Save services and jobs – extend the income tax
Delivering his annual budget address at the State Capitol on March 26, Governor Quinn’s recommended spending plan contained mostly good news for AFSCME members and the public services we provide. But that recommended plan can only be passed and implemented if legislators also maintain stable state tax revenues. To that end, the governor also presented an all-cuts budget that would be implemented if legislators fail to act.
The governor’s two scenarios made clear that, with the state’s temporary income tax rates scheduled to fall back to pre-2011 levels on January 1, lawmakers face a stark choice. If they raise adequate revenue, they can maintain vital public services and begin to restore past cuts while preventing devastating new one. If not, state government—along with municipalities, universities, school districts and human services providers that depend on state funding—will tumble over a billion-dollar fiscal cliff of nightmarish cuts, closures and layoffs.
STATE EMPLOYEES
For state government, the Governor’s recommended budget—contingent on adequate revenue—would take steps to reverse years of cuts that have left state agencies critically short of staff and state employees struggling to do their jobs. Some 1,400 new frontline employees would be hired across state government, with DOC, DHS, DPH, DNR and DJJ getting badly needed help. And two major correctional facilities would be reopened—the former Illinois Youth Center at Joliet as a DOC facility for inmates with mental illnesses, and IYC-Murphysboro as a DOC facility for DWI offenders.
But a bad budget—the looming consequence of the fiscal cliff—would result in nearly 6,900 layoffs among state employees, including in DHS, DOC, DCFS, DJJ, state police, vets affairs, revenue and more.
Unfortunately, both budget plans assume that DHS will keep trying to close Murray Developmental Center. The union and families of Murray residents are fighting to keep it open.
DIRECT CARE WORKERS FOR DEVELOPMENTAL DISABILITIES
In a big victory for our union—and for The Care Campaign of which AFSCME is a leading partner—the budget plan that depends on adequate revenue includes the $1-an-hour across-the-board wage increase for direct-service personnel (DSPs) represented by AFSCME at not-for-profit agencies like Trinity Services, the Hope Institute, UCP, Milestone and elsewhere.
While not all we had pushed for—the increase wouldn’t take effect until Jan. 1 or later, midway through the year—it’s a strong step in the right direction for workers whose employers haven’t had a rate increase since 2007, and an essential part of our push to raise DSP wages to $13 an hour over the next three years.
On the flip side, an all-cuts budget would do nothing to raise pay for DSPs who are struggling to get by on a statewide average wage of just $9.35 an hour. Worse, it would force a cut of nearly $300 million to developmental disability services under DHS, an across-the-board reduction of nearly 25% that would likely get passed down to private agencies funded by state grants.
UNIVERSITIES
If no action is taken on revenue and the “cuts” budget is passed, every Illinois public university would see its state funding slashed by 14% across the board, a cut of $153 million in all.
Reductions of this magnitude would undoubtedly force the layoff of university employees, along with further increases in tuition costs for students.
The “good” budget would maintain university funding and prevent cuts, but depends on state lawmakers taking action to preserve adequate revenue.
LOCAL GOVERNMENTS
It’s a similar story for the possible scenarios facing Illinois cities, counties and school districts that employ AFSCME members.
A budget based on stable revenue at or above current levels would allow the state to maintain grants provided by DHS, DPH, DCEO and other agencies to municipalities to support programs administered at the municipal level.
But that funding—along with state support for K-12 education—would be slashed if no action is taken to replace current tax revenues. Reduced services, layoffs and pressure to raise local property taxes would likely follow in the tide of red ink.
RAISE ADEQUATE REVENUE
For AFSCME members, the choice is clear and the stakes couldn’t be higher. The services we provide, the jobs we do and the paychecks our families count on are hanging in the balance. We have to do everything possible to ensure that legislators raise adequate revenue to pass the “good” budget and avoid cuts and layoffs.
The governor proposed one way to maintain stable revenue and avert the fiscal cliff: Legislators could simply vote to preserve the 5% flat income tax rate now in law, rather than allowing it to roll back to pre-2011 levels. Both Senate President Cullerton and House Speaker Madigan indicated they also support this approach.
Another revenue measure now on the table is the so-called “millionaire’s tax,” a 3% surcharge on annual income above $1 million a year. This proposal by Speaker Madigan would require a constitutional amendment at the ballot box in November.
Still another option to raise adequate revenue is the Fair Tax supported by A Better Illinois. Like the millionaire’s tax, it requires a constitutional amendment.
AFSCME supports all three approaches, but believes the fair tax is the best public policy.