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Lightfoot: ‘Can’t keep taxing the hell’ out of substantial earners, but aide vows she still supports graduated income tax

The mayor made her remarks during an interview Friday with the Chicago Sun-Times Editorial Board.

Fresh off a televised address outlining an $838 million deficit, Mayor Lori Lightfoot on Friday said “we can’t keep taxing the hell out of all of our people who make substantial incomes” — despite her previous support of Gov. J.B. Pritzker’s graduated income tax plan.

Lightfoot made her remarks during an interview Friday with the Chicago Sun-Times Editorial Board when asked if Gov. J.B. Pritzker’s graduated income tax plight will get in the way of the city getting needed revenue. “That’s not good. That’s not right. It’s not fair.”

A source close to the mayor worked quickly to walk back that statement, reasserting that Lightfoot supports a graduated income tax structure for the state. But is this Lightfoot’s power play? Get in the way of a plan the governor is spending millions on, so the city can get its needed casino and pension help?

It could also simply be a warning ahead of the graduated income tax question on the November 2020 ballot. City residents might be dealing with new taxes that could affect their decision on that important question.

Later on Friday, the mayor’s office released a statement pledging Lightfoot will work “hand-in-hand with Governor Pritzker to pass the Fair Tax, which is key to our State’s long-term growth.”

“Core to my administration’s approach to balancing the 2020 budget is asking the wealthy to pay their fair share. Essential to that mission is passing a Fair Tax in 2020 with strong support from Illinois voters,” the statement said. “It is essential that we find other progressive revenue sources in order to build financial sustainability for the future.”

The state-city power struggle came into full view during Lightfoot’s address during which she tied the city’s woes to getting help from Springfield.

On Friday, the mayor said it will take “political will” to get a Chicago casino and fix the city’s pensions. She said she’ll work to convince the state’s most powerful leaders that “there is no more road to travel now.”

“If we’re forced to go it alone in essence, our choices are really limited — property tax increases, cutbacks of services, potential layoffs,” Lightfoot said Friday. “That’s a nightmare scenario. And that’s the scenario that I not only want to avoid, we can avoid it, if we get partnership from Springfield.”

“The thing that holds us back outside of a constitutional amendment is political,” Lightfoot also said of a pension consolidation hope. In the Thursday evening address, and again on Friday, the mayor warned of a “very substantial” property tax hike without help from Springfield.

So how does a first-time mayor get that “political will?”

“It means, first and foremost, a recognition that there’s no more road to travel now. You know, the expression kicking the can down the road. There’s no more road. And I can’t find the can,” Lightfoot said. “So, first you got to get people to believe that this is the time. And then if you get people to believe in. Then let’s come together in a way that solves the problem.”

Lightfoot said she’s mindful the city is not alone its overwhelming pension mess.

An independent casino consultant earlier this month shot down the tax structure of a Chicago casino, bringing the plans to a bit of a halt. Lightfoot said the taxes “are about 22 times the taxes that other states and municipalities charged.”

“One of our primary hopes that we can work together, the legislative leaders and really, members across the aisle, to get a tax structure that sees us standing up for a Chicago casino, which inures not only just to the benefit to the city but the state. Part of the state’s capital plan is focused on revenue coming in from casinos and also repatriates about $260 million a year that’s going over the border to Indiana.”

Lightfoot would not specify whether she’d support a downtown casino, should the tax structure be changed to her liking.

The mayor also said she’s looking to the state to pass a graduated real estate transfer tax — and will put pressure on Pritzker to have Chicago be a part of a task force set up to handle pension consolidations.

“We think think that the only fair thing to do, and the only reasonable thing to do, is to make Chicago part of that conversation as well,” Lightfoot said. “And then look at a larger structural issue that are driving our increasing pension debt and insolvency.”

The governor’s office on Friday afternoon said the city will be included after initial recommendations are made by the task force.

“The pension consolidation task force has been working hard since the winter to develop recommendations to address problems specific to the financial challenges of small downstate police and fire pensions,” Pritzker spokeswoman Emily Bittner said.

“We expect that they will submit recommendations for action this fall based on their mandate, but after we receive those initial recommendations, the task force could explore additional proposals related to pensions, including the city of Chicago funds.”