PI Original Ellyn Fortino Tuesday July 9th, 2013, 4:14pm

Chicago Activists Speak Out Against Public Service Cuts, Offer Alternatives

The concept of a social safety net in Illinois is under attack, according to Chicago activists who spoke out at a forum Monday evening regarding threats to public services. Members of the the Alliance For Community Services and other groups offered up various ways to avoid future social services cuts. Progress Illinois was there to learn more.

The concept of a social safety net in Illinois is under attack, according to activists who spoke out at a forum Monday evening regarding threats to public services.

Public schools, health care and other human services in the state are being squeezed by an "austerity agenda," meaning tax breaks for the rich and wealthy corporations and cuts for everyone else, said Fran Tobin, member of Northside Action for Justice and the Alliance For Community Services.

The "austerity movement" is based on the notion that both the city and state are broke, Tobin said at the forum, held at Teamster City at Ashland Avenue and Jackson Boulevard in Chicago.

"Every time we want to do anything good for people, they say there’s no money," he said. "They said that about closing human service offices. They said that about closing mental health offices. They say that about just about everything else, and yet there always seems to be money for tax cuts for wealthy corporations."

Those at the meeting highlighted various ways public services across the state have been threatened, and also suggested alternatives to future cuts.

N’Dana Carter with the Mental Health Movement coalition and Southside Together Organizing for Power blasted Mayor Rahm Emanuel and the city council for approving the shut down of six of the 12 city-run mental health clinics that closed for good in April 2012. Four clinics on the South Side closed, while two closed on the North Side.

As Progress Illinois has reported, city officials said the closings would allow for services to be strengthened, promising that the overall mental health system in Chicago would be enhanced.

But Carter took that argument to task, alleging that the mentally ill are still struggling since the clinics closed. For example, some people who attended the shuttered Auburn-Gresham clinic have been found wandering nearby streets and a McDonald's parking lot, she explained.

It is crucial that the clinics reopen, Carter said, because mental health often goes hand-in-hand with violence.

"It's not because the mentally ill are violent, it's because there are times when violence is put upon the mentally ill," she explained.

In addition, Leon Stockstill, an Illinois Department of Human Services (DHS) employee, said human service offices across the state have closed in recent years, which means more work for caseworkers. Some caseworkers have seen their caseloads jump from about 800 to nearly 3,000, he said.

"You have absolutely no idea who anybody is on your caseload anymore," he said. "You just don't have the time and energy."

He said some caseworkers are abandoning their offices where the workloads have become "ridiculous", and as a result, new caseworkers with limited training have been brought in to process the work.

“We have to do something to stop this insanity,” he said.

The Alliance for Community Services suggested reforming Chicago's tax increment financing (TIF) program to help curb some of the public service cuts felt at the local level.

The TIF program, created in 1986, was originally intended to create economic development in blighted areas, but the program's impact on communities most in need of an economic boost is questionable. Instead, TIF subsidies have notoriously been awarded to wealthy corporations such as Coca-Cola and Walmart, among others.

More recently, Emanuel has proposed using $55 million in TIF funds for a DePaul University basketball arena and a hotel near McCormick Place. The recent proposal was announced just days before the Chicago Board of Education voted in May to close down 50 neighborhood schools in order to address the Chicago Public Schools' reported budget deficit and underutilization problem.

The community services group also called for a $1 transaction tax on each Chicago Mercantile Exchange (CME) contract, which is estimated to raise $6 billion in revenue for the state. Both the CME Group and the Chicago Board Options Exchange were awarded millions of dollars in tax breaks in 2011 from Illinois.

"There is money. Let's not believe that the city is broke," Carter said. "The city is only broke for social services."

Ralph Martire, director of the bipartisan Center for Tax and Budget Accountability, also attended the meeting in an effort to arm activists with data-based research on why Illinois should raise taxes, primarily for the rich, and use that money to fund core services, such as social services, education and health care.

Illinois' more than $35 billion budget for fiscal year 2014, which began July 1, includes nearly $25 billion to be spent on public services. But the budget also includes an unspent appropriations line of $500 million. That means the state will not spend at least $500 million of what they budgeted, Martire said.

"They're just not telling us right now what they're going to cut," Martire said. “They're going to make us all think they're going to fund (public services) at those higher levels. They are going to cut it."

The Governor's Office of Management and Budget projected revenues for this year's budget at $35.6 billion, while the Illinois House of Representatives estimated $35.08 billion in revenue. After factoring in $11 billion in hard costs the state has to pay by law, including pension payments, and $50 million set aside for unpaid bills, that means either $15 billion or $16 billion will actually be left over for public services.

But the budget called for almost $25 billion to be spent on social services, which leaves a deficit of more than $8 billion. That means 34 percent to 36 percent of the state's current planned expenditures on core public services is deficit spending, he explained.

“We don't have that money,” Martire said. "That's a big hairy problem."

Much of the political rhetoric centered around solving Illinois' fiscal problems involves re-prioritizing how the state spends its money. But 9 out of 10 dollars the state spends as part of its general fund goes toward education, health care, social services and public safety, he explained.

"That's why you see your programs cut. It's where the money is," he said. "It's also why politicians say we should solve our problem with across-the-board cuts, because across-the-board is nice and clean. It doesn't implicate anyone's concerns or things they care about."

Public services are also very labor intensive, Martire said. And about 85 percent to 90 percent of what the state spends for core services goes toward the salaries and benefits of workers providing the various services. According to the Center for Tax and Budget Accountability's calculation using the Employment Cost Index, Illinois is purchasing about 28 percent less in core services today compared to 2000.

“That's a cut of almost 30 percent over the last 15 years," he said. "In real terms, that’s huge. We ought not be cutting services anymore.”

A temporary personal income tax increase, from 3 percent to 5 percent, and a corporate income tax hike, from 4.8 percent to 7 percent, was implemented in 2011. Martire said some people have argued that the temporary tax increase has not helped the state, because Illinois is still spending too much. As such, some say the tax hike should end.

But the state’s accumulated year-to-year general fund deficit has been stabilized at about $8 billion to $9 billion since the tax increase took effect, he explained. Before the temporary tax increase, the deficit was growing each year, Martire added.

If the temporary tax was not in place for this budget year, the deficit would reach $34 billion, meaning the state would be bankrupt, he said. Most of the temporary tax is set to expire in 2015. And Matire said ending the temporary tax would mean draconian cuts for social services.

"You can think year-to-year cuts of 30 to 40 percent across the board," he said.

In addition, Martire said tax increases do not kill jobs.

When the government cuts spending for core services, it is essentially cuts wages. When wages are cut, people have less to spend in the private sector economy, which hurts job growth, he said. When taxes are raised the "right way", specifically on the rich, the state is able to maintain spending, which maintains jobs. And increased spending would actually lead to more job growth, he pointed out.

"It's very logical, but it's not at all how this is discussed or covered, and we have to change this discussion," Martire stressed. "We have to educate the public so that they understand raising taxes does not equate to killing your economy. In fact, none of the data supports that [notion] and never has."

Read the Center for Tax and Budget Accountability's analysis of the state's current general fund budget here (PDF). 

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