Illinois Millionaires Tax Debate Intensifies as Democrats Split Over Property Tax Relief and School Funding

Illinois House Speaker Emanuel Chris Welch has endorsed a 3 percent tax on millionaires but remains neutral on how to distribute the potential billions in revenue as two competing plans fight for passage before the November ballot.

The debate centers on whether to prioritize property tax relief through direct homeowner rebates or split the revenue between schools and property tax relief. Both plans seek to amend the Illinois constitution to allow a graduated income tax on those earning more than $1 million annually.

The Two Competing Plans

State Rep. La Shawn Ford of Chicago has proposed an amendment that would allocate all proceeds toward property tax relief in the form of $1,500 rebates per property owner. State Rep. Natalie Manley of Joliet has filed a competing plan that would divide the revenue 50 percent to public schools and 50 percent toward property tax relief.

Neither bill has reached a House vote as lawmakers approach a May 3 deadline to submit constitutional amendment proposals for the Nov. 3 general election ballot.

Speaker Welch said in an interview with WBEZ that he would like to be part of a consensus on both the tax and where the money should go. He called the tax a reasonable way to address what he terms an affordability crisis for Illinois residents.

If we give our schools more, maybe we can pass legislation that restricts how high they can raise their property tax levies, Welch said.

What the Numbers Look Like

A new study conducted by researchers at the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign projects that a 3 percent surtax on millionaires could generate $3.8 billion in fiscal year 2027 and $4.4 billion by fiscal year 2030.

The researchers proposed three spending options:

• Option 1 would provide a $1,500 rebate to approximately 3 million Illinois homeowners, cutting the average property tax bill by about 15 percent at first
• Option 2 would use revenue to fully fund public school districts, covering an adequacy gap of about $3.1 billion statewide
• Option 3 would split the revenue between both property tax relief and education funding

The study argues that states that have passed similar tax increases on higher earners also saw economic benefits. Researchers suggested pairing the tax with a lockbox to dedicate the new revenue to specific purposes.

Governor Pritzker Supports the Concept

Gov. JB Pritzker has expressed support for the concept of an additional income tax on the states highest earners. The billionaire governor reported a net income of $10.3 million on his 2024 tax returns.

To pay the bills of the state of Illinois, its fairer if the wealthiest people in the state and the wealthiest corporations in the state pay more than average folks, working folks, and the most vulnerable, Pritzker said at a press conference earlier this year.

The 2020 Fair Tax Amendment attempt to change the state constitution failed with 53 percent of voters rejecting the measure. That proposal sought to raise the tax rate starting on incomes of $250,000 without promising to dedicate added revenue to a specific issue.

Property Taxes Keep Rising

A March analysis by Cook County Treasurer Maria Pappas found that property tax bills rose at twice the rate of inflation for the past 30 years in Chicago and suburban Cook County. The average property tax bill is composed of about 62 percent school funding according to the report.

The scourge of rising property taxes is a potent electoral issue, underscoring how a fall ballot initiative built around property tax relief could offer political dividends for Democrats, noted the Chicago Sun-Times.

League of Women Voters Backs Balanced Approach

The League of Women Voters of Illinois supports HJRCA21, a bill that adds 3 percent to the individual income tax rate for incomes over $1 million and requires the resulting funds to be distributed 50 percent between property tax relief and education.

An added tax on millionaires would require approval from both lawmakers and at least a majority of voters in an election. The researchers argued that states that have passed similar tax increases on higher earners also saw economic benefits.

This was a unique topic that intersects with other policy issues that impact the health and welfare of the state, and that makes it just an ideal issue for us to address, said Robert Bruno, a professor at UIUC and one of the study authors.

The Path Forward

Both Ford and Manley plan to lobby Democratic caucus leaders on their respective plans. Ford said he would work hard to lobby the leader of his Democratic caucus on a plan that, as of now, leaves out school funding.

Manley emphasized that she wants schools to be the gold standard and does not want to leave schools behind in all of this.

The amendment to the state constitution would then need to be voted on by residents in an election. If 60 percent vote to approve the change or a simple majority of 50 percent plus one of all voters who cast ballots approve, then the change would be enshrined in the states constitution.

If the tax change is approved, the researchers proposed three options for how to spend the new revenue. As an example, a 3 percent surtax could generate about $3.8 billion in fiscal year 2027 and $4.4 billion by fiscal year 2030.

What Happens Next

An early May deadline looms to get a plan before voters this fall. The House Revenue and Finance Committee will meet to discuss the bill. This source of education funding could relieve future budget pressures on other priorities.

The researchers estimated that the rebate would cut the average property tax bill by about 15 percent at first. The rebate amount could increase as revenues increase in future years. The remaining amount could be given to school districts through property tax relief grants or to make the states community colleges tuition free.

Sources

• House Speaker backs millionaires tax, but Democrats split over how much to devote to property tax relief, Chicago Sun-Times, https://chicago.suntimes.com/springfield/2026/04/13/chris-welch-millionaires-illinois-house-democrats-property-tax-relief
• Illinois millionaire tax could help curb property taxes, boost education funding, study says, FOX 32 Chicago, https://www.fox32chicago.com/news/illinois-millionaire-tax-explainer
• Take Action: Adopt a Millionaires Tax in Illinois, League of Women Voters of Illinois, https://www.lwvil.org/news/action-alert-millionaires-tax