While listening to a debate on whether Illinois should stick with a flat income tax or go with a graduated system, 17-year Naperville resident and small business owner Robert Slayton said he considered moving to Indiana last year.
Figuring he would save about $12,000 a year in housing costs and property taxes, Slayton also liked the thought of leaving behind Illinois' financial woes and the possibility of higher income taxes to pay for them.
"Giving more money to the State of Illinois is like giving crack addicts money and expecting them to buy food," Slayton said.
He decided to stay because of Naperville's excellent schools and his ties to the community, but he plans to revisit the issue once his kids leave for college.
Slayton's viewpoint was essentially at the heart of the argument to keep a flat income tax in Illinois made by Ted Dabrowski of the Illinois Policy Institute at a recent debate hosted by the Naperville Area Chamber of Commerce and moderated by Reboot Illinois, a group aimed at educating and involving Illinoisans in key state issues.
Because voters might decide the fate of Illinois' tax system in the November 2014 election, Naperville Chamber President and CEO Mike Evans said the debate was timely and encouraged people to become engaged on the issue.
"We know the current climate of spending and raising revenue is not working and is not sustainable in Illinois," he said.
Dabrowski argued against a graduated tax, saying people and corporations are fleeing the state because of high state taxes and "out-of-control debt." He said generous pensions need to be reformed. He also noted that despite raising the flat income tax from 3 percent to 5 percent in 2011 and raising more revenue than ever, the state still has billions in unpaid bills and about $100 billion in unfunded pension liabilities.
"We don't have a revenue problem; we have a spending problem," Dabrowski said. "If we fill the coffers up again, they will not fix health care, pensions or balance the budget."
Meanwhile, Ralph Martire of the Center for Tax and Budget Accountability spoke in favor of a graduated tax, saying Illinois' flat tax doesn't work in a modern economy and blamed the state's "over reliance on debt" rather than revenue for its fiscal problems. Martire explained that for decades, Illinois has borrowed against what it owed the pension systems to fund public services like education rather than raising tax dollars to cover those costs.
"It has caught up with us," he said. "It is our poor tax policy."
Martire favors a progressive tax that is "fair, responsive to the economy, stable during core revenue cycles and efficient."
Several resolutions have been proposed by Illinois lawmakers to allow either a graduated tax for personal income taxes or for both corporate and personal taxes. No resolution offers specifics on what those rates might be or what income levels will trigger higher rates.
Because Democrats have a supermajority in both chambers of the General Assembly and Gov. Pat Quinn supports a graduated income tax, it is a real possibility voters could take up the issue in the 2014 fall election. To become law, any constitutional amendment resolution must be approved by a three-fifths majority in both the state Senate and House and then approved either by a simple majority of all voters or a by a three-fifths majority of those who vote on the amendment question.
House and Senate Republicans are opposed to a graduated tax, said Sen. Michael Connelly (R-Lisle) after the debate.
"I've seen this coming for a while," he said. "In this very room, I predicted to this group two years ago that there would not be pension reform and that the Democratic response would be a progressive income tax. I hope I'm not a soothsayer."