This Week in Illinois

TAXES

Senate Democrats Advance Massive Tax Increase. On Wednesday, May 1st, Illinois Senate Democrats passed a graduated tax package out of the Senate that would increase taxes by more than $3.5 billion per year.

House Republican Leader Jim Durkin released the following statement on the graduated tax package votes in the Senate: 

“The Senate’s votes today are a slap in the face to thousands of Illinois families and businesses – just another step towards handing a blank check over to the Democrats and their reckless spending habits.”

The Senate tax package includes four pieces of legislation: a constitutional amendment to remove the current flat tax requirement; a revised graduated income tax plan; a repeal of the Illinois estate tax; and a conditional property tax freeze for school districts. The package is tied together, meaning all of the bills must pass or the estate tax repeal and property tax freeze will not take effect.

CONSTITUTIONAL AMENDMENT – SJRCA 1 removes the flat income tax requirement from the Illinois Constitution and provides that the General Assembly shall set the income tax rate or graduated tax rates.

GRADUATED INCOME TAX – Senate Bill 687 contains the new graduated income tax rates/brackets, along with the following: 

  • A 6% property tax credit (up from 5%);
  • A $100 child tax credit which is phased out once an individual filer’s income exceeds $80,000 and a married filing jointly income exceeds $100,000; and
  • An additional $100 million for the Local Government Distributive Fund (LGDF).

The Senate proposal raises the top income tax rate to 7.99% from 7.95% in Governor’ Pritzker’s proposal and kicks in for individual filers with income over $750,000 and joint filers with income over $1 million. The highest 7.99% tax rate would apply to all income.

ESTATE TAX REPEAL –Senate Bill 689 would repeal the Illinois estate tax. This repeal is contingent upon passage of the graduated tax amendment. According to COGFA’s FY20 estimate, repealing the estate tax would reduce state revenue by approximately $300 million.

CONDITIONAL PROPERTY TAX FREEZE – Senate Bill 690 would provide property tax relief beginning in 2021, based upon the condition that the State fully funds K-12 education. This would require $350 million annually for the new evidence-based funding formula and approximately $300 million for mandated categorical payments.

If these education funding requirements are met, property tax rates for school districts would be frozen for the coming year and every year thereafter in which the State meets the full funding requirement. This conditional property tax freeze would also be contingent upon passage of the graduated tax amendment.

House Republicans Urge Pritzker to Get His Own Finances Under Control Before Pushing New Income Tax Plan. Last week Illinoisans learned that their Governor is under federal investigation for a dubious property tax appeal that the Cook County Inspector General called a “scheme to defraud” taxpayers. On Wednesday, members of the House Republican Caucuscalled on JB Pritzker to get his own tax situation under control before pushing a new tax proposal on Illinois families.

“Governor Pritzker is touting his graduated income tax proposal as a ‘fair tax,’” said State Representative Grant Wehrli. “I would suggest, in light of the ongoing federal investigation into his own tax practices, that JB Pritzker does not know the meaning of the word ‘fair.’”

Wehrli, who was joined at the Capitol press conference by State Representatives Patrick Windhorst, Margo McDermed, Avery Bourne and Mark Batinick, urged Illinois taxpayers to be wary of this latest attempt to raise taxes on Illinois families on businesses. 

“Twice already this decade Democrats raised income taxes under the premise that the new revenue would address the state’s fiscal crisis,” added Wehrli. “Neither tax hike fixed the State’s problems. We need to stop spending and show some fiscal responsibility.”

Representative Windhorst spoke about the lack of protections in the proposal and Representative McDermed pointed out changes already made by Democrat Senators to the suggested rates. 

Please click here to watch the House Republicans’ press conference.

CHILDREN

Deaths of children spur calls for major reform. Illinois children at risk are supposed to be looked after by the Illinois Department of Children and Family Services (DCFS). When these children are injured or killed, many Illinoisans are both stricken with sadness and increasingly determined to overturn the system that ignored these at-risk youths. In recent days, many Illinoisans are thinking and talking about the life and death of A.J. Freund of McHenry County.

