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Pritzker On Defeat Of Graduated Income Tax: 'There Will Be Cuts. And They Will Be Painful'

CHICAGO (CBS) -- Showing his disappointment in the graduated income tax being defeated by Illinois voters on Tuesday, the governor said as a result, cuts will be coming, and "they will be painful."

"As we in Illinois are racking up more bills than we have in revenues. It's unsustainable," Pritzker said, who blamed his predecessor Bruce Rauner for not passing a state budget for two years.

"Had the fair tax passed, we would have been on a course toward long term stabilization of our state's finances, balancing the budget, eliminating the backlog, making our pension payments and investing in a rainy day fund in a way that would start to unburden the working families of our state," Pritzker said. "But the opponents of the fair tax lied about what would happen if it passed, and they left all of the working people of Illinois holding the bag."

With 97% of the votes counted, unofficial results showed 55% of voters said no to the tax. Around 45% voted for the amendment. However, election officials in Illinois have cautioned that the number of outstanding mail-in ballots could change affect the results of close races in the coming days and weeks. Mail-in ballots postmarked by Election Day can be counted if they arrive with election authorities by Nov. 17.

The outcome of Tuesday's vote handed Gov. J.B. Pritzker the first major defeat of his 22-month tenure. The Democrat campaigned on establishing a progressive tax which he said would make tax payments the same or lower for 97% of the state while those making more than $250,000 would pay on a graduated scale.

"Illinois's fiscal problems haven't gone away. We now sit at a crossroads. Our state finances, still require fundamental structural change," Pritzker said. "I promised to be a governor who balances the budget and pays the bills that my predecessor left behind. I promised to make sure that our kids get a good education that we invest in job creation and that we build a better future for Illinois. There will be cuts,
and they will be painful."

Pritzker warned that defeat of the amendment would mean a general increase of the flat rate, 15% to 20% across-the-board cuts in spending or other painful measures.

"If you set aside federally protected programs court ordered obligations and our bond and pension debt, we would have to reduce discretionary spending in our state by approximately 15%," Pritzker said. "That's 15% fewer state troopers. That's 15% fewer students going to college. 15% fewer working parents, receiving Child Care Assistance and 15% less money for your local public schools, which likely means that your property taxes will increase."

The current flat-rate is 4.95%. The amendment would have applied that rate, or a lower one, to people making less than $250,000. For those earning more than $250,000, the rate would climb and top out at 7.99%

Both sides of the debate invested heavily in their positions, spending a combined $100 million on advertising. Opponents contended that Pritzker and fellow Democrats who control the General Assembly would not use the extra revenue to pay debts but to use it for new and expanded programs that the state can't afford.

As for the rich, critics claimed they would leave the state, leading to a greater burden on middle-income families.

"It is clear that Illinoisans do not trust this Legislature and this administration to spend more of their precious tax dollars without restraint," Illinois Chamber of Commerce President and CEO Todd Maisch said in a statement Wednesday.

Approving an amendment to the Illinois Constitution requires three-fifths majority approval, or 60% of all who vote on the question.

The governor said he will talk to lawmakers about tackling the budget problems that he said would have been helped by the passage of the graduated income tax.

"I'll be talking with the leaders in the General Assembly about our path forward. But here's what we know for sure. I promise to be a governor who balances the budget and pays the bills and my predecessor left behind. I promised to make sure that our kids get a good education that we invest in job creation and that we build a better future for," Pritzker said.

The Associated Press contributed to this report. 


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