The three state representatives of Glencoe, Kenilworth, Northfield, Wilmette and Winnetka came before disgruntled residents Sunday to address growing concerns of Illinois’ gaping budget hole.
Three local branches of the League of Women Voters – Glencoe, Wilmette, and Winnetka-Northfield-Kenilworth – hosted the forum, inviting Reps. Daniel Biss (D-17th District), Robyn Gabel (D-18th) and Karen May (D-58th) to New Trier Township High School in Northfield to offer their budget-balancing strategies.
“For too long Illinois [has been] financing its growing deficit by accumulating debt,” said Jane Goldenberg, acting co-president of the Winnetka-Northfield-Kenilworth league, nonpartisan policy-educating organization. “We are among the five states with the highest debt in pension liabilities. Our state fiscal crisis is devastating local governments.”
Biss, a mathematician who lives in Evanston, began his first term a month ago; his district spans West Evanston and Glenview to Glencoe. Evanston’s Robyn Gabel came to the Illinois House of Representatives last spring and was re-elected in November. Her 18th District covers New Trier Township and most of Evanston. Highland Park’s May, has served on the Legislature for the past 10 years.
Goldenberg asked the representatives pre-written questions compiled from a community survey that polled League of Women Voters members and representatives from local government and social service agencies. They were asked what taxes and service cuts they would support, what they thought caused the state’s financial crisis, and what could be done to prevent a future crisis of this magnitude.
Gabel and May were among the 60 House representatives who voted for the Gov. Pat Quinn approved last month. The legislation increases the individual income tax rate from 3 to 5 percent and the corporate income tax rate from 4.8 to 7 percent for the next for years.
“When we voted, we thought it was going to solve the problem for the most part,” Gabel said. “Two weeks later, there was another $2 billion hole.”
“I didn’t think the income increase was going to solve it,” May said. But she defended her vote, saying that the state would have had to cut 40 percent out of the budget without any new revenue coming in.
The state’s budget website purports a “budget shortfall of more than $11 billion,” but Biss said the number is closer to $14 billion, $6 billion of which is deficit. About $8 billion, he said, is the amount the state owes its “vendors,” meaning municipalities, social service agencies. May said the state is more than nine months behind on some payments.
“We are unraveling the fabric of human society because human services haven’t been paid,” May said. “As we are looking at cuts, it’s not going to be pretty at all.”
In terms of potential cuts, Gabel said they should be directed toward consolidating similar work done by multiple departments and improving efficiencies, such as using technology to cut down on paper waste.
The three legislators said they were opposed to further taxes and that there are currently no tax-increase proposals on the table, though May said she supports a cigarette-tax increase, which did not pass last month.
Barely a half-hour into the forum, the sense of disappointment and anger from the 60 or so audience members was apparent, with periodic outbursts – primarily aimed at Gabel and May.
“I guess it was my fault, because I didn’t vote for the income tax increases before,” May said. Still, she pointed out that, unlike other states, Illinois heavily depends on sales and income tax revenue, which tanked during the recession.
Biss called out Illinois’ “bad” tax system, which he said hurts the lower and middle classes and is ultimately ineffective. “We have been taxing the wrong things, the wrong way, at the wrong time,” he said.
Gabel agreed, saying she supported reversing the current tax system so that the sales tax would be reduced in half, but all services would be taxed equally. May said previous attempts to pass a service tax failed, but she noted that the practice has been recommended by public policy experts.
‘Budgeting for Outcomes’
The one beneficiary of frequent applause was Biss, who had the good fortune of only recently joining the House – that and the fact that his policy positions come from the perspective a mathematician rather than a politician.
“I may be fooling myself,” Biss said, “but I do think the real urgency in the Legislature is not to spend more than we have.”
He said the key to fixing the state’s budget is to change how it’s built – not to decide what each department should receive based on past budgets, but instead to focus on what services are needed and what outcomes are expected. The “budgeting for outcomes” policy law was passed last year, which May supported.
Perpetual Pension Problem
Eventually the conversation turned to pensions. May said she supports reforming the Illinois Municipal Retirement Fund (IMRF), eliminating cars, vacation days and overtime pay from pension payouts.
“As wrong as the abuses are, they’re not big enough to solve the whole problem,” Biss said. “[Reform] is going to require a lot more controversy and a lot more pain.” He explained that at the heart of the problem is Illinois’ treatment toward pensions – not as straight-up compensation, which is what a pension essentially is – but as “a magical thing to deal with later.”
Once the forum opened to audience questions, hostility heated the room, one citizen, a business owner, accusing Gabel and May of “killing our state,” because they voted to increase individual and corporate income taxes.
Eric Gibbs of Wilmette begged the representatives to vote against cutting education and social services, which Gabel pointed out would be difficult to avoid, as education and social services make up two-thirds of the budget.
“Is declaring bankruptcy an option for Illinois?” another audience member asked.
Biss said it was a terrible idea that he would oppose; Gabel said if that meant not being able to pay agencies and municipalities, it would be unfair; and May said she was open to anything, as long she understood what it entailed.