Republican challenger David Paul Blumenshine’s main criticism of state Rep. Dan Brady ahead of their March 17 primary rematch is that Brady voted to “raise our taxes 20 different ways” last year.
That is not true.
Yes, Brady voted in favor of the $45 billion capital bill, which doubled the gas tax, raised vehicle registration fees, and created a new tax for parking garages. But several of the “20 tax and fee hikes” cited by Blumenshine are unlikely to impact average taxpayers directly, or would be easy to avoid. Others are taxes that people should have been paying all along, and the state is only now collecting.
Blumenshine repeated these claims during a WGLT candidates forum Feb. 13.
“Rep. Brady voted yes this past summer to raising our taxes 20 different ways with a $45 billion spending bill,” he said. Later, he added: “People are leaving (Illinois). This exodus isn't going to stop. Taxation is driving that. The tax that Rep. Brady voted for. He voted yes to double our gas tax. And there were 19 other taxes included in that.”
Brady pushed back on that “20 taxes and fees” claim during the forum.
“That’s fiction, and you’re the king of it,” Brady said.
When asked by WGLT to provide a list of the 20 taxes and fees that Brady raised, Blumenshine provided a link to an online article by the conservative think tank Illinois Policy Institute, called “20 Tax and Fees Hikes Totaling $4.6 Billion Coming Soon For Illinoisans.”
“The Illinois Policy sheet that my opponent just takes as the gospel is not factual,” Brady said Thursday.
In response to WGLT’s questions about his claims, Blumenshine did not back away from them.
“When we see fees going up, and when we see an increase in what the consumer or taxpayer has to pay, and the government itself doesn’t do anything to curb spending, that is the overarching issue,” Blumenshine said.
Let’s take them one by one.
#1 - Expanded Tax Amnesty Program
WGLT Rating: False
This program, which ended in November, allowed qualified taxpayers to pay off any outstanding state tax liability (from 2011 to 2018) and have corresponding penalties and interest forgiven.
The program brought in $240 million in revenue, according to the Illinois Department of Revenue. But that was money that taxpayers already owed. There were no tax or fee increases.
#2 and #3 – Cannabis Legalization
WGLT’s Rating: Half True
Brady voted against legalizing cannabis. It passed anyway.
Brady then voted in favor of the budget overall, which included tax revenue from cannabis sales and charging licensing fees for cannabis businesses.
Blumenshine said he would’ve voted against both legalization and collecting any revenue from it.
#4 – Trucking Registration Fee Increase
WGLT’s Rating: Mostly False
Yes, one of many fee increases included in the $45 billion capital bill was an increase in truck registration fees, between $50 and $100.
But not mentioned by Blumenshine or the Illinois Policy Institute is the associated repeal of the commercial distribution fee (CDF), which the Illinois Trucking Association had long sought to kill. They considered it a hidden sales tax on truck license plates that cost the industry nearly $1 billion.
The CDF’s repeal means an average truck owner will see up to a $300 decrease in fees overall, said Illinois Trucking Association executive director Matt Hart.
“Of all the fees that were proposed in the capital bill, nobody got a fee reduction except for the trucking industry,” Hart said. “We actually applaud the legislators for taking a tough vote.”
Brady also said he worked to negotiate the $100 registration fee increase down from an initial proposed level of $1,000. Hart confirmed there was an initial proposal that was “higher than what we ended up settling on,” and that lawmakers responded to their concerns.
“That took some pretty intense negotiation,” Brady said. “Those are the types of things that don’t grab headlines, that are being negotiated and worked on.”
#5 and #6 – Online Sales Taxes
WGLT’s Rating: Half-True
What’s true is that certain remote online retailers—those without an office, inventory, or storefront in Illinois—will have to begin collecting locally imposed sales taxes starting in 2021. Those are the sales tax dollars that get routed to the City of Bloomington or Town of Normal. It will impact only those out-of-state businesses with over $100,000 in sales coming into Illinois.
“This isn’t Grandma selling needlepoint projects out of her basement,” said Carol Portman, president of the nonpartisan advocacy group Taxpayers’ Federation of Illinois.
Still, consumers could see the cost of certain items go up accordingly.
“There’s a smidge of accuracy to that one,” Portman said.
Blumenshine also claims Brady supported “expansion of online sales taxes” in a second way, through a new law requiring online marketplaces (like Etsy or eBay) to collect sales tax on behalf of their sellers. However, Portman noted that consumers were already obligated to report any unpaid taxes on online purchases when filing their state tax returns.
