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Civic, school and business leaders attending the Evanston Chamber of Commerce’s annual legislative breakfast heard their representatives lament the state’s economic woes.
Almost equally, it seemed, the legislators deplored Governor Bruce Rauner’s proposed budget and “turnaround agenda,” called by many of its opponents an anti-union agenda. On May 5, the Rules Committee of the City Council unanimously rejected the governor’s proposal.
“Governor Rauner tells me one solution for municipalities is to go bankrupt,” said Mayor Elizabeth Tisdahl, adding those are “scary words. We are looking for help from the legislators for the /City and for the schools.”
Under the proposed budget, Connections would lose $300,000 and other not-for-profits will lose money as well; the City stands to lose about $3.7 million – and with what the schools will lose, the loss to entire community will be $19 million, the mayor said. “We cannot afford that kind of hit,” she added.
Michael Corr, president of the Evanston Chamber, posed vetted questions to the panel of legislators: Congresswoman Jan Schakowsky, State Senator Daniel Biss, State Representatives Robyn Gabel and Laura Fine, and Cook County Commissioner Larry Suffredin. The questions dealt with budget cuts and tax increases.
The Governor’s Proposed Budget
“We’ve heard the governor go through the state with his right-to-work agenda. For me, first and foremost is the budget,” said Rep. Fine. “We have to bring the governor back to Springfield. We need to focus on the budget and find a way to protect the most vulnerable in our society.”
Sen. Biss described what he sees as Gov. Rauner’s twofold approach in his proposed budget: making cuts that affect the most vulnerable population and shifting costs to other units of government. As an example, the governor proposed to decrease the local government distributive funds (LGDF) – funds remitted proportionally to municipalities from income-tax revenues – saving money for the State but increasing costs to Evanston. Evanston’s share of LGDF revenues would decrease by half – from $7.5 million to $3.76 million.
“Cuts to the Rapid Transit Authority will result in fare hikes,” Sen. Biss said.
Rep. Fine said that while the governor said he would not cut funding to education, he is proposing a 31% cut for higher education.
These cuts to public universities, said Sen. Biss, would result in layoffs, higher tuition costs –because costs would be greater and because fewer students would be able to complete their education in four years – and a destabilization of the economies of college and university towns.
The proposed budget also makes drastic cuts to human services, said Rep. Gabel. “It changes the determination of need for the disabled and the elderly; 10,000 people of the 30,000 people now receiving services would lose those services,” she said.
The threshold for providing early intervention services to children has been raised, so that only children with special needs exhibiting a 50% delay in development – rather than the current 30% delay – would receive early-intervention services. This will increase costs to schools down the line, she said.
“It doesn’t make sense for the people of Illinois,” Sen. Biss said. He also said the governor’s proposed budget received no votes in the General Assembly, with all Democrats voting “no” and all Republicans voting “present.” Some have suggested the Republic vote was a protest against the budget’s having been presented for a vote at that time.
We have to find a budget that will pass, and, more importantly, meet the needs of the state,” said Sen. Biss.
Rep. Gabel said, “The governor has not been willing to talk about the budget. What he says is ‘Pass my budget and then maybe you’ll get something you want.’ We are searching for a table [to sit down and negotiate].”
The budget and the turnaround agenda have “significant impacts,” said Mr. Suffredin. “The governor’s responsibility is to work with the General Assembly. A short-term solution is to get a budget that works.”
“Illinois is the 18th richest state [in terms of median household income] in the country,” said Rep. Schakowsky. “There is revenue. The question is, ‘How is it distributed?’ The lens we should be looking at everything through is ‘Does this contribute to income inequality?’”
“The battle in Springfield is scary … but the situation is not impossible,” said Sen. Biss. “Sometimes we get caught up in the rhetoric of despair.” He said he believes the State has the “money and the human and capital resources to tackle these problems.”
Cuts to Local School Districts
The governor campaigned on not cutting aid to education, said Sen. Biss, but services that make it possible to educate children are being cut, and “there is a lot of talk about other proposals that would be very harmful to schools. We have to be very vigilant.”
One of those proposals is to shift some of the pension costs to local school districts. The other is Senate Bill 1, a reincarnation of last year’s Senate Bill 16. While Senate Bill 1 has been termed by some as an equitable way of distributing education funds, it proposed no increase in the amount of funding for education but divided the pot differently. Should the bill be enacted in that form, Evanston’s two school districts would lose about $9 million in the first year.
Senate Bill 1 “has received less scrutiny, less light but it’s alive and could be [passed]. We have to be watching things carefully,” said Sen. Biss.
Rep. Fine sits on the committee reviewing SB1. “We are meeting weekly. The topic of conversation is that we are all in such flux right now and we are very cautious and very cautious about making changes. One idea is that we have identified schools that need more money. The question is, ‘Can we keep our schools where they are and give schools in need more money?’ As we move forward, we’re going to do something, but we don’t know what it will be.”
Compounding the additional tax burdens in store from proposals pending in Springfield that would cut State aid to School Districts 65 and 202 by about $9 million and would shift millions of dollars of the annual teacher-pension costs to local school districts is a proposal to freeze property taxes – making a tripple whammy for school districts.
“Is there a proposal for a tax increase.” Mr. Corr asked the panel.
“There is no way to get the budget under control without a tax increase,” said Rep. Gabel. A 1% tax increase would increase revenues by $3 billion, she said.
“Most people are against random tax increases,” said Mr. Suffredin. “We’re for fair taxation.”
Sen. Biss said that in the long term, “It’s very, very important to get a fairer tax structure. These changes require a referendum.
“We have to look at this not just as a bottom line, but as ‘How does this affect us down the line?’ If we increase taxes, how much will it save down the line, and if we don’t, how much will it cost us?’”
By Larry Gavin
The Illinois Association of School Boards reports that the Illinois General Assembly is primed to vote on legislation that would freeze property taxes for all taxing bodies. While Governor Rauner initially proposed a property tax freeze, various democrats have proposed that four pending bills be amended to include provisions that would permanently freeze property taxes, unless voters approved an increase in a referendum.
The amendments to HB 677 and 695 would apply to all taxing districts, including home rule units of local government. On May 15, the House approved the amendment to HB 695, by a vote of 37 yeas, 23, nays, and 38 present. While adequate to amend the bill, the vote is far short of that needed to pass the bill. The vote may have been taken as a test vote to show either support or lack of support for the governor’s proposal.
The amendments to HB 696 and HB 699 would apply to all non-home rule units of government.
School Districts 65 and 202 each obtain approximately 80% of their operating revenues from property taxes. If property taxes are frozen, it would have a substantial negative impact on their operations.