MOORE’S SUMMARY: Hundreds of FFA members milled around the Illinois Capitol in their blue embroidered sweaters on Tuesday for the annual Illinois Agriculture Legislative Day. As state leaders sang their praises and enjoyed baskets filled to the brim with Illinois agriculture products, they were noncommittal on a longstanding idea that aims to help family farmers: estate tax reform.
WHY IT MATTERS: Family farmers often fall into a “land rich, cash poor” category in which the modest income they generate from farming does not reflect the immense value of the land they possess. This means that when a farmer dies, his or her family is often saddled with hundreds of thousands of dollars in estate taxes.
PROPOSAL: For years, a bipartisan group of lawmakers have pushed a proposal that would increase the estate tax threshold. Right now, a deceased farmer’s family is required to pay taxes on the whole estate if it’s valued above $4 million. A new proposal would exempt the first $6 million of any estate from being taxed.
The effort hasn’t gone far, however, amid concerns about the potential impact lost tax revenue could have on the state’s budget, which is increasingly constrained due to cutbacks from the federal government and exposed to shifts in the economy.
NEW LIFE? Gov. JB Pritzker, speaking with reporters after an event with FFA and F-H students Tuesday morning, said that he would be open to signing changes to the estate tax if they hit his desk.
“It’s not been a priority of mine. I think there are people who look at me and think (an) estate tax cut is not something that Pritzker should be the advocate for,” Pritzker said, acknowledging his billionaire status. “But I understand, very much so, how impactful it is in a negative way on farmers and on small businesspeople.”
“And so if we can put together a package that makes sense… then I do think it’s something that I could support as long as it includes the kind of tax break that I think is appropriate to preserving small farms and small businesses,” he said.
CAN’T PREDICT DEATH: The tax is one of the state’s most unpredictable revenue sources, COGFA Chief Economist Ben Varner said in a hearing on Tuesday: “If a millionaire dies, that can make a huge difference.”.
Estate tax data, especially on farm-related assets, is also limited, making it challenging to estimate how much they state will bring in.
ESTATE TAX RECIEPTS UP: Still, estate tax revenues have “increased significantly in recent years,” according to a January COGFA report. Between fiscal year 2012 and fiscal year 2020, receipts averaged more than $300 million annually. And in recent years, they’ve gone north of $600 million. Some growth can be attributed to a sharp rise in asset valuations.
Receipts are up 53% so far in fiscal year 2026, or $215 million, according to the Commission on Government Forecasting and Accountability. In October alone, the state brought in $180 million in estate tax revenue, a jump of 200% from the previous year.
A BIT OF COLD WATER? State Rep. Sharon Chung, D-Bloomington, the House sponsor, told us she’s “not quite sure the future of it,” considering the state’s tight revenue picture. She also said talk of a larger estate tax reform in the Senate could complicate things.
“I still remain hopeful,” Chung said. “I know they’ve sort of talked about that on the Senate side, so I don’t know if they want to tackle the whole thing.”
WHAT WE’RE WATCHING: If estate tax reform happens this year, it could be roped into a larger revenue omnibus bill that would be considered towards the end of May. It’s a way for lawmakers to take a vote on taxes in one fell swoop.
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