For well over a decade, State Senator Don Harmon (D-Oak Park) had pushed to get a constitutional amendment on the ballot that, if approved, would allow Illinois to enact a graduated income tax in which higher earners are taxed at a higher rate than those who make less. Currently, the Illinois Constitution requires that the state income tax be flat rate. Last year the General Assembly finally put a proposed constitutional amendment on the ballot. With billionaire Gov. J.B, Pritzker nearly singlehandedly bankrolling the Vote Yes campaign, proponents were optimistic.
But when voters had their say at the ballot box, the so called “Fair Tax” amendment was decisively defeated getting only 45.5 percent of the vote, far short of the 60 percent yes vote required to change the constitution. With 99 percent of the vote counted, 474,161 more people voted against the amendment than voted for it.
“Obviously I’m disappointed. Illinois had a chance to take a step toward financial stability and property tax relief and didn’t take it,” Harmon said in a statement sent to Wednesday Journal. “But the voters have spoken. That’s the way democracy works. I will work with the governor and my colleagues to figure out our next moves. Clearly we need to look at making sure that our overall tax structure is as fair for working families as we can make it.”
The amendment fared well in Oak Park where 72.41 percent of voters voted yes. But it was a different story in River Forest where 52.83 percent of voters voted against the amendment.
The battle over the constitutional amendment was an expensive battle between two of Illinois’ richest billionaires who funded expensive and nearly nonstop television ads and direct mail campaigns on both sides of the issue for the last month.
Pritzker bankrolled the Yes campaign putting $56 million of his own money behind the campaign. But hedge fund operator Ken Griffin nearly matched Pritzker dollar for dollar, putting $54 million of his own money into the Coalition to Stop the Tax Hike Amendment, flooding the airwaves over the last month or so.
Supporters of the amendment argued that those who make more money should pay a greater share of their income in taxes while advertisements against the amendment said that it was dangerous to give what they termed “Springfield politicians” any more power to tax. They also argued that a graduated income tax would harm the economy. They also suggested that the amendment would lead to the state taxing retirement income. Nothing in the amendment affected retirement income. Whether to tax retirement income or not is purely a matter for the state legislature and governor.
With the amendment defeated, the state’s leaders must look for other ways to reduce an $8 million budget deficit. An increase in the state’s current flat income tax rate of 4.95 percent and/or spending cuts have been mentioned as possibilities.
Harmon, now the State Senate president, is hoping for more support from the federal government, a more realistic possibility with Joe Biden as president.
“At the same time, this underscores yet again the need for help from Washington,” Harmon said. “The unfortunate reality is that the government of the United States of America has yet to help the 50 states of this great country cope with the economic fallout caused by this global health crisis and Washington’s inability to have a national containment strategy. I hope the new administration will be better for all of us.”