* 3/5/26 - CTBA Releases New Report - A Fair Tax: Implementing a Graduated Rate Income Tax to Support Illinois, Volume II...........................

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Buzz Sawyer

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Mar 15, 2026, 5:44:36 PM (7 days ago) Mar 15
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Why Illinois' Tax System Continues to be Regressive

March 5, 2026

New Report

A Fair Tax: Implementing a Graduated Rate Income Tax to Support Illinois, Volume II

Illinois has for decades relied on a flawed tax policy, resulting in both poor revenue generation and tax inequity. A large contributor of this flawed tax policy is the state's flat rate income tax. After the Fair Tax Amendment failed to pass in a referendum in November of 2020, Illinois continues to trail behind in revenue and has fallen to 8th in the nation for tax regressivity in 2024 according to the Institute on Taxation and Economic Policy. The same study found that while the top 1% of earners pay just 7% of their incomes in state and local taxes, the bottom 20% pay 15%, showing that much of the tax burden falls on those earning the least.

 

Often times, Illinois is portrayed as a "high tax" state when the reality is that its average tax burden is middling compared to the rest of the Midwest states; with Iowa, Minnesota, and Indiana all having a higher average state and local tax burden. Amending Illinois' constitution to allow for a graduated rate income tax would decrease tax regressivity and align the state's tax system with much of the rest of the country, ensuring top earners pay their fair share and increasing much needed revenues to fund essential services.


CTBA’s report explains why a graduated rate income tax structure would be beneficial to Illinois. Download a copy of the report HERE

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Follow @ctba_illinois for the latest news of CTBA report releases, events, research facts and important policy updates across all your favorite CTBA topics. 

CTBA Budget Blog: Why We Need to Invest in Regional Universities in Illinois

Despite small but consistent increases in the state general funding to the nine public universities across Illinois in recent years, when accounting for inflation, these annual state appropriations are still 47% less in the FY 2026 budget than they were back in FY 2000. Both EIU and WIU have felt the brunt of this disinvestment, receiving less than half of the funding data and research suggests they should receive. They are also both large employers in their regions and the loss of jobs, decrease in college graduates, and loss of government investment that helps grow the economy would spell continued economic hardship in Macomb and Charleston. Reinvesting in public universities — with a focus on those that have the largest need — would be the right start to strengthening institutions and the students and communities they serve.


Click HERE to read the full blog


CTBA In the News

The News Gazette: Ralph Martire | End the state's cycle of deficits and disinvestment

For the vast majority of the last four decades, Illinois has run a deficit in its General Fund, which is troubling for four reasons. Ralph Martire explains those reasons in his column.

 

Chalkbeat: State lawmakers introduce Chicago Teachers Union-backed bills to increase state education funding

A pair of Illinois state lawmakers introduced legislation that would significantly increase state education funding — an opening salvo in a push by the Chicago Teachers Union and other labor groups to boost money for schools during this spring’s legislative session amid intense financial pressures on the state. To do everything the legislation introduced, the state would have to spend an additional $3.9 billion a year, said Ralph Martire in an interview.

 

Chicago Sun-Times: Illinois lawmakers announce plan to close school funding gap

Lawmakers set a 2027 goal to fund at least 90% of each school’s state funding needs, though it is $5 billion short with just a year to go. “I think they’re trying to put pressure on the General Assembly and governor to do what the state said it would do,” Martire said. “But to live up to its statutory obligations, it certainly needs more revenue.”

 

Block Club Chicago: State Lawmakers Introduce Chicago Teachers Union-Backed Bills To Increase State Education Funding

The proposals would require the state to fully fund its so-called evidence-based formula for schools by a 2027 deadline lawmakers set in 2017 — a goal the state is not on track to meet. Originally published by Chalkbeat.

 

WBEZ: Illinois lawmakers announce plan to close school funding gap

Lawmakers set a 2027 goal to fund at least 90% of each school’s state funding needs, though it is $5 billion short with just a year to go. Originally published by Chalkbeat.

 

Block Club Chicago: Pritzker’s Budget Plan Calls For Education Funding Increases But Falls Short Of Requests

When Illinois’ main funding formula for K-12 schools was established a decade ago — meant to send more dollars to districts with higher needs — lawmakers at the time set a goal to fully fund it by 2027. Gov. JB Pritzker’s budget proposal for next fiscal year wouldn’t do that. If the bill passed as written, it would cost the state an additional $3.9 billion annually, Ralph Martire, the executive director of the think tank Center for Tax and Budget Accountability, previously told Chalkbeat. The proposal is the opening of budget negotiations. State lawmakers are expected to finalize a budget in May.

 

Chicago Sun-Times: By  Ralph Martire: Illinois' budget blues were around long before Trump's cuts

While it’s appropriate to blame President Trump for fiscal difficulties, his shenanigans have simply exacerbated a longstanding structural deficit that’s plagued Illinois' general fund.

 

Fair.org: Corporate Media Mock Chicago Teachers for Trying to Help Their Community

Cites to CTBA’s Fully Funding the EBF: Volume IXreport that states that they will not be adequately funded until 2034.

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