Raise my Taxes, Please

I have promised, in the past, not to make this a political blog. In this remarkable year in politics, though, I think I’m going to have some trouble keeping that promise. I will try to keep it to a minimum. Here is my first foray. Don’t even get me started on Trump.

 

Illinois is not a poor state. We rank 15th in per capita income in the United States. We exceed every surrounding state in per capita income, median household income, and median family income. Of neighboring states the only one who comes close to Illinois in any of these metrics is Wisconsin who finishes six places back at 21st. Behind Wisconsin is Iowa in 22nd place, Missouri at 33rd, Indiana way back at 38th place, and finally Kentucky near the back of the pack at 46th.

If we were a poor state I might feel differently about the man-made “financial crisis” which has established us as the laughingstock of the country. If we were Mississippi, where the per capita income is in the neighborhood of $20,000 I could explain and justify underfunded schools, decaying bridges, cuts to critical social services, unmowed state parks, and IOU’s issued to schools in lieu of money. If we were a third world country I could understand the governor and the legislature bickering like children about state university funding.

But the truth is, Illinois is not a poor state, sadly we are a cheap state with a very regressive tax scheme. Our per capita income of about $30,000 is 105% of the U.S. average. We really do have the wherewithal to pay our bills, fund our schools adequately, and maintain world class infrastructure. Like so much of our center-right country, though, we simply don’t want to pay for it. But guess what; quality costs money.

The Republican party has convinced people for 36 years that you can have your cake and eat it, too. They have encouraged the mythology that lower taxes for rich people (or job creators as they call them) leads to prosperity for all and, specifically in the case of Illinois, that taxes are too damn high. The common wisdom is that Illinois is a “high tax” state, especially when contrasted with the responsible “Republican Governor” states that surround us. The facts, as often happens, differ from the mythology.

Remember good old Scott Walker, the “tax-cutting, labor-busting, rock-ribbed conservative” from Wisconsin. His state’s income tax rate, according to a 2015 Forbes Magazine study is 66% higher than “high tax” Illinois. On a taxable income of $50,000 Wisconsin residents pay 5.68%. Illinois flat rate is 3.75%. Forbes is hardly hardly a bleeding-heart liberal publication.

In fact, the Forbes survey says that Illinois income taxes on $50,000 were lower than all of our neighboring states except Indiana with a flat rate of 3.3%. (One side note: All Indiana counties tax income as well to the tune of .245% bringing an Indiana resident’s total income tax to 3.545%, pretty close to ours.) On $50,000 Iowa, with it’s Republican Governor-for-life Terry Branstad, taxes it’s citizens at a rate of 5.70%. Missouri’s rate is 5.55% and Mitch McConnell’s home state of Kentucky (our poorest neighbor) taxes 4.03%. (Another side note: Like Indiana several of these states have local and county income taxes which add to their total. Illinois does not. Local and county income taxes in Iowa average .073%, in Missouri .161%, and in Kentucky a whopping .759%.)

“Hold on,” I hear my Republican friends seething, “Illinois has the highest property taxes in the nation.” That is “kind of” true. According to some surveys comparing property taxes to home value we rank 6th, behind New Jersey, New Hampshire, Texas, Wisconsin, and Nebraska. Other recent surveys put us at number 2 behind only New Jersey. That is, I must admit, relatively high. But property taxes are determined by local taxing bodies and fund important local services; schools, snow plowing, and sewers. Property taxes in Illinois are high, in many cases, in response to lost state funding at all levels. If our schools were funded more equitably from state income taxes property taxes could be lower and voters would probably demand that they would be. The fiscal mess in Springfield has forced local taxing bodies to bump-up rates merely to survive. Also, property tax rates vary wildly across the state with some of the wealthiest areas of the state paying the lowest rates and vice versa. In this way Illinois property taxes are even regressive.

Which brings us to the regressive nature of Illinois income tax. In Illinois the poorest taxpayers pay the same rate on their incomes as the richest billionaires, say our Governor, for example. In terms of total taxes it is worse. According to a 2014 Chicago Sun Times article “In Illinois, the state’s poorest residents—those in the bottom 20 percent of the income scale—pay almost three times as much of their earnings in taxes as the top one percent do.” This is not right. Paying 3.75% of your income in taxes is a great deal more onerous if you make minimum wage than if the bulk of your millions comes from capital gains and interest.

