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dir="ltr">Gov. J.B. Pritzker said President Donald Trump’s policies may have helped boost tax revenue in Illinois, but he dismissed calls from Republicans for Illinois to move ahead with policies they say will make the state more attractive to businesses.
Republicans at the statehouse said April’s surprise collection of $1.5 billion more in tax revenue than expected was the result of Trump’s pro-growth policies.
Pritzker kind of agreed.
“The Trump tax cut, which went to the wealthiest people in Illinois and the wealthiest people in the United States, is in part the reason that we received that good news, I guess,” Pritzker said Tuesday in his office.
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Pritzker said he’s glad the state will be able to use the money to help make required payments to the state’s underfunded pension systems. However, he doesn’t expect it to last.
“Those who have said that ‘oh, we got one windfall and that solves all of our problems,’ they’re wrong,” the governor said.
Pritzker didn’t respond to Republicans who’ve said Illinois could reap more economic benefits if policymakers were to follow the lead of the Trump administration by lowering taxes and reducing regulations.
Credit rating agency Moody’s said last week that the unexpected revenue from Illinois taxpayers in April happened despite Illinois’ high state and local taxes, and the cap on state and local tax deductions, referred to as the SALT cap, included in the federal tax reform measures approved in 2017. Moody’s said the windfall will help with Illinois’ short-term deficit.
“However, damaging consequences, such as taxpayers fleeing high-tax states, would in any case likely play out over a much longer period, and the SALT deduction cap's future is not clear,” the Moody’s report said.
Pritzker used the issue to continue his push for higher taxes on the wealthy in the form of a graduated income tax.
Despite some in his own party opposing his proposed progressive income tax plan because they say it fails to provide property tax relief, Pritzker said he’s confident the measure will get in front of voters for the November 2020 election.
Several Democrats came out last week in opposition to a package of bills from the Senate meant to change the state constitution's flat income tax to one with higher rates for higher earners. The package includes a limited property tax freeze, but some Democrats said that didn’t go far enough to reduce the state's high property taxes.
Pritzker said those concerns have been heard.
“I’ve said from the very beginning that this would be a process of negotiation,” the governor said. “This is part of that negotiation.”
He also talked about how the rates he proposed were different the rates the Senate passed.
“No doubt the House will have a slightly different variation as well, but I’m very confident that we’ll be able to get it passed,” Pritzker said.
The rates the Senate passed were higher than Pritzker's initial proposal, and had the top rate of 7.99 for individuals making $750,000 or more, not $1 million or more as was originally proposed by the governor's administration.
It’s unclear if and when the House will bring the package of bills up for a vote. A spokesman for House Speaker Michael Madigan said last week a vote “will occur when there are enough [votes] to pass it.”