Pritzker says 'painful cuts' coming after graduated tax defeat

After the defeat of his signature graduated income tax rate plan he said would generate $3.6 billion per year more for the state, Gov. J.B. Pritzker said Illinois Republicans will bear the blame for "painful cuts" in education, public safety and health care that will have to be made to balance the budget.

"The opponents of the Fair Tax lied about what would happen if it passed, and they left all of the working people of Illinois holding the bag," Pritzker said Wednesday afternoon. "Now we'll have to suffer the pain they've brought on."

Supporters of the vote to change the state constitutional mandate for a flat income tax rate conceded the race Wednesday morning.

"We are undoubtedly disappointed with this result but are proud of the millions of Illinoisans who cast their ballots in support of tax fairness in this election," said Quentin Fulks, who led the Vote Yes for Fairness campaign. "Now lawmakers must address a multibillion-dollar budget gap without the ability to ask the wealthy to pay their fair share."

In the past, officials in Gov. J.B. Pritzker's administration have said that if the amendment failed, taxpayers could expect as much as a 20% increase in income taxes across the board by the legislature raising the rate from its current 4.95% to 5.95%.

Pritzker left the door open to that possibility, but he also reiterated that cuts to public safety, health care and education - perhaps as high as 15% - likely will be made because of the voters' decision.

"What is so pernicious about the anti-tax people is that they were packaging a bunch of lies to get people to vote against their own self-interest," said Ralph Martire, executive director of the bipartisan Center for Tax and Budget Accountability, which supported the graduated income tax plan. "They lied to voters about making it easier to go after retirement income, but the Fair Tax would have shifted the need of the state to go after retirement income. Now, retirement income is more likely to come on the table."

With about 98% of the state's precincts reporting, unofficial results show 55% of voters were against the proposal.

"It is clear that Illinoisans do not trust this legislature and this administration to spend more of their precious tax dollars without restraint," said Illinois Chamber of Commerce President and CEO Todd Maisch. "We believe we're on our way to hearing from the electorate that Illinois needs a lot more than tax increases to fix our economy."

Gov. J.B. Pritzker spent more than $50 million of his own money to support the campaign. Billionaire Ken Griffin spent a similar amount to oppose it.

State budget experts estimated it would have generated about $3.6 billion per year for the state while reducing or maintaining the current income tax burden on 97% of taxpayers.

The flat tax has been at 4.95% since July 1, 2017, when it was raised from 3.75%, with the increase largely funding K-12 education, public pension obligations and a backlog of bills. The state tax rate was 5% from 2011 to 2014.