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PRITZKER’S
RECORD: 24 TAX, FEE HIKES TAKING $5.24 BILLION MORE FROM ILLINOISANS
Illinois Policy Institute/
Adam Schuster
Gov. J.B. Pritzker has added more than
$5.24 billion in new or higher taxes and fees since taking office.
Despite all that new revenue, the nation’s highest taxed state remains a
fiscal mess unable to balance a budget for 21 years. |
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When Gov. J.B Pritzker first announced his candidacy for
governorship back in 2018, he campaigned on the notion Illinois should “think
big.”
What he failed to mention is how much his big thinking would cost taxpayers.
Less than three years into his term, the price tag is $5.24 billion for the 24
new or increased taxes and fees Pritzker has championed.
That amount would have ballooned by another $3 billion had Pritzker been able to
deliver on his other campaign promise to impose a progressive state income tax.
Voters in November soundly rejected his plan.
Illinoisans have watched as state taxes and fees on gas, vehicle registration,
parking, marijuana, gambling, online shopping and businesses have risen rapidly
under the Pritzker administration.
Residents paid more than neighboring states when gas taxes were 19 cents per
gallon, but then Pritzker doubled the state gas tax to 38 cents per gallon. The
rate is now 39.2 cents thanks to automatic inflationary increases state leaders
built into the tax hike so they never again need to take an unpopular vote to
raise the gas tax. Before the hike, Illinois was No. 10 in the U.S. for gas
taxes, but now it is No. 2.
Similarly, Illinoisans can now expect to pay the nation’s highest base
registration fee and the fifth-highest overall fee for vehicle registration. The
state earned these superlatives when Pritzker increased registration costs for
standard vehicles from $98 to $148 and all other large vehicles by $100 in
January 2020.
Pritzker passed a comparable rate hike on purchasing license plates for utility
trailers, which bumped the fee to $118 from $18 in 2019. Significant resistance
to the increase spurred a new measure that Pritzker just signed, reducing the
fee to $36. That same measure also repealed a provision Pritzker included in his
2019 capital plan that resulted in double taxation on vehicle trade-ins worth
more than $10,000, which had generated significant opposition.
Pritzker justified raising taxes and fees by saying they would balance state
budgets and fund his $45 billion infrastructure plan.
The balance has never materialized.
The $42.3 billion budget passed June 1 marks the 21st consecutive year in which
Illinois lawmakers failed to balance the state budget. Despite introducing $655
million worth of new taxes and fees and receiving $8.1 billion in federal aid in
2021, the Illinois General Assembly passed a budget this year that was
underfunded by at least $482 million.
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Adding that $655 million in new taxes this year was
especially damaging because the taxes were aimed at job creators as
they struggle to recover from the COVID-19 economic downturn and as
Illinois has been especially slow to get people back to work.
Illinois unemployment has remained at 7.1% since March as the rest
of the nation quickly recovers. As disappointing as that is,
unemployed Black Illinoisans have seen unemployment worsen in the
past year to 15.9% – more than three times the rate of their white
counterparts.
Prior to the taxes enacted this year, the average Illinoisan already
faced the highest total state and local tax burden in the nation.
Pritzker also campaigned on a new capital plan for Illinois,
originally proposing $41.5 billion for his “Rebuild Illinois” plan.
The plan passed by the General Assembly spent even more, at $45
billion over six years. It was riddled with over $1.4 billion in
pork projects such as pickleball courts, dog parks and funding for a
shuttered, privately owned theater.
Senate Democrats said $33.2 billion of the total would go to
transportation infrastructure, such as roads and bridges. Lawmakers
refer to those projects as “horizontal” infrastructure spending. The
plan also allocated billions of dollars for new spending on
buildings such as state facilities and public universities. The bulk
of funding for this “vertical” infrastructure comes from expanded
gambling.
On the plus side, Pritzker just signed legislation to make
infrastructure spending more transparent and prioritize spending
based on scores for need and cost-effectiveness. It should reduce
Illinois’ long tradition of lawmakers basing spending on which
projects they can use as a photo op. Unfortunately, it will not
apply to much of the Rebuild Illinois spending for projects that
have already begun or been selected. The legislation requires a
cost-benefit analysis for projects selected by the state
transportation department on or after Jan. 1, 2022.
A decade ago, Illinois leaders raised taxes during the recovery from
the Great Recession. Tax hikes coupled with declining government
services resulted in lower investment and sluggish productivity and
employment growth, contributing to the state’s lackluster recovery
relative to its peers.=
It is hard to believe Pritzker would repeat that mistake, but state
leaders again raised taxes on Illinoisans still recovering from the
COVID-19 pandemic. Twenty-four tax hikes in less than three years:
Is Illinois any better off with $5.24 billion in new taxes? |
