‘Millionaire tax’ falls short in House

By Mark Fitton
Illinois News Network

SPRINGFIELD — Speaker Michael Madigan’s “millionaire tax” fell three votes short Thursday in the Illinois House.

All but three Democratic representatives supported the measure, the exceptions being Scott Drury of Highwood, Kenneth Dunkin of Chicago and Jack Franks of Marengo.

On the Republican side, Rep. Grant Wehrli of Naperville was away from the House on an excused absence, while the tote board showed representatives Michael McAuliffe of Chicago and Sheri Jesiel of Winthrop Harbor not voting.

The vote was 68-47, but 71 votes were needed for passage.

If passed by both the House and Senate and approved by voters, the amendment would tax all personal, adjusted gross income above $1 million at an additional 3 percent. In other words, income up to and including $1 million would be taxed at 3.75 percent, and income beyond $1 million at 6.75 percent.

Because it would amend the state’s constitution, the measure needs a three-fifths majority, or 71 votes.

The money, an estimated $1 billion per year, would go to primary and secondary education.

Republicans, however, pointed out Illinois has been known to dedicate money to a cause or project only to bump the equivalent amount from that cause and spend it elsewhere.

As such, it becomes replacement money and not additional dollars. Promises surrounding proceeds from the Illinois Lottery, established in 1974, are frequently cited as an example of funding trickery.

Madigan, D-Chicago, said that wasn’t his intent, that he would have the money — which would be spread statewide based on student population — be an added funding source for schools to do with as they please.

“This simply says that for those that have done well in this state, we’re going to ask you to provide a little more help for the educational systems of the state so our children can do better in life,” Madigan said.

The GOP members leaned on the speaker, asking why he wasn’t working on a more comprehensive solution to the state’s fiscal problems.

Madigan more than once answered that this was an education-funding proposal, but he was willing to negotiate the state budget, pensions and taxation.

“I’m as concerned as you are concerning with the general condition of the state,” Madigan told Republicans. “I’m prepared to work with anybody to improve the fiscal condition of the state of Illinois.”

But the GOP said the speaker’s bill would do the exact opposite, that it would only accelerate an out-migration of people and wealth and discourage job creation, especially in the small-business sector.

In states that have imposed similar taxes, “people voted with their feet,” said House GOP Leader Jim Durkin of Western Springs. “It’s been chronicled; it’s clearly the case.”

Rep. David Harris, R-Arlington Heights, called the bill “great political theater” but no real help for state, especially as it could not yield spendable dollars until 2018.

“It is a tax on success,” Harris said. “What it says is, ‘If you’re successful, we’re going to nail you.’”

Democrats argued that no single tax rate decides where people choose to live and said the measure would no more chase people from the state than would some lower tax rate tie people here.

“Talk about tying people to the state — we tie people here by poverty all the time,” said Rep. John Bradley, D-Marion, as he urged passage of the measure.

During debate in the House, Dunkin said he was taking it all in but thought needed both more comprehensive reforms and a bigger revamp of its spending system.

“I’m not sure this is the right answer,” he said.

Drury said the state, which faces a looming $6 billion budget shortfall and unfunded pension liability of about $110 billion, has huge problems it must address now, and the surcharge was a distraction.

“I do not see how voting for a potential tax increase in 2017 addresses the issue or helps the many struggling families I represent,” he said in a news release.

Franks said he didn’t think measure was sound public policy or a comprehensive solution to Illinois fundamental fiscal problems. He said he also see wants to see structural reform.

“I’ve never trusted Springfield having more money and I just didn’t think this was well thought out,” he said.

And, he added, Illinois entire method of funding education needs an equitable rewrite “We need to blow it up!” he said. “It doesn’t work.”

After the vote, the speaker in a news release noted his plan polled at nearly 64 percent in a 2014 statewide referendum and accused Republicans of failing education and middle-class families in favor of millionaires and billionaires.

Republicans continued to contend the “millionaire surcharge” was little but political theater intended to gather news release and campaign fodder to be used against them and Gov. Bruce Rauner, the first-term Republican from Winnetka.

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