In this post, we review a new proposal by the property tax task force and the ongoing tax issue in Illinois.
Governor J.B. Pritzker, has dismissed a proposal floated by the Illinois property tax relief task force to increase the Illinois sales tax to help fund public schools.
Pritzker said of the idea “That’s not something that I am supportive of; I think there are other ways for us to go about it.”
Illinois Property Tax Task Force
The idea for an increased sales tax was included in a draft report from the 88-member property tax relief task panel.
Two task force subcommittees, chaired by the governor’s fellow Democrats, endorsed the idea of expanding the sales tax while reducing the property tax rate.
“I don’t think we can have a realistic conversation about property tax relief without addressing the need to diversify the education funding revenue stream.” said task force chairman Representative Sam Yingling.
Graduated Income Tax Proposal
Governor Pritzker is in favor of changing the Illinois flat-rate income tax to a graduated income tax rate. The current flat-rate income tax rate is enshrined in the Illinois state constitution.
The Illinois Fair Tax is a proposed amendment to the state constitution that would change the state income tax system from a flat tax to a graduated income tax.
The graduated income tax proposal will be on the November 2020 election ballot in Illinois.
Property Taxes in Illinois
A study by realtor.com determined that Illinois has second-highest property taxes in the nation.
The Illinois statewide average effective tax rate is 2.32%, nearly double the national average.
Governor Pritzker has promised to deliver tax relief to property owners in Illinois.
The issue has gone on without a solution for decades in Illinois with neither party being able to find a solution.
Other Property Tax Relief Ideas
Other ideas have been proposed besides expanding sales taxes to provide property tax relief.
New sate revenue from legal adult-use cannabis and a recommitment of 100% of Illinois Lottery revenues to schools have been proposed by St. Charles Republican Sen. Don DeWitte.
The nonpartisan budget watchdog group the Civic Federation has advocated for an expansion of the sales tax to other services combined with limiting state spending and taxing retirement income.
House Republican Leader Jim Durkin stated, “For a state that is so in need of property tax reform, the Democrats have instead proposed tax increases.”
We will have a clearer idea of the potential solutions after we have seen the results of the November ballot initiative for the Graduated Income Tax.
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