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Laura Fine.

The defeat of the graduated income tax proposal leaves Illinois with a multi-billion dollar hole in the state budget and, according to State Sen. Laura Fine, whose district includes part of Evanston, “a lot of ifs on the table.”

Voters on Tuesday rejected what backers termed the “Fair Tax” amendment by 55% to 45%.

The measure would have replaced Illinois’ current flat rate income tax with a graduated rate, with higher income earners paying a higher rate.

While supporters said 97% of taxpayers would see no increase or even a tax reduction, opponents played off the unpopularity of politicians in Springfield to successfully get the tax plan defeated.

The graduated tax would have raised about $3 billion a year, helping to reduce the state’s projected $5 billion budget deficit. So the state now faces a dilemma — raise other taxes, cut services, or a combination of both. Another possibility is to borrow money from the federal government, but that would have to be paid back. Fine says “I’d rather not” consider that option yet.

Gov. Pritzker, at a news conference this afternoon, said opponents lied about the impact of the tax change and now the state will have to suffer the pain that they brought on. Pritzker though said he was “four square against” the idea of taxing retirement income as a way to reduce the budget gap.

Fine says “all 50 states are suffering right now” because of coronavirus-induced business closings and job losses. If Joe Biden becomes president, Fine hopes there’s a bigger chance of a federal aid package which would help cities and states.

As for reducing state programs, Fine says, “the last thing we want to do is hurt people in Illinois who are relying on human services during the pandemic.”

Two of the state’s wealthiest individuals spent big money on the advertising campaign over the “Fair Tax.” Pritzker used $56 million of his own money in favor of the amendment. Hedge fund owner Ken Griffin spent $54 million against it.

Ironically, although no one is ready to go there yet, one possibility is the state raising the flat tax rate which everybody pays in order to help reduce the deficit, instead of getting additional money that the graduated tax plan would have brought in.

Whatever happens, the process will be painful. Fine says, “Everybody is in a world of hurt right now. These are so uncertain times.”

Jeff Hirsh joined the Evanston Now reporting team in 2020 after a 40-year award-winning career as a broadcast journalist in Cincinnati, Ohio.

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