Quick Hit Ellyn Fortino Thursday November 13th, 2014, 2:19pm

'Chuy' Garcia Talks Race, Inequality In Chicago; Supports Graduated State Income Tax

Chicago mayoral candidate and Cook County Commissioner Jesus "Chuy" Garcia stressed his support for a graduated state income tax at a Thursday morning University of Illinois at Chicago (UIC) panel discussion on race and inequality.

Garcia said property taxes, which are a major source of revenue for public education in the city and state, are "very regressive in terms of how they affect the general population" and are "not the best source to fund schools."

"A fairer system of taxation would be a graduated state income tax, or something that is more progressive tied to an income tax," Garcia said in a follow-up with reporters after the talk, which was sponsored by UIC's Great Cities Institute. "I think that is a much more sustainable funding source for schools, for human services and things of that nature. I think it's one that we really need to look at. States that have that type of progressive taxation tend to have better-funded school systems and less disparities in education."

A graduated tax system applies higher rates to larger incomes and lower rates to smaller incomes. Of the nation's 41 states that tax income, 34 have implemented a graduated tax rate. As it stands, the state's constitution restricts Illinois to a flat income tax rate, meaning all Illinois residents are taxed the same percentage despite how much they make. The flat rate is currently 5 percent.

A constitutional amendment is needed for the state to switch from a flat income tax rate to a progressive system. To do this, both chambers of the general assembly have to pass legislation by a three-fifths majority to put a referendum on the ballot. A graduated income tax amendment measure failed to gain enough support in the state legislature last session.

"I would work with other localities throughout the state of Illinois who suffer from the same fate," Garcia said, when asked how he would gin up support for a graduated income tax, if elected as Chicago mayor next year. "School districts that don't have wealthy tax bases to fund their school systems with, they struggle. It's not just the city of Chicago. It's cities and municipalities and school districts and many other parts of the state that suffer the same fate."

Other panelists at the discussion touched on the need for a financial transaction tax, a minimum wage increase to at least $15 an hour and the resurgence of labor unions -- specifically "social movement" unions -- to help tackle inequality more broadly in Chicago.

"We hear about how we're broke -- all this austerity politics -- but we're not broke," stressed panelist Pauline Lipman, professor of educational policy studies and director of UIC's Collaborative for Equity and Justice in Education. "It's just that all the money is in a few hands. Chicago has the most financial transactions of any center in the world ... Just a tiny tax on each financial transaction would generate ... billions of dollars."

Garcia said he is looking into the idea of a financial transaction tax.

"We want to understand whether it would be constitutional for the city to engage in that [and] whether something like that would be reserved for the federal government," he told reporters. "We have not come out supporting something like that at this point."

Stronger labor unions, meanwhile, could help shrink the gap between the rich and poor, added panelist Don Rose, a longtime Chicago-based independent political consultant who is advising Garcia's mayoral campaign.

"Deunionization is probably the reason why we have what we're calling now a wageless recovery," he said. "We have to raise those unions up ... Unions are the only method, short of a simple redistribution, that are going to raise wages."

But Victor Dickson, president and CEO of the Safer Foundation, a Chicago-based organization focused on reducing recidivism rates, interjected that if there is a revival of unions, it is crucial that they do "not become barriers to African Americans and Latinos getting good jobs, because in the past that's been the issue." 

"We just don't want to go back to the past," he stressed.

Lipman said there is a need for a more "social movement" unions that are "alive with communities and fight against racial inequality."

Reporters later asked Garcia what he considers to be the most impactful ways to address racial disparities in Chicago.

"I think re-establishing a sense of trust with the neighborhoods throughout Chicagoland, especially those that have been hurting the most from school closures and the violence and disinvestment would be one of the more important things," the commissioner said. "You can't have a thriving part of the city and a part of the city that is desolate, that is hurting, that is hopeless. Not everyone can be healthy, not everyone can be secure, in a city that has that type of a dichotomy."

Chicago is currently at a "critical moment" for change, Lipman added.

"I think that people really are tired of mayor 1 percent. They're really tired of an appointed school board. They're really tired of these policies," she said. "I think what we're all looking for is bold, new directions that really set a different course for Chicago. ... We need to challenge the question of: Is this going to be a city for a few of the super rich, or are we going to redirect our policies to the majority of people into the neighborhoods?"

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