Chicago entrepreneur Erik Severinghaus is among the 3% of Illinoisans wealthy enough that he’ll have to pay more next year under a graduated income tax if voters approve a change to the state constitution on Nov. 3.
But Severinghaus said paying more isn’t his problem with what supporters call the “fair tax,” which would allow lawmakers to scrap Illinois’ existing flat-rate system and tax Illinoisans who earn more than $250,000 annually at a higher rate.
The reason he donated $1,000 to a campaign opposing the constitutional amendment is that he doesn’t trust Springfield legislators to spend the extra revenue — estimated at $1.2 billion over the first six months — wisely.
“I am all for paying my fair share. I don’t actually have a philosophical problem with it,” Severinghaus said.
While Severinghaus’ donation reflects a skepticism shared by voters statewide, it is pennies compared to the big money behind both campaigns.
Two billionaires account for almost all of each side’s total fundraising. Gov. J.B. Pritzker has donated $56.5 million to support the amendment, while Ken Griffin, CEO of investment firm Citadel and Illinois’ richest man, has dropped $46.8 million to oppose it.
How each side raised the remainder reveals the institutional forces trying to shape public opinion through the two aggressive and expensive campaigns.
Unions and grassroots groups are supporting the fair tax campaign with non-monetary, in-kind contributions of goods or services — mostly hours of time from organizers and field workers. Donations to the opposition come from some of the state’s richest men, Illinois State Board of Elections data show.
“It’s important to remember people have been fighting for a fair tax for a decade plus,” said Jake Lewis, a spokesman for a committee supporting the change. “ ... We’re seeing proponents really engaging across the board of the last few years.”
The debate goes as far back as the 1930s, when the state Supreme Court rejected a graduated tax, the Associated Press reports. In 1969, delegates at a convention to rewrite the state constitution considered a graduated system, but ultimately rejected it.
Contribution reports from the state elections board show how committees raised money and spent it. What’s not yet clear is who will win.
The Pritzker campaign, continued
After Pritzker, a 55-year-old businessman worth $3.4 billion, was elected governor in November 2018, his campaign didn’t disappear. Elements of it morphed into a nonprofit focused on achieving his agenda, including the promise of a graduated income tax.
Think Big Illinois was founded in February 2019 with two objectives: get the constitutional amendment on the ballot, then convince Illinoisans it’s a good idea to join 32 other states, the District of Columbia and the federal government in using a graduated income tax.
Headed by Quentin Fulks, a former campaign staffer for Pritzker, Think Big Illinois achieved the first goal in May 2019 when a Democratic supermajority in the General Assembly approved the amendment for the November ballot.
Then the organization formed the Vote Yes for Fairness, which has flooded television, the internet and social media with advertising.
Other than a $250 contribution from a Chicago lawyer in February, the committee’s money comes from Pritzker’s $51.5 million, donated in June.
“We have one billionaire who’s spending money to raise his own taxes,” said Lara Sisselman, a spokeswoman for both Think Big Illinois and Vote Yes for Fairness. “Who’s on the other side? Billionaires who are spending their money because they don’t want to pay more in taxes.”
Pritzker said Wednesday he believes opponents of the tax are trying to mislead the middle class and retirees into believing they will eventually pay higher rates.
“I think we all know the people who are supporting the ‘vote no’ campaign are essentially working against the middle class and working against people who can least afford to pay the taxes that people on the other side would like them to pay for them,” Pritzker said at a news briefing in Chicago, “and that’s why I’m on the other side.”
From January to September, the committee spent more than $27.3 million on everything from rent to video production. But outside of payroll, most of the money went to consultants. The committee paid one liberal political consulting firm, the Washington, DC-based Waterfront Strategies, $7.4 million, and paid another, Grassroots Media, $9.7 million for buying ads.
The Coalition Campaign
While one key committee oversees the spending of Pritzker’s money, another is responsible for collecting millions more from dozens of grassroots activist organizations and influential labor unions.
