The fate of Gov. J.B. Pritzker’s bid to amend the state constitution to allow for a graduated income tax remained uncertain Tuesday night, with state officials warning as many as 400,000 outstanding mail-in ballots have another two weeks to arrive.
Complicating matters in Illinois’ most hotly contested statewide campaign is that the amendment could pass in one of two ways.
The amendment could pass if a majority of all people voting in Tuesday’s election voted “yes.” But it could also pass if 60 percent of the people who specifically voted on the amendment voted “yes.” Meanwhile, mail-in ballots have until Nov. 17 to roll in.
Incomplete results Tuesday showed 53.2% of people voting against the amendment and 46.8% voting in favor with 61.4% of precincts reporting. Election officials cautioned in the days leading up to Election Day that outstanding mail-in ballots could affect early leads seen in numerous races across the state on Election Night.
Currently, the state constitution mandates all incomes be taxed at a flat rate. That changes if the amendment passes. Pritzker and other supporters of the amendment argue that would make Illinois’ tax system more fair. Opponents say Springfield can’t be trusted to not enact additional tax hikes later under the new framework.
The current income tax levied on all taxpayers is 4.95%. The flat tax rate, which has fluctuated over the years, has been part of the Illinois constitution since 1970, a year after income tax was first enacted in Illinois.
Advocates for the change predict 97% of Illinoisans would see a tax cut with new marginal tax rates that would go into effect Jan. 1. For single or joint filers making $250,000 a year or less, lower tax rates would be applied to the first $100,000 of their income, with the current tax rate of 4.95% applied only to the dollars that followed after that.
For single filers, a higher 7.75% rate would apply to income between $250,001 and $350,000, followed by a rate of 7.85% from $350,001 to $750,000. For joint filers, the 7.75% rate would kick in between $250,001 and $500,000, followed by 7.85% from $500,001 to $1 million.
Single filers making more than $750,000 and joint filers making more than $1 million would pay a rate of 7.99% on all income earned.
The battle over whether that will happen pitted some of Illinois’ richest people against each other. Pritzker dropped at least $58 million on the Vote Yes for Fairness committee, which sought to pass the amendment. Meanwhile, Citadel founder and CEO Ken Griffin — Illinois’ richest man — kicked at least $53.75 million into the fight to defeat it.
The battle even spilled into a courtroom last month, when the conservative Illinois Policy Institute joined with three Cook County residents to sue over a government pamphlet explaining the amendment that had been mailed to voters. The lawsuit underscored critics’ arguments against the proposal.
While the pamphlet explains in part that, “the proposed amendment grants the state authority to impose higher income tax rates on higher income levels,” the Illinois Policy Institute sought a correction that said, “the proposed amendment grants the state authority to impose different income tax rates on different income levels.”
However, the lawsuit was not filed until early October. And Cook County Circuit Judge Celia Gamrath denied a temporary restraining order sought by the Illinois Policy Institute, noting that the language complained about in the lawsuit “was published, spread of record, and made widely known to the public months ago, long before early voting began.”
“Like it or not, the proposed amendment does give the state the ability to impose higher tax rates on those with higher income levels and lower income tax rates on those with middle or lower income levels, just as the ballot describes,” Gamrath wrote in a six-page order.
