Southern IL voters say they don’t regret rejecting ‘fair tax,’ even with cuts looming
Southern Illinoisans last week soundly rejected an amendment that would have eased the state’s strained budget, but even with service cuts and tax increases looming, they say they don’t regret their decisions.
Gov. J.B. Pritzker said because voters refused the graduated income tax constitutional amendment last week, Illinoisans across the board will have to bear the burden of a multi-billion dollar budget deficit caused by the COVID-19 pandemic.
If it came down to cuts alone, the burden could equate to 15% cuts across the board to services that aren’t federally protected or court-ordered. An income tax rate increase is also a possibility.
The cuts don’t sound like such a bad idea, said Noel Harnetiaux, a real estate business owner from Greenville.
“I have to say the idea of the state of Illinois cutting some of its costs is not a horrible one,” said Harnetiaux, who voted against the amendment. “I think that’s how real people and real businesses run their budgets.”
But government isn’t a business, and Illinois’ most vulnerable are the ones who will feel the pain, said Stephanie Taylor, an East St. Louis resident and founder of Community Development Sustainable Solutions, an economic development and community advocacy nonprofit.
“Who receives services? Those who are underserved,” Taylor said.
The amendment, or “fair tax” as supporters called it, would have allowed the General Assembly to tax Illinoisans who earn more than $250,000 a year at a higher rate, generating an estimated $3 billion annually. Opponents argued it was a slippery slope that would eventually result in increased taxes on the middle class and harm to small businesses.
The opposing message worked. Outside Chicago and the collar counties, the amendment failed spectacularly. Only 33% of downstate voters supported the amendment, according to an analysis of unofficial voter data by Chicago NPR affiliate WBEZ. Statewide, just 45% voted for it.
The loss dealt a political blow to a governor already struggling to convince some skeptical southern Illinoisans that his coronavirus restrictions save lives and protect public health, despite their damage to bar and restaurant business.
Pritzker expressed his frustration in a news conference Wednesday and warned of “painful” cuts.
“While the fair tax would have helped address our budget crisis with the least damage to the working families of Illinois, the millionaires and billionaires opposed it to protect their own wallets, deceiving the public about its purpose. And they ended up prevailing.”
Southern Illinois reacts to ‘fair tax’ failure
Opponents of the amendment met its failure with relief, while supporters believe it means vulnerable communities will suffer the most from cuts to government services.
“That money’s got to come from somewhere,” Taylor said about possible cuts. “Unfortunately, we know what that means.”
During the budget impasse of 2015 to 2017 under Republican Gov. Bruce Rauner, almost every sector of government spending took hits, from services for people with disabilities, to assistance for the elderly, to higher education. In East St. Louis, the impasse devastated public health services.
Pritzker promised the state “will get through this,” and said he and the General Assembly would make “fundamental structural change” to address the fiscal crisis caused by COVID-19.
Taylor hopes lawmakers will take racial equity into consideration when deciding where to cut.
“You’re talking about crime and violence in an area that’s already impacted and reeling from COVID,” Taylor said. “You’re talking about why we’re getting cuts to needed services in our community. It comes back to really educating and really asking those hard questions internally, ‘Are we here to make things equitable?’”
Taylor worries areas such as East St. Louis will be the first see the effects of cuts, and says it could affect organizations that combat crime and violence through community programs.
“I don’t think the governor was being over-dramatic,” Taylor said. “I think what he was doing was trying to prepare us, provide some sort of harbinger for what is to come.”
Susan Genin, a retired math teacher from Columbia, said she was “very glad it failed.”
“I think we have a spending issue, not a taxing issue,” Genin said.
She believes the state will be able to make up for the lost revenue by eliminating waste and fraud. Pritzker said last week his administration has already done that and will continue to do so.
But closing an estimated $7 billion budget deficit by cutting waste and fraud is not likely to happen. A cost analysis by the Illinois Policy Institute, a conservative thinktank, found the state could save roughly $556 million by eliminating corruption.
Genin hopes lawmakers decide against an income tax rate increase. The governor said in September it could amount to as much as a full percentage point hike to 5.9%.
“I would hope most of them are smart enough to realize that it cannot continue to tax and tax and tax the people. It’s not an endless well,” Genin said.
If budget cuts affect Harnetiaux’s Greenville, she believes the community will step up.
“One of the really unique things about Greenville is we as a community are fairly tight. We’re really stubborn farmers that are going to figure out a way to make things work. I truly feel this community will take over and supply the needs.”
But either cuts to services or an income tax increase will affect working class families, Taylor says.
“Middle class is middle class and low-income is still low-income. We really needed to have voted on what would have been equitable,” Taylor said. “This is services to our schools. This is services for our family. It makes a world of difference.”
What’s next after ‘fair tax’ failure?
It’s not clear when the General Assembly will hammer out plans to address the budget deficit.
Lawmakers were planning on convening later this month for a veto session in Springfield, but Democratic House Speaker Michael Madigan’s office told Democrats the session would be canceled because of COVID-19 concerns.
When they do meet, the governor said, “Everything is on the table.”
As part of this year’s budget, Pritzker relied on borrowing $5 billion from the federal government to make up for a shortfall in revenue caused by the coronavirus pandemic and increased spending on public health. Though the governor will have a new ally in President-elect Joe Biden, a Republican-controlled Senate would be unlikely to approve a loan to Illinois.
In September, already anticipating a massive revenue gap, the governor’s office asked state agency directors to prepare two budgets for next year, one that would keep spending the same and another that would take into account a 10% spending cut, The Chicago Tribune reported.
The downstate voters who favor reduced spending instead of taxing the wealthy will likely get their wish, while those worried about inequity believe the amendment’s failure spells more of the same.
“A lot of times as citizens, we cut off our noses to spite our face,” Taylor said, “and that is very counterproductive.”
