Progress Illinois: As Illinois Government Shutdown Looms, Calls For Progressive Revenues Intensify

By Ellyn Fortino

June 29, 2015

As Illinois moves closer to a government shutdown, a coalition comprised of community and labor groups, clergy, service providers, elected officials and others called for progressive revenue options to tackle the state's pressing fiscal issues at a "people's budget" meeting on Monday.

As the budget impasse in Springfield continues and Illinois moves closer to a government shutdown, a diverse coalition of "fair share" revenue advocates unveiled a "people's budget" plan on Monday that they say would bring in billions in new funds for the state. 

Spearheaded by the Grassroots Collaborative and its partners, the coalition held an emergency meeting in Chicago at Mt. Pisgah Baptist Church, 4622 S. King Dr., to discuss a list of progressive and sustainable Illinois revenue solutions it says are needed to avert deep cuts to crucial social services.

"While Gov. Rauner and political insiders continue to blame each other for the budget crisis today, we're bringing together social service providers, clergy, labor unions, community organizations and elected officials to talk about solutions that address the real crisis facing Illinois -- the revenue crisis," Grassroots Collaborative's Executive Director Amisha Patel said at a press conference ahead of the "people's budget" meeting. "On July 1, just a few short days away, hundreds of critical state services are slated to be shut down. Now is the time for action not just to Band-Aid the budget gap, but to move our state and our people forward."

The coalition -- which has the backing of labor leaders such as Chicago Teachers Union President Karen Lewis and elected officials like Cook County Commissioner Jesus 'Chuy' Garcia -- supports a graduated income tax, a financial transaction tax and a sales tax expansion to cover various business and professional services.

Among other revenue options, the coalition is also advocating for the closure of corporate tax loopholes, a freeze on new corporate tax breaks and a variety of banking and financial industry reforms designed in part to "end bad public finance deals with big banks."

The meeting comes ahead of Tuesday's deadline for state lawmakers and Republican Gov. Bruce Rauner to reach an agreement on a new budget before the 2016 fiscal year begins on July 1. 

Rauner and Democratic leaders remain at odds over how to close a $6 billion deficit, due mostly to the January rollback of the 2011 temporary income tax hike. 

The governor's proposed spending plan includes no new revenue and would slash funding from a host of budgetary items. He wants lawmakers to adopt various items on his controversial Turnaround Agenda, including workers' compensation reforms and a property tax freeze. 

Democrats, who have described Rauner's proposals as extreme, passed a spending plan containing fewer cuts. They have been hoping that they could negotiate with Rauner on new revenues. 

Last week, however, the governor vetoed all but one component of the legislative spending plan, signing only a budget bill for K-12 and early education funding. In vetoing the larger Democrat-approved budget, Rauner cited the $4 billion shortfall and called on lawmakers to pass a scaled back list of his "structural reforms."  

At Monday's press conference, Sargent Shriver National Center on Poverty Law President John Bouman argued that it's the state's revenue system that should be reformed. 

"We have a system that doesn't produce adequate revenue, and it never has. It is not fair," he said. "We are one of the least fair taxing states in the whole country, putting an unrealistic and unfair burden on the people least able to pay, and simultaneously avoiding focusing the revenue system on the people who are able to pay."

Also speaking to reporters was state Rep. Will Guzzardi (D-Chicago), who brought up the January rollback of the state's 2011 temporary income tax hike.

Guzzardi explained that the wealthiest income earners in Illinois benefited the most when the income tax rate dropped from 5 percent to 3.75 percent for individuals. The income tax rate also decreased from 7 percent to 5.25 percent for corporations.

Illinoisans received $5 billion in tax relief after the higher income tax rates expired, with the top 1 percent of earners in the state capturing over $1 billion of that amount, Guzzardi explained.

"The bottom 50 percent of earners, half of the people in this state, got half a billion dollars," the state representative said.

The average amount of tax relief was $17,000 for a family in the top 1 percent and $170 for a family in the bottom 50 percent, Guzzardi said.

"We're digging deeper into the pockets of working families while giving more money to the very top," the state representative stressed. "This has been a massive transfer of wealth from poor people and middle-class families to the 1 percent. That is what has happened, and that's why we're in the position that we're in at as a state right now. The good news is that means there's a very obvious solution ... Tax the 1 percent at a fair rate."

Asked by reporters where the coalition sees potential areas of compromise with Rauner regarding his list of demands, Guzzardi pushed back on the question. 

"This is a false dichotomy that we can't allow ourselves to buy into," Guzzardi stressed. '"The governor is saying, 'I refuse to compromise about the budget until you enact a series of widely unpopular reforms that no one in this state wants' ... [F]or him to hold working families and poor people and disabled people and seniors in this state hostage until we do things that no one wants done, that is not something that we're going to accept as Democrats or anyone in the legislature."

Rep. Greg Harris (D-Chicago) was among other elected officials in the audience. Reporters asked Harris why Democrats, who control both chambers with super majorities, have not passed legislation for new state revenues. 

"We need every single one of the 71 Democrats (in the House), and I'm not sure that all 71 Democrats are going to vote for revenue," Harris responded. "We're gonna need Republican votes also. And if you look at which districts will really benefit from continuing operation of the state, it's a lot of Republican districts that include our universities, our state institutions and so many thousands of state workers."

Harris said he's concerned that seniors, people who rely on child care assistance and families with autistic children will be among those who are "going to be the first to suffer" if a government shutdown occurs.

"I hope the governor really sits down and says, 'Ok look, I know I'm not going to get everything I want, and the legislature (is) not going to get everything it wants, but we need to figure this out together,'" Harris added.

Meanwhile, the Illinois House will be gathering for a two-day Committee of the Whole meeting starting Tuesday to discuss agency preparations in the event of a state government shutdown.

"We want the governor and his departments to come in and explain to the people of Illinois how he's gonna shut down government on Wednesday," Harris said. "If you're a senior in a nursing home, or that depends on home care services to survive, if you're the parents of an autistic child what do you do Wednesday morning when there are no more services? The governor needs to explain how he's gonna do this." 

Illinois activists also held a "Moral Monday" protest in Chicago to call for fair share revenue options to tackle the state's fiscal issues. Check back with Progress Illinois for our coverage of that event.