Illinois lawmakers offer voters a tax hike, let deadline pass for constitutional reforms

Only Gov. J.B. Pritzker’s progressive income tax amendment will appear on the ballot in November. Voters were denied a chance to make critical reforms to state government.

Voters on Nov. 3 will decide whether Illinois lawmakers should gain greater power to raise income taxes but will not get to choose any reforms to the state’s fiscal mess or culture of corruption.

State lawmakers missed the deadline May 3 to include constitutional amendments other than the tax increase on the ballot. While there will be no reforms from which to choose, lawmakers last spring did decided to ask voters to change the state’s income tax structure from a flat tax to a graduated income tax. If voters approve the “fair tax,” lawmakers would gain greater power to divide and conquer taxpayers: imposing higher rates on smaller groups of residents without the political fallout from raising everyone’s taxes at once.

The General Assembly has not met since early March because of the COVID-19 pandemic. Yet, between their inauguration Jan. 9, 2019, until March lawmakers choose not to ask voters for common-sense constitutional amendments that could have reformed problems that have dragged Illinois down for decades. Here are the reforms voters are missing.

Fair maps

A fair maps amendment would have been timely. In 2021, lawmakers will be tasked with redrawing the state’s legislative maps using information from the 2020 Census. Illinois is one of 35 states that permits state lawmakers to draw their own legislative districts.

Allowing lawmakers to shape their own districts lets them pick their voters, weighting it in favor of their own party and discouraging challengers that give voters a choice. In 2018, nearly half of the seats in the Illinois House and a slight majority of those in the Senate up for re-election faced no opponent.

Both the House and Senate must approve a map, which the governor may then veto or sign into law. If state lawmakers can’t get a map to the finish line, party leadership appoints an eight-member committee to hash things out. If the committee can’t agree on a map, the secretary of state appoints a tiebreaking ninth partisan by random chance. Whichever party wins the lottery for the ninth seat then draws the map.

Gov. J.B. Pritzker had pledged his support for fair maps as a candidate and as a businessman even donated to a non-profit involved in the issue. Missing an opportunity that had strong bipartisan support will hurt Illinois voters for the next decade.

Pension reform

While an amendment making it easier to hike taxes is on the ballot, an amendment that would fix Illinois’ biggest cost driver and cut taxes is not. Once again, voters will not be able to vote for pension reform in November.

Illinois needs a constitutional amendment that protects earned benefits but allows for changes to future, unearned retirement benefits. The state already has the worst pension crisis in America, an unfunded pension debt of somewhere between $137 billion and $241 billion.

Pensions consume over 25% of the state’s budget each year. Without reform, it will keep growing, becoming more unsustainable each year and crowding out more of the services taxpayers expect.

An actuarial analysis commissioned by the Illinois Policy Institute found that a constitutional amendment allowing reforms to slow the growth in future pension benefits – without taking away what retirees and current workers have already earned – could result in an average of $2 billion in budgetary savings during each of the next 10 years. Savings from now until 2045 would be more than $50 billion. The following year pension costs would fall back to historic single-digit levels as a percent of the budget, because the debt would be fully eliminated.

A recent poll from Southern Illinois University showed there is broad support for pension reform in Illinois. It found 55% of Illinois voters believed supporting pension reform that protects already earned benefits by current retirees but reduces future benefits for those yet to retire was a good idea, while just 37% were opposed.

A solution such as a federal bailout simply delays the problem. A small reform was achieved in the fall by consolidating municipal police and fire accounts. The consolidation bill left savings on the table by failing to consolidate administrative functions of the various pension systems and only touched 5.5% of the debt burden to begin with.

There is clearly support for pension reform in Illinois, giving lawmakers the green light to act. Voters understand Illinois’ current pension crisis cannot be sustained and cannot be fixed without constitutional pension reform.

Term limits

Every election year, voters are reminded of the need for term limits when they again see the same politicians running for the same offices. The General Assembly could fix the problem by placing a constitutional amendment on the ballot to enact term limits.

Illinois is one of only 14 states without some form of term limits for state lawmakers and the statewide elected offices of governor, lieutenant governor, secretary of state, attorney general, treasurer, auditor general and comptroller. Polling has shown term limits to be very popular among voters.

At the beginning of the 101st General Assembly in January 2019, state Rep. Tim Butler, R-Springfield, filed a constitutional amendment to put term limits on legislative leaders at a maximum of eight years in a single office and 12 years in a combination of leadership roles. The amendment never advanced.

House Speaker Michael Madigan’s career in the General Assembly shows just how much term limits on legislative leaders are needed. Madigan has served as speaker for 34 of the past 36 years and is currently on his 18th term.

For term limits to even see the ballot, the same legislators who would lose their leadership roles were the amendment to pass must approve it. Madigan himself has a heavy influence on the Rules Committee, which is the first step any bill takes in the legislative process. He can easily kill any bill or resolution that would limit his power.

On his way out of Chicago to a new job in Washington, D.C., the former head of the FBI’s Chicago field office, Jeffrey Sallet, told WGN-TV in an interview that Illinois needs term limits to stop corruption. Sallet said when elected leaders are allowed to remain in office longer, they accumulate and abuse power more often.

Balanced budget requirement

Illinois’ constitution already requires the General Assembly to pass a balanced budget. This requirement is very weak, however. The constitution reads: “Appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.”

The word “estimated” is key. The requirement applies to the budget planning stage and does not require the budget to actually balance at the end of the year. This allows for numerous budget gimmicks, including overestimating revenue and underestimating expenditures.

Illinois has not had a balanced budget since 2001. Year after year of bad budget planning continues to cause the state’s financial issues to pile up.

In January, state Rep. Jaime M. Andrade Jr., D-Chicago, filed House Bill 4039, which aimed to refine how lawmakers can estimate revenue in the budget process. It defines revenue sources as “taxes, fees, and federal transfers” and would prohibit debt and additional funds already in state government from being counted. Additionally, it creates a statutory requirement that expenditures cannot exceed revenue in practice, strengthening the constitution’s “planning only” balanced budget requirement.

Spending cap

A very basic way lawmakers could better control spending would be through a spending cap. The concept is simple: growth in state spending cannot surpass the rate of growth of Illinois’ economy.

State leaders simply spend more than they receive, then hike taxes to cover their overspending. However, because spending outpaces economic growth, taxpayers are harmed trying to keep up with taxes that eat ever-larger shares of their income. The tax-and-spend cycle continues.

In February, state Sen. Tom Cullerton, D-Villa Park, proposed a constitutional spending cap. In Cullerton’s DuPage and Cook County district, state spending has grown 57% faster than personal income. Statewide, spending growth outpaced income growth by an average annual rate of 48% between 2007 and 2017.

Illinoisans deserve better than to be constantly asked to pay more in taxes to fulfill irresponsible budgeting and spending. Illinois should tie state spending growth to the growth of regular people’s income.

Tax hike without reforms

Spending caps, a balanced budget requirement, term limits, pension reform and fair maps all could have been on the Nov. 3 ballot and given Illinois a chance to fix its future without begging the federal government to save it.

Instead, Illinoisans will be asked to vote for billions more in new taxes, and those taxes will hit more than 100,000 small businesses – Illinois’ most prolific job creators – right as they try to recover from the COVID-19 recession.