Editorial: Some tax relief’s coming to Illinois, but will any of it last?

Illinois state government suddenly is flush with cash. General fund revenue from personal income tax, corporate income tax and sales tax have been roaring. And the feds have been generous with pandemic relief. Sober revenue forecasters have been using words like “torrid,” “impressive” and “extraordinary” to describe the sudden and mostly unexpected flow of money into state coffers this spring.

All in all, if you compare this point in the year with the last, Illinois has taken in close to $3 billion more in revenue. No wonder Susana Mendoza, the state comptroller, had a smile on her face Friday.

These are anomalous (and, beware, highly inflationary) times. But that has not stopped Illinois politicians and state officials from jumping out of the hedgerows with good news, talking of a great Illinois comeback and plenty of self-congratulation for their own fiscal responsibility. This is, after all, an election year and the ruling Democrats know there is a serious threat coming to their grip on power.

With that in mind, Democrats say they have agreed on more than $1.8 billion in tax relief while also paying down $1.2 billion in debt. Gov. J.B. Pritzker says there have been many negotiations and compromises among Democrats in recent days, but the plan actually hews closely to his own budgetary ideas, as expressed in February, before the size of the windfall was clear.

We applaud the decisions made to reduce debt. Democrats want to shore up the chronically troubled pension systems to the tune of $200 million (in addition to what has been previously signed into legislation) and add $1 billion into the state’s rainy day fund. Pritzker’s stewardship on debt reduction has been impressively responsible. He deserves more credit than the Republicans are offering.

But when it comes to tax relief, permanent breaks for the hardworking citizens of Illinois are in short supply. Temporary is the byword. They want to maintain the right to hold on to your money and to the state’s “extraordinary” streams of revenue in the future.

Plans include a suspension through the end of the calendar year of the inflation-based increase in the gas tax. That’s a little more than 2 cents a gallon, which may or may not show up for you at the pump. There also is to be a freeze through July 2023 on the 1% state sales tax on qualifying foods, drugs and medical appliances (note that Illinois is the only large U.S. state to impose such a tax at all). And property tax relief checks of up to $300 are to be sent out to those who qualify.

For individual taxpayers earning less than $200,000 annually, and joint filers earning less than $400,000, a state check also is on its way for $50 each person, plus $100 per dependent child, up to three children.

Many Illinoisans will appreciate that money and it absolutely beats increasing state spending to match revenue. We applaud the plan for the permanent expansion of the earned income tax credit in the state, likely resulting in a tax cut for some 40% of Illinoisans, including those who need the relief the most.

But all of the temporary reductions remain no substitute for genuine, long-lived tax relief: a permanent reduction in the state’s hefty sales tax, for example, thus increasing Illinois businesses’ ability to be competitive. Or some property tax relief that allows homeowners to share in the state’s good fortune.

In fact, these direct, one-time checks feel like a benevolent election-year handout, as if the state were doing Illinoisans a favor, not simply returning to them some of their own money in the face of record revenue, mostly coming, let’s remember, from strapped Illinoisans. And relief checks hardly have been a positive when it comes to the rising rate of inflation.

Republicans are correct when they say that the gas and grocery tax cuts (especially the latter) could and should have been made permanent. And the state’s rate of income tax is not etched in stone, either. Other states have reduced that burden. House Republican floor leader Mark Batinick was right to note that “no structural changes have been made. No permanent property tax relief has been extended, and no regulatory relief has been implemented.”

On the matter of public safety, a huge political vulnerability for Democrats, the party was right to budget another $200 million for new initiatives and to stand firm in support of law enforcement, batting away whatever is left of the defund-the-police crowd. We’re all for resources flowing in this crucial area, and we call for more bipartisan exploration of a problem that certainly is not going to be vanquished by increased state revenues.

Certainly, it will be a good thing if (as Democrats have proposed) people being carjacked now do not have to pay towing fees or tickets due to the criminal doings of carjackers, but that’s a laughably trivial action in the face of the real problem. If you are traumatized, tickets are the least of your worries.

Nobody should live in fear of being carjacked, or robbed, in the newly flush Land of Lincoln.

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