The Fair Tax amendment SJRCA 1 moved from the Senate to the House with a full head of steam and a few pieces of baggage. If approved by the voters in November 2020, the amendment will enable the State of Illinois to have a graduated income tax. Several other proposals, which are dependent upon the passage of the amendment, moved over to the House. All three of the companion proposals contain the following language “but only if an amendment to the Illinois Constitution permitting the taxation of income at a graduated rate is adopted prior to that date by the voters of Illinois.”

SB 687 imposes a number of provisions that alter taxation on corporations and individuals:

  • For taxable years after 2021, the tax on corporations shall be imposed at the rate of 7.99% of the taxpayer’s net income for the taxable year.
  • The bill also adjusts the Local Government Distributive Fund to provide that the transfer shall be equal to 10.75% of the amount that would have been generated if the tax had been imposed at the rate of 3% for individuals, trusts and estates and at the rate of 4.8% for corporations
  • Implements a child tax credit.
  • Provides that taxpayers who are required to file a federal joint return shall file a joint return with the state.
  • Provides that the income tax credit for property taxes shall be equal to 6% (currently 5%) of real property taxes paid by the taxpayer during the taxable year on the principal residence of the taxpayer.

SB 689 relates to the Illinois Estate and Generation-Skipping Transfer Tax Act and provides that no tax shall be imposed for persons dying on or after Jan. 1, 2021 or for transfers made on or after Jan. 1, 2021.

SB 690 provides that, beginning in levy year 2022, for taxing districts that are school districts (other than qualified school districts), “extension limitation” means 0% or the rate of increase approved by the voters (currently, (a) the lesser of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year or (b) the rate of increase approved by voters). The proposal defines a “qualified school district” as a school district that certifies to the county clerk that the district: (i) submitted a claim or claims to the Illinois State Board of Education for reimbursement of certain state mandated categoricals for the school fiscal year immediately preceding the levy year and received reimbursement for those state mandated categoricals that was less than 97% of the district’s claims; or (ii) did not receive the minimum funding required for that school district under the evidence-based funding formula. Requires the state board of education to certify to each school district whether or not the school district is eligible for designation as a qualified school district.

Senate committee bills 

HB1472 amends the Downstate Teacher Article of the Illinois Pension Code. In the provision defining “eligible employment” for the purpose of allowing a teacher to return to teaching in subject shortage areas without impairing his or her retirement status or retirement annuity and changes the ending date of the employment from no later than June 30, 2019 to no later than June 30, 2021. The IEA supports this bill. This bill passed out of the Senate Government Accountability and Pensions Committee with a vote of 9-0.

HB1554 provides that on or before Jan. 1, 2020, the Task Force shall prepare and submit a report to the General Assembly and the report shall, at a minimum: (1) recommend how the state can keep employers and jobs in Illinois; (2) identify and describe best practices to prevent outsourcing of Illinois jobs; and (3) identify employment sectors most affected by outsourcing. The IEA supports this bill. This bill passed out of the Senate Executive Committee with a vote of 16-0.

HB3096 provides that as an alternative to certain other procedures, a taxing district may increase its aggregate extension if the taxing district obtains referendum approval as provided in the amendatory Act. The IEA supports this bill. This bill passed out of the Senate Revenue Committee with a vote of 7-0.

HB3213 amends the Downstate Teacher Article of the Illinois Pension Code. In the definition of “teacher”, removes a provision specifying that an annuitant receiving a retirement annuity under the Chicago Teacher Article, who is employed by a board of education or other employer as permitted under specified provisions, is not a “teacher” for purposes of the Downstate Teacher Article. The IEA supports this bill. This bill passed out of the Senate Government Accountability and Pensions Committee with a vote of 9-0.

House committee bills

SB28 provides that for a pupil of legal school age and in kindergarten or any of grades one through 12, a day of attendance shall be counted only for sessions of not less than five clock hours of school work per day. The IEA supports this bill. This bill passed out of the House Elementary & Secondary Education: Curriculum & Policy Committee with a vote of 19-0.

SB1213 says each school district shall, in good faith cooperation with its teachers or, if applicable, through good faith bargaining with the exclusive bargaining representative of its teachers, develop and implement an appeals process for “unsatisfactory” ratings that includes, but is not limited to, an assessment of the original rating by a panel of qualified evaluators agreed to by a joint committee that has the power to re-evaluate and re-rate a teacher who appeals. The IEA supports this bill. This bill passed out of the House Elementary & Secondary Education: Administration, Licensing & Charter School Committee with a vote of 5-3.

SB1460 SA 1 Senate Committee Amendment 1 provides that if adequate funds are available, incentives under the program must include a one-time incentive of $3,000 payable to National Board certified teachers teaching in Tier 1 rural or remote school districts, an annual incentive of $3,200 for National Board certified teacher rural or remote candidate cohort facilitators, and an annual incentive of $2,500 for National Board certified teacher rural or remote liaisons. Makes the program applicable to qualified educators who are employed by, or retired from, school districts (rather than just employed by school districts) and who are in the process of obtaining licensure through the National Board for Professional Teaching Standards. The IEA supports this bill. This bill passed out of the House Elementary & Secondary Education: Administration, Licensing & Charter School Committee with a vote of 8-0.

Senate chamber

SJRCA1 removes a provision that provides that a tax on income shall be measured at a non-graduated rate. Provides that the General Assembly shall provide by law for the rate or rates of any tax on or measured by income imposed by the State. Provides that the highest rate imposed on corporations may not exceed the highest rate imposed on individuals by more than a ratio of 8 to 5. The IEA supports this bill. This bill passed out of the Senate with a vote of 40-19 and moves on to the House.

Important dates

A schedule for each chamber can be found on the General Assembly website.

Next week

  • Both the Senate and House are in session next week.
  • The Senate and House are scheduled to remain in session through May 31.