Illinois lawmakers consider millionaire’s tax to pay for property tax relief, schools
CHICAGO - State lawmakers in Springfield appear to be moving forward with a proposal to impose a 3% surtax on residents who earn more than $1 million per year to help pay for property tax relief and provide more funding for public schools.
A bill that would get the new tax on the ballot for voters to weigh in on passed the House Revenue & Finance Committee on Tuesday.
What we know:
As members of the General Assembly reach the final stretch of their spring legislative session, they’re under pressure to address a number of significant issues, like the passage of the so-called "mega projects" bill, which the Chicago Bears argue is necessary to build a new domed stadium in suburban Arlington Heights.
There’s also been growing momentum for lawmakers to approve a new tax on the state’s millionaires, which would require a change in the state’s constitution. In order for that change to happen, voters would also have to approve the change at the ballot box.
A recent report by researchers at the University of Illinois at Urbana-Champaign and the Illinois Economic Policy Institute (ILEPI) found that a 3% surtax on millionaires could provide substantial economic benefits to residents and the state’s economy.
What’s the proposal?
By the numbers:
The proposal calls for a 3% additional tax on income over $1 million.
The state currently has a flat income tax rate of 4.95%. The state’s constitution currently does not allow for a graduated income tax rate, meaning higher tax rates on higher incomes.
If the surtax is implemented, that would generate between about $1.3 billion and $3.7 billion a year in new revenue, based on tax data going back more than a decade.
The bill being considered would assign half of that new revenue to be used for property tax relief and the other half for new funding for public school districts.
In order for the state to tax higher incomes at higher rates, the state’s constitution would need to be changed.
That would require two basic steps:
- Both the House of Representatives and the Senate would need to pass the bill.
- At least 60% of voters would need to approve of the change in an election, or at least a simple majority of all voters who cast ballots.
What we don't know:
It’s unclear when the bill could be voted on by lawmakers, but Capitol News Illinois reported that the vote could happen as soon as Wednesday.
The General Assembly will still be in session through next month.