or nay to Democrats’ plan for a graduated income tax that would rake in new dollars by the billions, here’s what the people of Illinois see:
■ Citizens see federal agents ripping at the innards of Illinois governance and politics. From clout artists at Chicago’s City Hall to lobbyists for a big utility to one state legislator who allegedly tried to bribe another, the feds are exploring how bills pass, how favors flow and how politicians scam their fellow citizens. These are individual cases, for now. But the intensifying percussion of warrants, raids and wiretaps reinforces the impression that corruption runs rampant here. Each alleged wrongdoing reeks of greed and personal privilege.
■ Citizens also see that several of the Democrats tainted by these scandals played roles in raising income taxes, property taxes, gasoline taxes and so on. Yet their serial tax increases never are enough to cover all the spending and borrowing. Witness the abject failure of the last two income tax increases, imposed in 2011 and 2017, to be the grand financial fixes that lawmakers had assured all of us.
■ Citizens see, and absorb as never before, the enormous burden of public pensions and other government spending here. The $10,000 limit on federal income tax deductions for state and local taxes encourages more families to join the Illinois Exodus: Why wait for the next drop in house values here? And why pay ever-higher taxes to cover astonishing overhead costs conjured by the Illinois culture of political sleaze?
Will more billion$ somehow reform Illinois politicians?
Against this sorry backdrop — the certainty of ever more tax gouges, the worsening corruption eruption — Gov. J.B. Pritzker and his fellow Democrats want voters to approve their open-ended amendment to enable graduated income taxes. Higher tax rates would hit big earners first. What lawmakers refuse to admit publicly — just try asking them — is that they’ll next raise rates on middle-class taxpayers, too. That’s where the real money is.
Pritzker & Co. are relying on voters to trust — trust! — that with graduated rates sucking more money out of people’s takehome pay, a suddenly honorable Springfield would steward taxpayer dollars with legislative integrity and spending restraint.
We won’t predict how voters will react to that dubious sales pitch. We are, though, pleased to stand with all the cheated Illinois taxpayers (1) who don’t believe government here will magically turn trustworthy, and (2) who want Illinois just once to attack the spending side of the ledger — especially by reforming public pensions.
The next year is, then, a fraught time for the ruling Democrats. Scandal tarnishes their brand. Yet in Chicago and in Springfield, they’ve committed to so much past, present and future spending that they have no choice but to keep proposing … more and higher taxes.
This desperate search for revenue now invites a Democratic tax debacle, with rival city and state factions competing to grab those fresh billions of dollars.
FBI raids weren’t in the ‘Pritzker Tax’ playbook
When Democratic lawmakers put their graduated-rates amendment on the November 2020 ballot, they hoped not to breathe the word “taxes” until somnolent voters approved the game-changing measure. To anesthetize testy taxpayers, they formed a Property Tax Relief Task Force — as if they really, really want to offset rising income taxes with a sop to gullible saps.
Ever since that heady springtime, it’s been little but bad news for what Pritzker calls the Fair Tax.
Federal agents and prosecutors likely didn’t set out to show Illinoisans how corruptly some of their governments exploit their interests. Whom do you expect the feds to indict next?
Here, of course, what’s legal can be as offensive as what’s illegal. Hence the public’s disgust when word spread that, because Springfield refuses to seriously confront its retirement benefits crisis, state government’s unfunded pension obligations have risen by another $3 billion, to $137 billion. Of course, that’s the math of bureaucrats who answer to Illinois politicians. The independent numbers crunchers at Moody’s Investors Service instead put the shortfall — taxpayers are on the hook for every penny — at $240 billion.
Yet you’re supposed to give Springfield’s swift money managers more tax dollars?
Pritzker’s own Office of Management and Budget telegraphed what we took as panic about the tax amendment’s prospects when it skewed a required annual report to lobby for the Pritzker Tax. Voter refusal, the supposedly impartial report warned, could bring “dramatic budget cuts of approximately 15% to many essential services such as education funding and public safety” — or maybe, yes, yet another income tax hike.
(Private note to state finance officials: Don’t soil government reports with threats that scream, “Governor, how’d we do?”)
The Lori Lightfoot complication
Chicagoans are about to learn how their mayor wants to meet the high costs of school district and City Hall spending. During their fall veto session, Pritzker and legislators didn’t fulfill her requests for legislation to enable future revenue from a casino, or from a revised real estate transfer tax.
Springfield lawmakers and their apologists see Lightfoot as a naif who doesn’t know how to play their game. We see her as a mayor who now may have to raise property taxes, and who owes Pritzker & Co. no fealty whatsoever. If fed-up Chicagoans see higher city taxes as a reason to reject the Pritzker Tax, will Lightfoot break a sweat trying to change their minds?
Put it all together. Here’s what the people of Chicago and Illinois are hearing incessantly: Hi, I’m (taxes) a Democratic official (taxes), and we (taxes) just hate to (taxes) raise your, um, taxes. But we have (taxes) no choice.
Oh — that Property Tax Relief Task Force, the eyewash? For now you can fuggedaboudit. Task force members blew their Oct. 31 deadline to give Pritzker and the General Assembly their initial recommendations. The veto session ended and nothing at all happened.
Why not? Republicans blame Democrats for showing zero interest in property tax reform, which in theory could restrict local government spending. Can’t have that.
Why won’t Democrats ‘let the people vote’ on pension reform?
Chicago and Illinois don’t have enough taxpayers to support their governments’ cost structure. Even with about a quarter of state revenue gullywashing into the pension system, its debt only worsens.
Yet Chicago and Illinois pols always frame their support for tax increases as if major government costs are fixed, unchangeable demands that cannot be altered. That’s wrong, and it’s time the pols admitted as much. Other states have restructured major cost drivers. Why not Illinois?
When he lobbied Illinoisans to put the Pritzker Tax on the ballot, the governor told legislators to “let the people vote” on it. Why won’t he also let the people vote on an amendment that would keep inviolable the pension benefits workers already have earned, but would reduce benefits earned in the future?
Maybe the governor and the other the ruling Democrats tell themselves that because they have total control of state and city government, they’ve done something right.
Maybe they think they’ll persuade voters appalled by public corruption to ignore that and send those new billions of dollars to Springfield.
Or maybe all of that is the same selfdelusion that tells politicians they’ll be in power forever.
For now, Illinois’ corruption eruption risks a Democratic tax fiasco. If the Pritzker Tax has to suffer an embarrassing defeat before our ruling pols admit they have to reinvent government here, no problem. We’ll be pleased to help with pension reform and every other solution that helps the mistreated people of Illinois.
Pritzker & Co. are relying on voters to trust — trust! — that with graduated rates sucking more money out of people’s take-home pay, a suddenly honorable Springfield would steward taxpayer dollars with legislative integrity and spending restraint.