So, “liberal” Illinois is harder on it’s poor taxpayers than any of the so-called “conservative” states which surround us. To further exacerbate the problem, funding our schools with local property taxes has led to a huge disparity in educational outcomes between the rich and the poor in Illinois. (See my essay from May 27, 2015 called And the Loser is…) It is high time we shifted school funding in Illinois to an income tax based system and high time that we brought in a progressive income tax to fund it.

To address the fiscal crisis Illinois income tax rates were boosted in 2011 from 3% to 5% (before sunsetting back to 3.75% in 2015). Republicans reacted as if the sky were falling. But the top marginal rate in Iowa (which kicks in at $100,000) is 8.98%. In Missouri it is 6.0%. Wisconsin’s top rate is 7.65%. So the rich in Illinois are doing pretty well despite their belly-aching. This regressive system we have in place has not served us well, either, from a revenue point of view. It has been estimated that if we simply adopted the taxation scheme of Scott Walker’s Wisconsin in its entirety we would collect almost $10 Billion more per year which would more than cover our deficit and allow us to have good roads, good schools, and fund the social safety net programs Governor Rauner has threatened to cut. And would it “kill our economy?” Ask Scott Walker.

Let’s be honest. Nobody likes to pay taxes. It is harmful to tax too heavily. But there is a balance between maintaining world class infrastructure and services and being a third world country. Illinois is on it’s way to being a place people don’t want to live; not because income taxes are too high but because we are perceived as a state in a downward-spiral with poor schools, bad roads, and an embarrassment of a state government. Is it worth paying a bit more to have solvency, quality schools, and a world-class infrastructure? Absolutely. We are not a poor state. We can afford it.

 

by: Dustin Joy

And the Loser is …

In April, after serving two years as an appointed member of the Rockridge School Board, I ran for a full term spot and finished dead last among the competitors for the seat. I have a feeling the result was related to my outspoken advocacy for a Education Fund Referendum for the district. At my last meeting before leaving the board I had an opportunity to talk about my time as a board member and what I think I did wrong, or right. Here is what I said.

 

Ever since Nixon’s famous “you won’t have Nixon to kick around anymore” speech it has been the prerogative of people who lose elections to make it worse by saying something about the results and what they mean. I’ll try not to do that.

Since this is likely my last board meeting I wonder if you would indulge me, for just a couple of minutes to tell you something about what being on this board has meant to me and what I learned.

I would like to start by saying what a pleasure it was to discover, when I got on this board, that these folks up here were not a bunch of malevolent ogres, but in fact a group of good people who stepped up to do a job nobody else wanted to do, for no pay, in their free time, and who are doing their best with really bad options. I have learned a lot from them and they have been universally generous and helpful to me as I tried to learn the mountain of information required to be a really good and useful board member as Thomas the Tank Engine would say.

I lost this recent election pretty badly and I‘m afraid that it wasn’t for lack of “getting my message across” as losing candidates usually say, but very likely because I did get it across. I said what I thought and a lot of voters did not agree. That, of course, is their prerogative. I have been told by a number of friends since the election that it was a mistake to advocate an Education Fund referendum. School tax referenda are the only opportunity most people get to “vote against taxes” and if you look at the data on school referenda it is clear that they frequently take advantage of that opportunity. But I could not duck this question. I felt I had to make my position clear. Because working for an Ed Fund referendum was where I got started in this process three years ago and I still believe it is a sadly necessary step given the state of Illinois today.

It is hard to explain, in a few words in the newspaper, the complexity of the problems handed down to districts like ours from Springfield. It has taken me a full two years of study to put the picture together in my head and it is still a blurry picture.

Illinois – A Tale of Two Districts

Education in Illinois today is a story of haves and have nots. Rich suburban districts like Northfield H.S.D. 225 are buying their students laptop computers. Their state of the art schools offer classes like architecture, ceramics, photography, astronomy, forensic science, meteorology, and seven (yes, seven) foreign languages. At Glenbrook High School you can participate in debate team, contribute your writing to the literary magazine, take courses in radio and TV broadcasting (yes, they have their own radio station, WGBK), and compete on the swim team. The Northfield District spends $21,577 per student on operations. Virtually all of their funding is from local property taxes and you will be further discouraged when I tell you that their total tax rates are lower than ours.