In other words, the tax was always owed. It’s just that consumers were getting out of having to pay it. The change—aimed at leveling the playing field between brick-and-mortar Illinois stores and online competitors—was praised by the Illinois Retail Merchants Association.
“There’s no tax increase. It’s just increased tax compliance,” Portman said.
#7 – Doubling motor fuel tax
#8 – $50 increase in vehicle registration fee
#9 – $237 in electric-vehicle registration fee
#10 – $1 per pack cigarette tax increase
#11 – E-cigarette tax increase
#12 – Parking garage tax
WGLT’s Rating: True
Brady and other Republicans supported the $45 billion capital bill—the state’s first major infrastructure plan in a decade. And yes, the plan raises all sorts of fees and taxes.
State Reps. Dan Brady, left, and Tim Butler, center, take a ride on one of UCM's asphalt laying machines during a visit to a construction site on I-74 on in July 2019.Credit Mary Cullen / WGLTEdit | Remove
Brady said it’s worth it. McLean County alone is expecting to receive $173 million for roadwork and bridge repairs over the next six years. The capital plan also includes over $50 million for Illinois State University’s long-awaited fine arts complex.
Brady said Republicans in Springfield, while in the minority, successfully negotiated lower tax and fee increases than Democrats had sought.
“Our schools and universities like Illinois State have and will receive sorely needed capital improvements,” Brady said. “Saying no in a time of desperate need is easy. Voting yes and negotiating as many new taxes out of the capital bill with the Democrats was hard.”
Blumenshine attacked Brady repeatedly during the WGLT forum about his support for it.
“When are we going to stop playing the shell game? I don’t care if you call it a capital bill—vertical, linear. We don’t have the money,” Blumenshine said.
#13 – New tax on managed care health insurance
WGLT’s rating: True
This one affects managed care organizations (MCOs) that participate in Medicaid, a joint federal-state program that provides healthcare for low-income individuals.
The measure, approved last summer and supported by Brady, requires all Medicaid MCOs and other health maintenance organizations to pay a per member tax to the state, similar to what’s done in other states.
The goal was two-fold, according to the Illinois Health and Hospital Association. It would lessen Medicaid’s reliance on volatile state general revenue fund dollars, by directing $390 million in new revenue into the dedicated Healthcare Provider Relief Fund (HPRF). That could help the state maintain a more regular payment cycle for its bills.
Second, the new tax revenue will be used to attract more matching funds from the federal government. It’s projected the new tax will infuse $500 million in new revenue to the Illinois Medicaid program and close a portion of the state’s budget deficit, according to the Illinois Association of Medicaid Health Plans (IAMHP), which supported the change. The group said it will provide “much needed funding and stability to the Medicaid program.”
#14 – Decoupling from federal tax code on foreign repatriated income
WGLT’s rating: True, with limited impact
In 2017, Congress approved a tax cuts package. Included was an incentive to encourage companies keeping money overseas for tax reasons to “repatriate” it—or bring it back to the U.S. If they did, the money would be taxed at a lower rate than normal.
Last summer, state lawmakers (including Brady) voted to “decouple” Illinois’ rules on foreign repatriated income from the federal tax code. That means a company will essentially be required to add back in that repatriated deduction when calculating their income for state tax purposes.
One could argue this simply maintains the status quo—what was happening before the federal tax cuts were passed. The Illinois Policy Institute, however, contends this will impose higher state taxes on foreign-derived corporate income.
#15 – Licensing for casino expansion
#16 – Licensing for legal sports betting
#17 – Progressive tax on gambling proceeds
#18 – New tax on legal sports betting
#19 – Increased tax on video gambling machines
WGLT’s rating: True, with limited impact
The “vertical” (buildings) part of the capital plan will largely be paid for using money from a major expansion of gambling and sports betting in Illinois.
And yes, lawmakers approved new or higher taxes for gambling. The video gaming terminals (VGT) tax will go up, from 30% to 34%. The state will impose a 15% tax on adjusted sports wagering receipts for each month. Casinos will pay upfront license fees.
However, unlike the increased gas tax or vehicle registration fees, Illinois residents can avoid these ones fairly easily. Just don’t open a casino or choose to bet on the Cubs.
#20 Cap on trade-in sales tax exemption
WGLT’s rating: True
This measure—also part of the capital bill—impacts someone who’s trading in a car when buying another one.
Until now, a consumer could use the value of their trade-in to lower the sales taxes owed on their purchase. Moving forward, the value of that trade-in (for tax purposes) is capped at $10,000, meaning someone trading in something pricier than that will pay more in sales taxes.
This cap is expected to generate $40 million in new revenue.