When Illinois Governor J.B. Pritzker sought to boost the state income tax on the rich at the height of the pandemic, Ken Griffin used his fortune to torpedo the initiative. The billionaire financier still quit the state for Florida two years later.
Now, a handful of Illinois politicians are once again eyeing a new tax on the highest earners — a move that risks alienating the state's wealthiest residents, including in cash-strapped Chicago.
Next week, Illinois voters will weigh in on a proposed extra levy of 3% on annual incomes of more than $1 million, with the proceeds going to ease property taxes.
The ballot measure is nonbinding, but approval would potentially open the door to a new debate after the failure of Pritzker's 2020 plan, which called for raising state income tax rates on higher earners.
"This time around we don't have Ken Griffin to protect us anymore," said Dan Rahill, a wealth strategist at Chicago-based Wintrust Wealth Management, predicting that higher taxes would prompt more Illinois residents to consider establishing residency in nearby Wisconsin or Indiana. Or Florida.
The latest tax vote will unfold amid a tumultuous budget season in Chicago, where Mayor Brandon Johnson is feuding with the city council and the public-school system over yawning fiscal shortfalls.
Johnson proposed a $300 million property-tax hike this week, breaking a campaign promise, saying the increase was needed to close the city's budget deficit of almost $1 billion.
At the same time, local leaders have increasingly been looking to the city's wealthy to plug budget gaps, even as both Chicago and Illinois contend with persistent population declines and corporate departures.
Backers of this year's proposal say taxing millionaires would bring relief to everyday homeowners struggling to pay Illinois's notorious property levies.
Based on property taxes paid as a percentage of home values, the burden on people in Illinois is the highest in the country except New Jersey, according to the nonpartisan Tax Foundation.
The ballot measure would raise about $4.5 billion, according to a preliminary estimate by the Illinois Department of Revenue.
"This referendum is the first time where people have a specific chance to lay out a plan that can give relief to broad numbers of everyday folks," said Pat Quinn, a former Illinois governor who's spearheading the proposal.
The measure has backing from two of Quinn's fellow Illinois Democrats, US Representatives Danny Davis and Chuy Garcia. Pritzker, also a Democrat, said he believed in a graduated income tax system as the ideal method to lower property taxes in Illinois but said the referendum could be popular with voters.