Contrast that with Beardstown C.U.S.D. 15, a poor semi-rural district along the Illinois River. Beardstown currently spends $8464 per student on operations and $5300 on instruction. 76% of their funding comes from the State. I don’t need to tell you; they do not have their own radio station.
Sometimes you hear people say that money can’t buy education results. When I look at the funding and performance of Illinois schools, however (which any of you can do on the Illinois State Board of Education website) one quickly sees that money not only makes a difference, it makes a big difference. Northfield pays their teachers $101,000. 80% of those teachers have a masters degree. Beardstown pays their teachers $43,000. Given these options where do you suppose the best teachers in Illinois go?

In every parameter analyzed by the ISBE Report Card Northfield trounces Beardstown: Graduation Rate – 96% vs. 84%, PSAE scores – 85% vs. 31%, Readiness for college classes – 83% vs. 13%.

Rockridge?

What about Rockridge? The Rockridge District has a 19% higher median household income than the State, 41% higher than Rock Island County as a whole. Yet our district has no frills. We are not handing out laptops. We do not have a pool. Our buildings are old, our textbooks tend to be old, and we have grade schools which lack a full time principal on site. Right now our performance metrics are not bad. Our graduation rate is 96%. Our PSAE ranking is 62%, well above Beardstown, but far behind Northfield. Our readiness for college numbers stand at 45%, almost exactly at the state average. So far so good.

The Illinois Constitution says “The State has the primary responsibility for financing the system of public education.” Illinois, quite obviously, has not met this obligation. The state aid foundation number, $6119 has not changed since FY 2010. Costs, of course, continue to rise. Furthermore Illinois has not even fully funded its foundation obligations for the last several years. In FY 2013 payments to districts stood at 89% of the amount owed in the formula. In simple English this means that those rich districts like Northfield fully fund (some would say extravagantly) their schools from local taxes while poor districts in Illinois have lost even that pittance from the state which kept them afloat.

Rockridge was one of the losers. From 2009 to 2014 Rockridge’s general state aid went from about $2.7 million to $1.2 million annually. That is $1.5 million dollars gone missing from our budget – every year. What can we do?
The fundamental nature of budgets does not change just because Illinois fails to meet its obligation. You must cut spending or increase revenue. The board has done a great deal of the former. I sat up on the stage in the auditorium at a recent meeting and listened as students, teachers, and members of our community (people I respect a great deal) spoke earnestly about the value of music education and the quality of our program here at Rockridge. And I believed every word they said. And I wanted to get up and walk down into the audience and join them. And then I voted to make the program cut. Because we had to.

Whether we continue down that road, toward Beardstown, if you will, depends on how you view Rockridge today and what kind of community you aspire to have in the future. You might believe Rockridge is an extravagant district plagued by waste and overspending. I just don’t see that. But we can keep cutting. We can cut extra-curriculars and athletics, we can cut more of those people, like teacher’s aides and secretaries, whose daily interactions with our children shape their educational experience, and of course, we can cut teachers. We can become Beardstown with all that that entails.

I think I can safely say that we are not going to be Northfield but I think it is within our capacity as a community to keep being Rockridge. That is why I worked to get Rockridge Forward passed. That is why I supported the 1% sales tax. And that is why I said what I said during the campaign. My approach was unsuccessful, obviously, but I still am not convinced it was wrong. Problems are never solved by sweeping them under the rug. The solution to these problems ultimately lies with the voters of Rockridge, and Rock Island County, and, of course, the State of Illinois.

I said in the paper that good schools are the best thing a community can spend money on. They are an investment in the future. They pay dividends even to those residents without kids in the school. Studies show that and I really believe it. You can look around at communities with bad schools. You don’t want to live there.

As I leave the board I am still optimistic that we can keep Rockridge Rockridge. It has been my great pleasure to work with this board and these fine administrators and our wonderful staff. This place is as good as it is because every day these folks are doing more than they should have to with less than they need to do it. We, as parents, are lucky to have them.

by Dustin Joy