Peoria Standard

A constitutional amendment that would pave the way for Gov. J.B. Pritzker's so-called "fair tax" also would open the door for something Illinois currently does not have  – city-levied income taxes, a Chicago-based Conservative think tank recently warned.

"The Illinois Constitution currently allows larger cities to impose local income taxes, with state lawmakers' approval – but no cities in Illinois currently collect income taxes," the Illinois Policy Institute said in a report. The way would be made clear if Illinois voters approve Pritzker's "fair tax," also referred to as a "progressive tax," during the upcoming General Elections. That would be a tremendous change from how such taxes currently are levied.

"City income taxes now must be imposed on all taxpayers at the same rate," the Illinois Policy Institute report said. "Angering every voter in Chicago, Peoria or Springfield is too great a political risk and the likely reason no Illinois city has an income tax."

The statute that goes before Illinois voters during next month's general election would raise tax rates on those earning $250,000 or more from the present 4.95% to flat rates that would range from 7.75% to 7.99%. Doing that requires amendment of Illinois' Constitution.

Pritzker refers to the scheme, which he unveiled in March of last year, as a "fair tax plan that ensures 97 percent of taxpayers get tax relief and the wealthy pay their fair share." Pritzker also has offered via Fair Tax Calculator a chance for Illinoisans to see how their income taxes will change.

Pritzker also has pointed to the state's unwieldy budget deficit, in addition to pandemic-related expenses, an threatened a blanket 20% tax hike, along with a 15% cut in government services if his "fair tax" doesn't pass in November.

Opponents refer to Pritker's proposal as the “blank check amendment." Illinois' cash-strapped cities would find it too tempting not to impose their own income taxes, should the "fair tax" pass, the Illinois Policy Institute report said.

"Many Illinois cities have been under fiscal strain for years, with mounting pension debt putting pressure on budgets," the report said. "Add to that the COVID-19 economic crisis with plummeting sales tax collections and other declines in revenues, and many municipal leaders are seeking more funding sources."