Martwick, Mulroe discuss Pritzker’s graduated income tax structure

by KEVIN GROSS

Before they took on new roles as a senator and a judge, former state Representative Robert Martwick (D-19) and former state Senator John Mulroe (D-10) discussed the past legislative session as well as Governor J.B. Pritzker’s "Fair Tax" measure, that voters will decide on in 2020.

"I’m not being facetious, we accomplished more in one session under Pritzker than under 4 years of (former Governor Bruce) Rauner," Martwick said. Martwick was appointed to Mulroe’s senate seat on June 28 after Mulroe retired to become a judge.

"More got done in the past year than in the last 4, the last 6, at least," Mulroe said. "10 years from now, we’re going to remember this legislative session."

Martwick, a key author of the "Fair Tax" legislation that would give voters the opportunity in November 2020 to decide whether to amend the state constitution and eliminate the flat 4.95 percent income tax to ultimately create a graduated income tax, has supported the legislation as a mechanism that would tax lower and middle class families at an equal or lower rate while raising more state revenue for paying off pension debt and funding public services.

If approved by voters in a referendum, the state could adopt initial proposed rates taxing income increments above $250,000 at a higher rate.

"It doesn’t make increasing tax rates easier. But they (opponents) say if you put the constitutional amendment in, you’ll later raise rates on the middle class. We haven’t actually done this very often or very dramatically," Martwick said. "Also, you can’t stop increasing taxes until stopping debt accumulation. Giving the tools to actually stop debt is the best tool to prevent future tax increases."

Mulroe said the increased state income tax revenues would allow for the state to increase education grants, more equitably fund schools and lessen school districts’ reliance on local property taxes, thus eventually decreasing total local taxes.

"That’s the whole idea. If we can put more burden of education on state dollars, if we can shift burden to the state to pay a higher portion of education costs, the burden should theoretically be reduced on local government taxing bodies," he said, acknowledging that the governor’s new property tax task force is still doing research. "Details of how to get that (property tax reduction) done will be drafted."

"The question is, what are we doing to ensure, firstly, that local property taxes are fair, and secondly, that we’re not just going to give the state extra income tax and they don’t do anything locally (to reduce property taxes)," Martwick said. "What are the triggers in place to ensure that comes into place? That’s where the task force comes in."

Martwick also agreed that increased state education funding from tax revenues could allow for more equitable school funding outcomes and property tax rates.

"There’s evidence that there are school districts – not surprisingly in wealthier Chicago suburbs – where they are funded at more than 100 percent of the adequacy rate (set in the state’s school funding formula passed in September 2017). Some districts have as much as 220 percent advocacy, meaning they (residents) are putting more than twice the local property tax dollars than what’s needed. At the same time, every year they (local governments) are putting the max increase on property tax bills that they can. Then you say no wonder people are upset.

"We have very disparate (local tax) outcomes, even just in Cook County," Martwick said. "In Chicago the property tax says 7.2 percent, but in (southwest Cook County suburb) Markham your tax rate could be 27 percent. When there’s such a massive difference, there’s never a simple answer."

Addressing the issue of gambling legislation, which legalizes sports betting and introduces new casino licenses and the possibility of a Chicago casino, Mulroe said that the General Assembly has worked on gaming expansion "forever."

"The funny part, when we were hearing the negotiations, online sports betting was the most complicated component, even though it brought in the least amount of revenue," he said. "There was a tug of war between online and land-based casinos. The land-based casinos were saying initially that they were thrown into the penalty box a little bit, while saying these online guys were playing ‘loosey with the law’."

Mulroe said that Mayor Lori Lightfoot would be issuing a feasibility study for casino locations. Lightfoot has spoken in support of locating a casino in a minority neighborhood to bring jobs to the community, although Mulroe said another priority being raised by lawmakers and officials would be a location that "brings people from other states to come to the casino" and draw in outside revenue.

Although he acknowledged the supermajority Democrats hold in the state House and Senate, Martwick noted a difference in the cooperation of Republican lawmakers when compared to the gridlock of past years, referring to the bipartisan support for this year’s budget, or bills such as marijuana legislation.

"We had literally no motivation or need for Republicans to really participate in government. Nevertheless, it was the most cooperation we had on functions of government, budgeting, and appropriations (this year)," he said. "Their ideas were addressed and adopted, and they participated more even though they now have the smallest voice. In that budget, because of their participation … they were able to get more pro-business reforms than they ever did under Rauner. They did more for their core constituencies than ever."

"The biggest problem in Illinois was the inability of people to put aside partisan differences to work on issues like capital investments. Those aren’t supposed to be partisan issues," Martwick continued. "No one necessarily expects compromise on ideological issues of abortion or guns. But you’re supposed to compromise on issues like budgeting and infrastructure."