But at the Illinois League of
Women Voters Feb. 6 issues conference in Chicago, budget expert John Bouman,
president of the Chicago-based Sargent Shriver National Center on Poverty Law,
and spokesperson for the Responsible Budget Coalition, made the boring
fascinating.
Still, in a talk entitled “
The $27 billion General Funds
budget funds health care, human services, education including higher ed., and
public safety. Its deficit now stands at almost half its annual income, $13.8
billion.
In 2007, the 3 percent
personal income tax supplied one-third of the annual revenue, sales tax one
fourth, gambling less than 5 percent, corporate taxes at 6 percent.
The revenue system is poorly
designed, inadequate and unfair, he said. Revenue does not grow with inflation,
and the taxes are the most regressive in the nation, with the poor paying much
more as a percentage of household income.
Since services are growing,
but
To cope with the deficit,
state officials have been stiffing creditors (the state now owes $4 billion to
vendors), have cut education funding to the lowest of any state, shortchanged
the public pension system, understaffed programs so they’re at 1972 levels, the
lowest per household in the US., and have been borrowing.
Gimmicks such as the selling
the lottery and tollway and adding more gambling and gambling boats cannot
generate enough revenue to make up the shortfall, he said.
When the recession hit
The state has received $3
billion from federal stimulus funds to help with Medicaid bills but the feds
are smart – and would not give money to make up for state cuts in other areas,
such as a $1 billion cut in education. Layoffs and service cutbacks are taking
place, he said. “Every day we don’t deal with it, it gets worse. Schools are
laying off teachers.”
The Illinois Senate has
passed HB174, which is a good reform of the system, he said. Now that the primary election is over and many
legislators have ‘safe seats’ because they have no opposition from the other
party in the gerrymandered state districts, the Illinois House may also pass
this bill, he said. “Now we know who can vote without losing in November,” he
said.
HB174 includes a personal income tax increase
to 5 percent, but would triple the personal exemption and earned income tax
credit to aid the poor. It doubles the property tax exemption and makes
property taxes refundable if you don’t pay income tax. It also taxes luxury
services. It would increase state revenues by $6 billion. All the revenue would
go to pay bills, and any left over would go to education.
“After 30 years of anti-tax,
anti-government rhetoric and scandals,” passing this bill will be difficult
work, he said.
“This is a crisis now.
Important organizations are going to go under now (and won’t be rebuilt). We
can’t wait,” he said.
Legislative leaders “know
it’s the right thing to do” to pass HB 174, but may be afraid to act, he said.
During the question session,
Bouman was asked about the oft-attacked
He acknowledged that it is
not fully funded because politicians see no point in tying up billions in
investments so long as the state can meet its pension obligations. Is that a
bad strategy? It can lower the state’s bond rating, he said.
NOTE: (That from the same
bond houses that didn’t notice the bonds based on sub-prime lending that
crashed? They have a lot of credibility now. Not.)
Should the pension system be
scaled back? “You can’t break promises
to existing employees,” he said, and ducked the other half of this question on cutting out defined benefit pensions for
future state employees.
He urged the League audience
to attend a Feb. 17 rally on budget issues in
-- Elaine Hopkins
