Transportation spending shows ‘fair tax’ ripe for waste
Politicians pledged to rebuild decaying roads and bridges if taxpayers paid just a little bit more, but too often the funds were misused and the promises meant little.
Drivers expect gas taxes, license plate fees, tolls and other vehicle taxes are collected to improve the transportation system, but when Illinois politicians are navigating, the money can end up in a very different destination that originally intended.
Between 2002 and 2015, state lawmakers used $6.8 billion from transportation funds for other purposes, according to the Transportation for Illinois Coalition. In response, Illinois voters in 2016 overwhelmingly approved a “lockbox amendment” to the Illinois Constitution intended to ensure money collected from transportation taxes and fees is only used on transportation-related projects.
Problem solved? Not necessarily: Transportation dollars still go to waste, which offers a warning about state leaders’ current “fair tax” push for greater taxing authority.
In 2017, a federal investigation found the Illinois Department of Transportation made hundreds of patronage hires by giving jobs to politically connected people regardless of their job skills or IDOT’s manpower needs. The same thing happened at the Illinois Toll Highway Authority, with the board chair giving out six-figure salaries to political allies. They also contracted with politically connected firms.
Capital plans aren’t much better at guaranteeing money is spent on necessary projects.
The 2009 capital bill spent $670,000 for copper-plated doors and $500,000 for chandeliers and sculptures at the Illinois Capitol building. It also put $500,000 toward construction of the Chicago Baseball Museum, which 11 years later has yet to be built.
The 2019 capital bill came with huge tax and fee hikes, including a doubled state gas tax, with the promise to repair roads among other things. However, the Illinois Policy Institute identified $1.4 billion of waste in the plan, including dog parks, pickleball courts and money for a privately owned, defunct theater.
Now promises are being made about the progressive tax, which Gov. J.B. Pritzker calls the “fair tax.” Pritzker promises only the top 3% of Illinoisans will see a tax increase, but if the amendment passes state lawmakers will gain greater power to set rates on smaller income groups, such as retirees, whenever they want revenue. That’s what happened in Connecticut, the last state to impose a progressive tax, and middle-class taxes were hiked 13%.
Pritzker’s progressive tax math doesn’t add up. He has promised at least $10 billion in new spending on what he says will be $3.4 billion in new revenue. Research from the Illinois Policy Institute has found that if a progressive tax were used to fully pay for all the new spending promised by the governor, middle income families could see a tax hike of up to $3,500.
Unlike transportation spending, there will be no “lockbox amendment” to direct tax revenue to necessary spending. The state’s spending history shows funds promised for specific projects often go elsewhere. Why would the progressive tax be different?
Five key backers of the progressive tax in the Illinois General Assembly have been the subjects of federal corruption probes. If federal investigators are showing these lawmakers betrayed the public trust, why would the public trust their word that the tax is necessary or will be spent as promised?
In April, Pritzker said Illinois needs the progressive tax revenue “now more than ever” because of the COVID-19 economic downturn. It’s more proof that the amendment would be a gateway for more taxation and more wasteful spending followed by more false promises about rebuilding Illinois.
Tax hikes in 2011 and 2017 did not solve Illinois’ spending problem, so voters on Nov. 3 have good reason to question why Pritzker suddenly has the correct tax scheme now.