Representatives of non-profit organizations, citizen advocacy groups and School Districts 65 and 202 met with Robyn Gabel on April 16 to emphasize the devastating impact that potential state budget cuts are having and will have on the community. Ms. Gabel was sworn in as the new state representative of the Eighteenth District a few days later on April 18.
Karen Singer, executive director of the Evanston/North ShoreYWCA, facilitated the meeting. She said the Responsible Budget Coalition, a coalition of more than 200 organizations, was holding similar meetings throughout the state to urge support for House Bill 174, which proposes an increase in state income taxes and a sales tax on certain services. While there was general support at the meeting for increasing state funding, there was not universal support for H.B. 174.
Many persons also said any increase in taxes should be accompanied by comprehensive reforms.
Governor Patrick Quinn released a proposed budget for the State’s fiscal year 2011 on March 10. Under the proposed budget, $276 million would be cut in funding for human services and about $1.2 billion would be cut in funding for K-2 education from last year’s levels. The cuts to funding for human services are on top of substantial cuts last year. Even with these cuts, the State is facing a shortfall of about $13 billion for FY 2011.
H.B. 174 would increase income taxes for individuals from 3% to 5% and for corporations from 4.8% to 5%. It would also expand the sales tax base to cover 39 different services. In order to reduce the burden on low- and middle-income taxpayers, the bill triples the state’s earned income tax credit; it doubles the residential property tax credit from 5% to 10% (with a cap of $1,500); and it increases the personal exemption from $2,000 to $4,000 per person.
If the bill is passed, one-third of all new revenues would go to a Common School Fund, and one-sixth of the new revenues would go to higher education. The rest of the new money would go to the State General Revenue Fund. Some estimates peg the new revenues anticipated under H.B. 174 at around $5 billion.
The bill was passed in the Senate last year and is pending in the House.
Ms. Singer said one-half of the YWCA’s domestic violence budget is supported by state funds; 13% was cut last year, and an additional 10% may be cut this year. “These are life saving services,” she said. She asked Rep. Gabel to support H.B. 174.
Representatives of the Youth Job Center, the North Shore Library System, the Infant Welfare Society, and Housing Opportunities for Women said their organizations were facing substantial cutbacks that would impact the services they provide. In addition, many said the State is behind in making payments it has agreed to make, putting added stress on funding operations. The state’s fiscal crisis has also created substantial uncertainty and made it difficult for non-profit organizations to plan and budget for the future.
Martha Arntson, executive director of the Childcare Network of Evanston, told the RoundTable in a separate interview that the State has for the most part kept up with reimbursements of child care subsidies, but added it has not paid for pre-K or prevention services since November 2009. “Our centers are teaching kids without being paid,” she said.
Karen Hunt, president of the League of Women’s Voters of Evanston, said the state’s budget problems have a significant affect on almost every non-profit in the community. She said the League of Women Voters of Illinois has been advocating for H.B. 174.
Dr. Mary Brown, chief financial officer of School District 65, said she attended a meeting to lobby for general state aid and categorical state aid. School District 65 has projected it will lose $2.7 million in state funding under Governor Quinn’s proposed budget, and possibly as much as $5.5 million. She said the District was projecting less state funding for reading improvements and early childhood education. “These funds are critical to getting children off to a good start,” she said. While H.B. 174 would provide one-third of new revenues to K-12 education, Dr. Brown said she did not see anything in the bill that would provide support to general state aid or categorical state aid, the state funding District 65 receives.
Jean Luft, president of the District Educators Council (the teachers union for District 65) said an estimated 20,000 teachers statewide may lose their jobs under Gov. Quinn’s proposed budget. “We’re going backwards if the State makes these cuts. … We really need to bring State funding back to education.” She said District 65 teachers were planning to join a rally in Springfield on April 21, urging support for additional funding for education.
School District 202 is also facing state cuts in funding. Mark Metz, a member of the District 202 School Board, said Evanston Township High School is operating at a deficit this year because the state has failed to pay money it promised. At a Finance Committee meeting on March 9, District 202 administrators projected it will have to cut between $1.6 million and $3.1 million due to cuts in State funding.
Mr. Metz said under Plan A, the District is cutting some positions and increasing class sizes. If Plan B is needed, “We’re going to be cutting to the bare bone,” he said.
Referring to the larger picture in Springfield, Mr. Metz said, “What’s going on is egregious. … It’s like we’re throwing the State’s children under the bus.”
Deborah Graham, also a member of the District 202 School Board, said, “The long term impact is enormous. It puts the state at a disadvantage in terms of long-term development.”
Ms. Gabel said, “I support House Bill 174. I understand it’s a compromise.” She said she would support some amendments to the bill, including increasing the personal exemption from $4,000 (as proposed in the bill) to $6,000 and expanding the tax on services to all types of services provided in the State, which she said might allow for a decrease in the sales tax on goods.
“If it comes up for a vote, I will vote for it,” she said. She added that it should not be a partisan issue. “Schools affect everybody. Social services affect everybody.”
Mr. Metz added, “We can’t tax our way out of this alone. One of the things we have to do is look at reforms to take pressure off the state so that it can provide essential services.” One thing he said the State needed to address was pension reform.
He likened the state’s need to fund pensions to water being sucked out of a river so there is no water downstream. “If you suck off all the water out of the river, the revenue isn’t going to be there to fund essential services,” he said. The state needs “meaningful reform,” he said. Referring to state legislators, he said, “There’s no understanding, no political will, a willingness to pass this off to the future.”
Ms. Singer likewise said, “We can’t tax our way out of this. We need a comprehensive solution.”