Many facts about the death of 5-year-old Freund are still not known. Further investigations are taking place. The almost unimaginable fact that the young boy was beaten to death has sent shock waves through his home town of Crystal Lake. The inability of the youngster to get lifesaving help from DCFS has raised very serious questions about the Department and its personnel. Now, the words of a 2018 letter from the McHenry County State’s Attorney have come to light. In this letter, the prosecutor describes three separate previous cases in which the agency’s local caseworkers allegedly failed to act to protect children and cooperate with prosecutors who were trying to carry out legal interventions. 

In the case of young A.J. Freund, the youth’s parents had been “under investigation” by DCFS, and his case had been “open” until it was closed by the discovery of his body. The status of a DCFS case, like that of Freund, as “under investigation” enables more information to be gathered. It is a way to protect people from having harsh DCFS legal actions taken against them, including being deprived of custody over their own children, without due process of law. It can also be a way for personnel within DCFS to drag out a case and to avoid taking action in the hope that the case will go away. Sometimes, the reason a case goes away is because the person at the heart of the case is no longer alive. 

House Republicans are determined to take action that will look seriously and deeply at DCFS, and at the bureaucratic culture of the Department. We also ask that Illinoisans remember children like A.J. Freund, as tragedies like this are not just data, and not just cases. 

DOWNSTATE

Slow start to 2019 Illinois planting season. Cold, wet spring weather has made it a slow start for Illinois farmers looking to put seed into the ground. The U.S. Department of Agriculture, which tracks planting statistics nationwide, says that as of Tuesday, April 30 only nine percent of Illinois’ corn planting had been completed. Statistics were even slower for beans, traditionally planted after the corn by many farmers, with only three percent of 2019’s soybeans planted as of April 30. Both ratios were well behind Illinois farmers’ 2018 planting progress, and also behind the five-year planting averages for this date.  

ECONOMY 

Congressional study compares Illinois migration patterns with education levels.Illinois’ state and local governments are justly criticized for their role in failing to create jobs and exacerbating the decline of Illinois’ overall population. At the same time, a 50-state survey by the congressional Joint Economic Committee shows a healthy sub-current within this overall trend. While many former residents are leaving Illinois, and outmigration exceeds in-migration by tens of thousands of residents annually, with respect to highly educated Americans the picture is the exact opposite. Net trends are strongly in Illinois’ favor when it comes to net movement into and out of Illinois by “highly educated” workers. This trend, called in lay terms a “brain drain” when it shows a surplus of people leaving, was calculated for all 50 states. The result: Illinois was the 4th-best state in terms of using migration patterns to improve its overall education levels, a “brain gain.”  

The congressional study showed a net movement of “highly educated” workers from America’s heartland to states on the East and West Coasts. While eighteen states were net beneficiaries from the “brain drains” posted by the other 32 states, a disproportionate share of this net movement went to the big cities of New York, Los Angeles, Chicago, Washington, Boston, and San Francisco. These six cities dominated the picture in the top seven states to which highly-educated people moved (California, Massachusetts, New York, Illinois, Maryland, New Jersey, and Virginia, in declining order of net benefits). Two Southern states with large cities, Georgia and Texas, showed smaller but still significant net benefits.  

Illinois appeared to be drawing in highly educated persons from neighboring states. Five neighboring and comparable states – Iowa, Wisconsin, Indiana, Missouri, and Kentucky, in declining order of net losses – were among the top 20 loser-states. The study defined “highly educated” on a curve: whoever was in the top third of the national education distribution was defined as highly educated (this roughly correlates with a four-year college degree or its equivalent). The study was conducted with data from calendar year 2017. 

