Pritzker’s record: 24 tax, fee hikes taking $5.24 billion more from Illinoisans
Gov. J.B. Pritzker has added more than $5.24 billion in new or higher taxes and fees since taking office. Despite all that new revenue, the nation’s highest taxed state remains a fiscal mess unable to balance a budget for 21 years.
When Gov. J.B Pritzker first announced his candidacy for governorship back in 2018, he campaigned on the notion Illinois should “think big.”
What he failed to mention is how much his big thinking would cost taxpayers.
Less than three years into his term, the price tag is $5.24 billion for the 24 new or increased taxes and fees Pritzker has championed.
That amount would have ballooned by another $3 billion had Pritzker been able to deliver on his other campaign promise to impose a progressive state income tax. Voters in November soundly rejected his plan.
Illinoisans have watched as state taxes and fees on gas, vehicle registration, parking, marijuana, gambling, online shopping and businesses have risen rapidly under the Pritzker administration.
Residents paid more than neighboring states when gas taxes were 19 cents per gallon, but then Pritzker doubled the state gas tax to 38 cents per gallon. The rate is now 39.2 cents thanks to automatic inflationary increases state leaders built into the tax hike so they never again need to take an unpopular vote to raise the gas tax. Before the hike, Illinois was No. 10 in the U.S. for gas taxes, but now it is No. 2.
Similarly, Illinoisans can now expect to pay the nation’s highest base registration fee and the fifth-highest overall fee for vehicle registration. The state earned these superlatives when Pritzker increased registration costs for standard vehicles from $98 to $148 and all other large vehicles by $100 in January 2020.
Pritzker passed a comparable rate hike on purchasing license plates for utility trailers, which bumped the fee to $118 from $18 in 2019. Significant resistance to the increase spurred a new measure that Pritzker just signed, reducing the fee to $36. That same measure also repealed a provision Pritzker included in his 2019 capital plan that resulted in double taxation on vehicle trade-ins worth more than $10,000, which had generated significant opposition.
Pritzker justified raising taxes and fees by saying they would balance state budgets and fund his $45 billion infrastructure plan.
The balance has never materialized.
The $42.3 billion budget passed June 1 marks the 21st consecutive year in which Illinois lawmakers failed to balance the state budget. Despite introducing $655 million worth of new taxes and fees and receiving $8.1 billion in federal aid in 2021, the Illinois General Assembly passed a budget this year that was underfunded by at least $482 million.
Adding that $655 million in new taxes this year was especially damaging because the taxes were aimed at job creators as they struggle to recover from the COVID-19 economic downturn and as Illinois has been especially slow to get people back to work. Illinois unemployment has remained at 7.1% since March as the rest of the nation quickly recovers. As disappointing as that is, unemployed Black Illinoisans have seen unemployment worsen in the past year to 15.9% – more than three times the rate of their white counterparts.
Prior to the taxes enacted this year, the average Illinoisan already faced the highest total state and local tax burden in the nation.
Pritzker also campaigned on a new capital plan for Illinois, originally proposing $41.5 billion for his “Rebuild Illinois” plan. The plan passed by the General Assembly spent even more, at $45 billion over six years. It was riddled with over $1.4 billion in pork projects such as pickleball courts, dog parks and funding for a shuttered, privately owned theater.
Senate Democrats said $33.2 billion of the total would go to transportation infrastructure, such as roads and bridges. Lawmakers refer to those projects as “horizontal” infrastructure spending. The plan also allocated billions of dollars for new spending on buildings such as state facilities and public universities. The bulk of funding for this “vertical” infrastructure comes from expanded gambling.
On the plus side, Pritzker just signed legislation to make infrastructure spending more transparent and prioritize spending based on scores for need and cost-effectiveness. It should reduce Illinois’ long tradition of lawmakers basing spending on which projects they can use as a photo op. Unfortunately, it will not apply to much of the Rebuild Illinois spending for projects that have already begun or been selected. The legislation requires a cost-benefit analysis for projects selected by the state transportation department on or after Jan. 1, 2022.
A decade ago, Illinois leaders raised taxes during the recovery from the Great Recession. Tax hikes coupled with declining government services resulted in lower investment and sluggish productivity and employment growth, contributing to the state’s lackluster recovery relative to its peers.=
It is hard to believe Pritzker would repeat that mistake, but state leaders again raised taxes on Illinoisans still recovering from the COVID-19 pandemic. Twenty-four tax hikes in less than three years: Is Illinois any better off with $5.24 billion in new taxes?