Fair Tax to Fund Education

Compared to the rest of the country, Illinois is behind the times with its tax structure. Most states with income taxes (and the federal government) use a progressive rate structure. In November 2020, Illinois voters will have a chance to fix this. Voters will determine whether to amend the State Constitution to adopt a “fair tax” structure. This is a consequential decision for Illinois education.

Here’s why. Many schools in Illinois are severely underfunded; overall, the State falls about $7 billion short of full funding. The evidence-based formula for school funding which passed in 2017 established a goal of adding a minimum $350 million per year and distributing those dollars first to the schools that need it the most. Good things have happened since the new formula became law. Students from Cahokia to Danville and Chicago to Zion are benefiting. But we can’t forget that it replaced the most inequitable school funding system in the country and won’t go from last to even the middle of the pack without being vigilant.

In fact, as inflation makes the costs of education more expensive, that $350 million won’t be enough to keep pace, and the equity gap between the best- and worst-funded schools in Illinois will increase.

Currently, the State Constitution requires a flat income tax. That means a person earning the minimum wage and a millionaire are taxed at the same rate of 4.95%.

Should the Fair Tax pass, the specific tax rates that would kick in have already been determined by legislation passed in May 2019. Ninety-seven percent of Illinoisans would see a small reduction in their tax rate, while individuals earning over $750,000 and joint tax filers earning over a million dollars would pay just under 8%.

In order for the Constitution to be amended, at least 50% of everyone in Illinois who votes in the November 2020 election, or at least 60% of those who vote specifically on the Fair Tax question, must support it.

Reaching equitable and adequate funding depends on Illinois’ ability to have sustainable revenue sources and addressing inequitable funding structures. Otherwise, the momentum grinds to a halt. Illinois students need the fair tax to pass.

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