JANUS
DECISION MEANS SOME ILLINOIS STATE WORKERS EFFECTIVELY SEE 2017 TAX HIKE
REVERSED
Illinois Policy Institute/
Adam Schuster
The 2017 permanent income tax hike took
$732 from the median Illinois household, roughly the same as the $737
that will be returned to state workers who were previously forced to pay
“fair share” fees to government unions.
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On July 6, 2017, Illinois lawmakers voted to override Gov.
Bruce Rauner’s veto of a record-setting $5 billion permanent income tax hike.
Individual tax rates rose to 4.95 percent from 3.75 percent, and corporate taxes
jumped to 7 percent from 5.25 percent. That’s a 32 percent and 33 percent tax
hike, respectively.
One year after a record-setting tax hike the state still can’t balance a budget,
has done nothing to solve long-term fiscal problems and has further damaged its
economic growth. It’s clear that the tax hike failed to live up to the promises
made by politicians.
Worse, the tax hike meant the median Illinois household had to send an extra
$732 of its income to Springfield.
While most Illinois residents need a repeal of the tax hike to get that money
back, some state workers will see offsetting relief immediately.
On June 27, the U.S. Supreme Court declared forced union fees violate the First
Amendment rights of government workers.
Prior to the court’s decision, Illinois state workers who opted out of union
membership still had to pay “fair share” fees to the union. The average forced
union fee was $737, according to the Illinois Department of Central Management
Services.
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Now that money is already reappearing in nonunion
state workers’ paychecks, giving them a boost at no cost to
taxpayers and effectively offsetting the 2017 tax hike for their
personal finances.
Employees who opt out of the union will receive the same employment
benefits that union members receive, such as health care benefits
and retirement benefits. This is hardly a “free rider” situation –
Illinois unions fought for the right to monopoly bargaining powers
on behalf of all government workers, members and nonmembers alike.
The Janus decision gives more than 5 million government workers –
including hundreds of thousands in Illinois – a choice on where to
spend their hard-earned money, recognizing their fundamental rights
to freedom of speech and freedom of association.
Now the General Assembly needs to adopt sensible budget reforms that
can lead to a tax cut – such as a constitutional spending cap – so
the rest of Illinois taxpayers can see relief in their paychecks
too.
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