Big Business: Screwing You With a Smile

By Kevin Robinson in News on Dec 7, 2006 2:50PM

The Civic Committee of the Commercial Club of Chicago released a report yesterday accusing the state of being in serious financial straits. With nearly $100 billion in unfunded liabilities, they claim that Illinois is on the verge of a financial crisis. Concerned about the state's unfunded liabilities, to the tune of over $100 billion dollars, the Civic Committee of the Commercial Club of Chicago is calling for state spending cuts of about $1 billion, and an income tax increase of 1 percent, including an increase on the corporate tax by 1.6 percent. They estimate that this will generate about $5 billion a year.

One key component of the proposal is the group's opposition to a "tax swap" — funding education with income taxes as opposed to the current system, which uses property tax. Going to the tax swap system would provide a more equitable distribution of resources in the state and shifting resources to communities that are "property poor." The current system (supported by many pro-business right-wingers) penalizes communities that don't have stable property bases to use as a resource for education, while lavishing school districts in wealthier areas with lots of funds. It's fundamentally unfair, and a big part of the reason that Illinois lags so far behind the rest of the nation in education.

While it may seem shocking at first glance to hear a business group call for an increase in the corporate income tax rate, the truth is that avoiding the tax swap actually will save money for the Commercial Club's members, to the tune of nearly 3 percent. Certainly suggesting that politicians raise the income tax by a paltry 1 percent on regular people, and 1.6 percent on corporations looks progressive, but the reality is that it is unlikely. So the status quo prevails. And that's the point. It's much easier to say "well, we're concerned about this budget deficit, and we want to see education funded" than it is to take the painful steps to fully and equitably fund education. And don't believe that it's just business that is responsible for underfunded education in Illinois. The state is only spending about sixty cents of every education dollar on instruction. The rest goes to "support services" (like construction and district-level administration).

Chicagoist finds all of this disturbing. Schools are underfunded (that's nothing new), but we feel like there is a general sense of cheapness by all involved in the state — from homeowners, to business, to politicians — and children in poor communities are paying the price.