Pritzker To Business Leaders On Graduated Income Tax: 'Doing Nothing Is Not An Option'

May 2, 2019
Originally published on May 1, 2019 6:56 pm

Illinois Gov. J.B. Pritzker tried to convince business groups Wednesday to accept his graduated income tax plan. 

The governor criticized the former administration for leaving the state in what he called a “dire fiscal situation”.

“After years of neglect, Illinois is finally getting its mojo back and we’re open for business,” he told a room full of business leaders from the Illinois Manufacturer’s Association and the Illinois Retail Merchants Association in Springfield. 

Pritzker said his graduated income tax idea is the best solution to dig the state out of a $3.2 billion structural deficit. “There are people here, I know, who disagree with me about this proposal, and that’s in our democracy. But to be clear, doing nothing is not an option.”

Business leaders say they are concerned the idea could hurt their businesses. They point to the recent statewide minimum wage increase to $15 an hour as another example they fear will hurt their bottom line. Even when the groups pushed against a statewide increase and offered alternate ways to approach a minimum wage hike, Democrats in the General Assembly moved through with a vote. The governor signed the proposal into law in February.

Pritzker said, in turn, he has plans to support businesses in other policy areas where they can all find some common ground. 

“When it comes down to it, there are more things that unite us, than divide us.”

Pritzker is proposing to grow jobs and the economy by investing in workforce development through vocational training. He also emphasized the need for a strong infrastructure program, with the revenue needed to help businesses grow. 

Despite disagreeing on certain issues, Rob Karr, president and CEO of the Illinois Retail Merchants Association, said he welcomes the communication with Pritzker —something that wasn’t readily available with the previous administration. 

“There are clear policy objectives that they [Pritzker’s administration] want to accomplish that we’re just simply not going to agree on – the graduated income tax being one of those. But there are other issues being discussed where we are clearly heard and listened to,” he said. 

The same day business leaders met and heard from Pritzker, Senate Democrats moved to approve a proposed constitutional amendment that would get rid of the state’s current flat tax and change it to a graduated one. If the House approves the same amendment, with a three-fifths majority vote, voters will decide if the change is permanent in the 2020 elections. 

Mark Denzler, president and CEO of the Illinois Manufacturer’s Association said the vote is not a solution to the problems Pritzker highlighted in his remarks.

“This vote is yet another sign that Illinois politicians are more concerned with increased spending rather than meaningful solutions to curtail costs, address growing property taxes, tackle ballooning pension debt and adopt reforms that make it easier for businesses to create jobs,” he said in a statement.

“If enacted, Illinois will have the dubious distinction of having the highest sales tax rate in the nation, the second highest property taxes, and the third highest income tax rate.”

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