FLOODING

Flood warnings posted on Mississippi River. Heavy rains throughout Illinois, combined with substantial snowmelt from the Mississippi River’s watershed in states like Minnesota and Wisconsin, have led to warnings of record flooding along Illinois’ western border this year. The entire western border is subject to river conditions, with flooding that can affect substantial urban areas that include the Quad Cities, Quincy, Alton, and the communities of the Metro-East. Up until now, the Great Flood of 1993 set water crest records that were not seen as likely to be broken. However, water gauges in the Quad Cities, posted in and around Rock Island and Davenport, show that as of Tuesday, April 30 the Midwest’s biggest river was running only one foot below the record crest posted in July 1993. Across the river from Illinois, the rising floodwaters caused a major urban levee break in Davenport, Iowa. As it flowed through the Quad Cities, the Mississippi River was expected to crest on Wednesday, May 1 at only a few inches below the high level posted in 1993.

JOBS

Marquis ethanol plant in Scott County will not be built; Rep. Davidsmeyer and Marquis point to pro-union bill. The project would have invested $500 million to construct a state-of-the-art ethanol plant in Central Illinois’ Scott County. Located in the heart of the Corn Belt, the Marquis Energy plant could have produced as much as 1 million gallons of fuel-grade ethanol per day. Marquis already operates a similar facility at Hennepin near Interstate 180 in north-central Illinois.  

However, Marquis Energy stated that their plans have changed. One of the stated reasons was that the firm studied the language of SB 1407, which would manipulate state labor law so as to almost require workers at refineries and fuel-producing plants to be members of labor unions. Federal law forbids states from enacting laws that require workers to be union members, but SB 1407 would enact a series of changes to fuel-plant labor law that – in the eyes of labor-management lawyers and experts – would leave Illinois workers in this sector with very little choice. Marquis Energy has announced that it is looking into other possibilities outside Illinois.

Marquis Energy CEO Mark Marquis told the Jacksonville Journal-Courier that Senate Bill 1407 “is an example of legislation that will negatively impact our company’s expansion plans – removing our company’s choice in construction contractors we hire and the agreed upon price between the two parties, reducing competition and inflating costs.”

State Rep. C.D. Davidsmeyer circulated a letter to regional media outlets expressing his concern for the impact that even pending legislation such as SB 1407 will have on the state’s attempts to boost the economy.

“While it hasn’t been passed yet, the fact that bills like this are even introduced in Illinois is already driving away business from our state at a time when we need more jobs, more investment, and more opportunity for all Illinoisans,” Davidsmeyer stated. “SB 1407 would give Illinois government the power to drive up costs on private projects. An expansion of legislative power to this degree infringes on Illinois companies’ abilities to grow and provide more opportunity for individuals to flourish. This bill does nothing to brighten opportunities for Illinois’ economy and skilled workers. As legislators, we need to enact policies that bring more good paying jobs and opportunity to the state, not less.”

LAW ENFORCEMENT

McDermed Tours ISP Lab, Continues Push for Victim’s Access. State Representative Margo McDermed toured the Illinois State Police Chicago Crime lab last week and learned firsthand what the ISP is doing to address the DNA backlog and how her legislation will make an important impact on victim’s rights.

“In Springfield we have wisely addressed criminal justice reform. The processing of evidence like rape and DNA kits is an important avenue within that area that needs to be assessed to ensure that justice can be rightfully served in Illinois—both for victims and those wrongfully convicted,” Rep. McDermed said.

House Bill 1440 mandates the creation of a statewide rape kit tracking system, to be administered by ISP, and requires that it complies with the recommendations of the Sexual Assault Evidence Tracking and Reporting Commission. HB 1440, currently in the Senate, has significant bipartisan support and support from nationwide groups like the Joyful Heart Foundation. The funds for the system are to be derived from ISP appropriations and the tour included Governor Pritzker who promised to increase funding for ISP.

“Going through the rape kit collection process can be incredibly traumatic and it’s unconscionable that we let victims feel that it was all for nothing,” Rep. McDermed continued. “I’m incredibly proud of this legislation because it means that victims won’t be given the run around and that this will spur action on the backlog at the ISP crime labs.”

The tour covered an overview of how ISP’s new Laboratory Information Management System is already making a huge difference in how ISP efficiently handles evidence and information. The system will be modified and improved based on HB 1440 to allow for victims to access the status of the evidence in their case. While the language is not yet available, the bill is being modified in the Senate to allow for other victims, not just rape victims, to view their case status.