The Vote Yes for Fair Tax committee relied on in-kind, or non-monetary, donations from more than 30 groups rather than one billionaire’s massive check.
The average contribution was worth roughly $2,200 and 98.7% were in-kind, according to Illinois elections data, although the committee also accepted a total of $1.2 million in monetary donations from seven organizations.
The most valuable in-kind donations came from five groups, all Chicago-based:
- Grassroots Collaborative, a nonprofit coalition of 11 groups that focus on community organizing, social justice and labor rights, among other issues.
- AFSCME Illinois Council No. 31, representing more than 75,000 public service employees.
- Chicago Federation of Labor and Industrial Union Council, a chapter of the AFL-CIO, the largest federation of unions in the nation.
- Shriver Center on Poverty Law, a public policy organization focusing on racial inequity and poverty
- ONE People’s Campaign, a community organizing group
Each group harnessed its network of volunteers and workers for canvassing, phone and text message banking, social media marketing, parking, mileage, transportation and child care, among other in-kind contributions totaling nearly $379,000.
Contributing organizations have two things in common, said Lewis, spokesman for Vote Yes for Fair Tax. They want an Illinois’ tax system “more fair for working people,” and new investments in education, health care and social services to restore the devastating cuts from the 2015-2017 budget impasse under Republican Gov. Bruce Rauner’s administration.
They believe wealthier people should bear that burden.
“You’re seeing a number of organizations who represent working people, regular people who are trying to take care of themselves and their families, their kids, care for elderly relatives, one one side,” Lewis said. “Then on the other side, you have some very, very wealthy special interests who frankly don’t seem to want to pay their fair share in taxes.”
Opposing the graduated Income Tax
Behind the main committee opposing the tax change are only some of Illinois’ wealthiest executives.
The bulk of the money in the anti-graduated income tax campaign goes through the Coalition To Stop The Proposed Tax Hike Amendment committee.
The biggest contribution came from Griffin, the state’s wealthiest man, who gave nearly $46.8 million to the anti-tax campaign as of Sept. 30. Following him are $100,000 donations from Chicago-area executives or business groups. The average donation, not counting Griffin’s, was just over $34,600.
Supporters of the coalition agree that Illinois lawmakers can’t be trusted with “a blank check,” said committee spokeswoman Lissa Druss.
“Now the Springfield politicians are back asking us to trust them with new unyielding power to raise our taxes and create as many brackets whenever they want in the midst of a once-in-a-lifetime pandemic,” Druss said.
But it’s not just Illinois’ wealthiest executives who oppose the change. Farmers and small businesses also oppose it, though the money flowing through their campaigns is relatively humble compared to the coalition, according to state elections data. The No Progressive Tax Illinois Farm Bureau committee raised $13,515 in individual donations and $710,000 from the Illinois Agricultural Association from July through September.
The Illinois Farm Bureau was involved as far back as 1968 in discussions to oppose a graduated income tax structure, said Kevin Semlow, director of state legislation for the organization made up of farmers statewide.
“These are the same discussions we’re having today that they had then,” he said.
Dues-paying members felt strongly that the flat-rate tax system is fairer, so the bureau started its own committee to print and distribute yard signs, mail postcards, buy billboards and take out advertising.
“This was a clear issue for our members that was very important. They were willing to step up and set side funds to carry out the message to our membership and then voters in general that the right vote is a ‘no’ vote,” Semlow said.
While farmers and business groups such as local chambers of commerce did their part, the people who would be immediately affected by the graduated tax, such as Severinghaus, dominated the campaign.
“This isn’t about what I would be paying next year. The thing that matters to me here is the sustainable trajectory of the state” Severinghaus said. “ ... I love building businesses here. I love finding ways to employ more people. I love finding ways to give more back to the community. But there does come a time where you say, ‘Does it make sense to continue to live here versus Texas or Florida or any number of states that have lower or no income tax?”
Kelsey Landis is a reporter for the Belleville News-Democrat, a reporting partner of St. Louis Public Radio.
