Some working Illinois families get a temporary $15 million break

Mayor Lori Lightfoot is joining forces with a former mayoral rival to provide a temporary $15 million break for working families hardest hit by the coronavirus pandemic.

Roughly 41,000 Illinois households with incomes low enough to qualify for the federal Earned Income Tax Credit will not have unpaid traffic fines, unpaid parking tickets and outstanding court judgments withheld from their 2020 state income tax refunds.

For the last decade, the state comptroller’s office has been empowered to “intercept” those outstanding fines and forward them to municipalities, just as it garnishees the wages of parents who fail to make child support payments.

But working families run by essential workers have borne the brunt of the pandemic. They’re still struggling to pay for rent, groceries and health care after having their hours cut.

That’s why Lightfoot and her vanquished mayoral rival, Illinois Comptroller Susana Mendoza, decided to give those working families a break — by giving them their full state income tax refund.

It’s not a permanent break or amnesty. It’s a temporary reprieve that, for now, impacts only state income tax refunds for 2020. The fines still must be paid, and cities like Chicago retain the power to turn outstanding fines over to collection agencies.

Still, Mendoza estimated the temporary break will put $15 million back into the pockets of 41,000 of Illinois neediest households.

To qualify for the Earned Income Tax Credit, a family of four must have a maximum annual income of $56,844. The cut-off for single taxpayers is $15,820 a year.

“Our office does not take this action lightly. The COVID-19 pandemic has also hit cities in Illinois and small towns in our state hard. We recognize cities have a right to collect legitimate debts,” Mendoza said.

“But we ask cities and towns to recognize, though, as we have, that giving struggling families at the margins a break has to take priority this year. ... We may defer it next year. It all depends how we recover from the pandemic. If we recover quickly, then it may be collected. If we don’t, it’s very likely that I’ll defer one more year. But forgiveness is not something I have any legal authority to do.”

Lightfoot praised her former mayoral rival for providing “welcome financial relief” to “working families that have carried the heaviest burden from the COVID-19 crisis with hours cut, jobs lost and other financial burdens.”

The mayor recalled growing up in a family living under similarly tough circumstances in Ohio.

“I can still remember the stress that we all felt worrying about being able to pay utilities. ... Worrying about whether or not you could pay your rent or your mortgage. Whether your car was gonna be there when you woke the next morning or repossessed because you haven’t paid your bill,” she said.

“Going through that — the stress and the worry is significant and takes a toll. At the time, it feels overwhelming.”

Brent Adams, senior vice-president of policy and communications at the Woodstock Institute, said tax refunds represent “perhaps the only opportunity of the year” for low-income families to “make a concrete improvement” in their finances.

“It is very expensive to be poor. High interest rates, overdraft fees, late fees — these are all penalties for being poor. Key to combatting structural inequity is to put more money in the pockets of lower-income folks, who are disproportionately people of color,” Adams said.

Lightfoot campaigned on a promise to bring equity to an overly punitive ticketing, towing and booting policy that has unfairly targeted minorities and forced thousands into bankruptcy.

She promised to stop booting for non-moving violations, “sunset” red light cameras being used for “revenue — not safety” — and abolish city stickers that are the source of many tickets.

The mayor has yet to honor any of those promises. In fact, motorists caught on speed cameras driving from 6 mph to 10 mph over the speed limit have started receiving $35 ticket in the mail, under a crackdown that aims to reverse a 45% surge in traffic deaths.

Mendoza finished fifth in Round One of the 2019 mayoral sweepstakes with just over 9% of the vote. She was one of several mayoral challengers done in by her ties to indicted Ald. Edward Burke (14th) and former Illinois House Speaker Michael Madigan (D-Chicago).

Lightfoot owes her landslide election to the Burke scandal.