* Press release…

Residents struggling to stay healthy and pay their bills amidst the pandemic and worst recession in our lifetimes joined Illinois legislators for a press conference. Together, they urged Gov. Pritzker and the legislature to close corporate tax loopholes to preserve education, healthcare and other essential community services. Watch (and rebroadcast) the press conference on Facebook: https://fb.watch/2reqkK1lRS/

Jose Serna, a college student and grocery store worker from Bloomington, talked about lost wages and mounting medical bills. Serna’s mother works as a travelling nurse and does not get paid when she is unable to work due to COVID exposure. They are two months behind on rent and just learned his mother’s car will be repossessed.

“I had to come home early from college because of an undiagnosed illness. I have insurance, but already the bills are piling up from my multiple ER visits and four-day hospital stay,” said Serna. “I have a job at the local grocery store, but I haven’t been able to work because of my mom’s exposure to covid and my illness. We are past our breaking point in terms being financially afloat.”

Tina Hammond is a child care provider from West Englewood and a member of SEIU Healthcare Illinois. “The child care industry was in crisis before the pandemic. Parents couldn’t find affordable child care, and providers - mostly Black and Brown women - were not being paid our worth, with many of us making way below the minimum wage”, said Hammond. “It took a pandemic for many to recognize how important our work is to our communities – and our economy – but even still, the recognition as ESSENTIAL did not mean much. During this time, many providers had to shut their doors, some permanently. Some had to let go of staff or spend more on PPE and cleaning supplies to keep our doors open.”

“We can’t ask working and middle class people to accept cuts to essential community services and government responsibilities in the midst of a pandemic and the biggest recession of our lifetimes,” said State Rep. Delia Ramirez (IL-4), Secretary, House Progressive Caucus. “Millions of our residents are at the breaking point, so I will not talk about cuts or regressive taxes when we still have an opportunity to pass progressive revenue.”

“My children attend one of the most underfunded school districts in the state, and we cannot make any more cuts to education without causing great harm,” said State Senator Andy Manar (IL-48) from Bunker Hill Illinois.

“We have to address our state’s finances in a way that’s fair to everyone,” said Rep. Dan Didech (IL-59) from Buffalo Grove. “That means reforming our state tax code so we aren’t giving preferential treatment to wealthy corporations. They don’t need our assistance to be successful, and that have become even wealthier during this pandemic.”

“The state has already instituted cuts in 2011, 2017, and at other times over the past decade,” said Sen. Ram Villivalam (IL-8) from Chicago’s northwest side and suburbs. “The meat has been cut. We are talking about cutting the bone now and that is unacceptable.”

“People in Illinois are in extreme pain,” said State Sen. Robert Peters (IL-13),Chair, Senate Black Caucus, whose district stretches from Chicago’s loop to the Indiana border. “While so many people struggle, 651 billionaires saw their combined wealth jump over a trillion dollars during this pandemic. They are so rich that they could give every American $3,000 and still have more money than they had at the start of the pandemic. It’s time for those that have made money hand over fist to pay their fair share.”

The following legislators joined to urge their colleagues to support the closure of corporate loopholes:

State Rep. Will Guzzardi (IL-39), Co-Chair, House Progressive Caucus
State Rep. Delia Ramirez (IL-4), Secretary, House Progressive Caucus
State Sen. Andy Manar (IL-48)
State Rep. Dan Didech (IL-59)
State Sen. Robert Peters (IL-13), Chair, Senate Black Caucus
State Sen. Ram Villivalam (IL-8)
Rep. Lakesia Collins (IL-9)
Rep. Elect. Dagmara Avelar (IL-85)

The press release did not include a list of their specific proposals.

*** UPDATE 1 *** The Center for Tax and Budget Accountability calls cuts inevitable without federal assistance…

On Tuesday, Governor Pritzker announced $711 million in General Fund spending cuts to address a portion of what is now estimated to be a $3.9 billion budget deficit for FY 2021, which is the state’s current fiscal year. And while some $300 million of those cuts constitute reductions in spending on general government services, a significant portion of the cuts-over $200 million or 28 percent-will result in reduced expenditures on human services, while another $71 million impact public safety.

If a substantial relief package for state and local governments isn’t passed by the federal government during the first few months of the Biden Administration, you can expect more General Fund spending cuts to be implemented before the current fiscal year ends this coming June 30th. Make no mistake, these spending cuts harm people and communities across Illinois, given that over $9 out of every $10 dollars of General Fund spending on services goes to the four core areas of education, healthcare, human services, and public safety.

The Pritzker Administration was put in the unenviable position of being forced to cut spending on human services during a pandemic, because the state’s fiscal condition continues to deteriorate. This deterioration has had three primary drivers. First is the short-term revenue loss which Illinois, like all 50 states, is experiencing because of the decline in economic activity caused by the pandemic. As things stand today, Illinois’ revenue loss from the pandemic could exceed $6 billion over the course of Fiscal Years 2021 and 2022. Second is the estimated $1.2 billion revenue shortfall for the current fiscal year caused by the failure of voters to ratify the Fair Tax initiative during the November election. But third, and ultimately of more long-term importance, is the structural deficit caused by the state’s flawed tax policy, which fails to generate adequate revenue growth from year-to-year, because it simply is not designed to work in the modern economy.

Illinois’ tax policy is so flawed that, even if there never was a pandemic, total General Fund revenue this fiscal year would have been less than it was two decades ago in FY 2000, after adjusting for inflation-and Illinois would have had a General Fund deficit of almost $8.4 billion by the end of FY 2021. For context, this means the state would not have had enough revenue to cover roughly 30 percent of all current spending initially appropriated to cover education, healthcare, human services and public safety this year - if COVID-19 never happened. After factoring in the impact of COVID-19, as well as the failure of the Fair Tax, that year-end deficit is now projected to reach $13.6 billion, or almost 50 percent of all current General Fund appropriations for services.

In case you are wondering, overspending on public services is definitively not driving Illinois’ fiscal problems. In fact, after accounting for the $711 million in cuts just announced by the Pritzker Administration, General Fund spending on services this year in real, inflation adjusted terms, will be at least 22% - or $7.97 billion - less than it was in the year 2000 under Republican Governor Ryan.

Given how all the data show Illinois’ core fiscal problems have been driven by flawed tax policy, Governor Pritzker was justified in castigating those elected officials and wealthy individuals who opposed the Fair Tax, which would have helped modernize Illinois tax system and addressed some of its key flaws. Perhaps most galling, the anti-Fair Taxers not only opposed a rational approach to reforming state policy in a manner that would generate revenue needed to fund core services while correlating tax burden with ability to pay, but have as of yet failed to make any viable proposal for how to fund the core services covered by the General Fund, or failing that, which specific education, healthcare human service or public safety expenditures should be cut.

*** UPDATE 2 *** Illinois Chamber…

“In the wake of last week’s devastating unemployment claims it is unfathomable that we still have legislators who don’t understand that we are in an economic crisis,” said Illinois Chamber of Commerce President and CEO Todd Maisch.

“These legislators have conveniently not detailed which job providers they intend to raise taxes on. They need to have courage in their convictions and tell us what businesses they want to tax. For example, do they want to get rid of the research and development tax credits that help support life-saving medicines and vaccines? Or, will they eliminate many of the agriculture credits that help keep family farms afloat? Are they targeting incentives that help Illinois compete for good paying manufacturing jobs?

“According Opportunity Insights data, as of November 30, the number of small businesses open in Illinois has decreased by a third since January. Are we going to wait until they all close forever to recognize that state government needs to help job providers instead of punishing them with higher taxes? ”