Marching for a Better Illinois

Starting this week, a diverse group of Illinoisans is marching 200 miles from Chicago to Springfield to demand a state budget that puts the people and the planet first. This march is most obviously a reaction to the current budget crisis that began on July 1, 2015. However, it’s part of a much longer struggle over the revenues and investments we chose to make in the state, and it affirms our need for a transformative, sustainable agenda for a better Illinois.

Starting in the 1990s, Illinois started spending more money than it took in. The main cause was an increase in pension payments. As more state workers retired, they started drawing more money out of the pension system than workers were contributing. Rich Miller painted a general picture of the pension problems in Crain’s, but the take away was this: state leaders have failed to fully fund the pension system for years, digging us into an ever deepening pit of debt.

In 2008, housing prices tanked and hit Illinois where it really hurt: property taxes, which make up a large portion of the state’s revenue. This made an already gaping deficit even more dramatic.

To help fill the gap, lawmakers passed an income tax increase in 2011. But there were two problems. First, it was set to last only until 2015. Second, it was still a flat rate. Illinois’ Constitution does not allow for graduated tax brackets, meaning that everyone (from those in deep poverty to multi-millionaires) is  required to pay the same percent of their income in taxes. Only 8 states have a flat tax; the rest have progressive tax brackets like the Federal Government. A progressive income tax could generate much more revenue by asking more of those who can afford to pay more, but that’s illegal in Illinois.

When Governor Rauner took office in 2015, he and the Democratic leaders of the General Assembly let the income tax increase expire. Governor Rauner came into office demanding changes to workers’ compensation laws, a freeze on property taxes, collective bargaining changes, and other reforms before he would agree to discuss the state budget. Democrats argued that this was an attack on workers and the middle class, and refused to make concessions. The two sides agree on almost nothing, and can accomplish very little without working together. Governor Rauner and House Speaker Michael Madigan rarely speak to one another, and there is no reason to believe a budget will be passed before the next elections in 2018.

While failing to fund the pension systems, Illinois leaders also have a bad habit of letting unpaid bills pile up. Currently, Illinois has about $12.3 billion of unpaid bills. Debts of this scale come with tremendous interest costs, not to mention the damage done by Illinois’ downgraded credit. But it’s important to remember that this is a new stage in an ongoing crisis—not a new crisis altogether. In the 10 years before July 1, 2015, Illinois paid out $1 billion in interest on past due bills.

The March to Springfield for a People and Planet First Budget has been decades in the making. We hope that as marchers stop for listening events in communities along the march route, regular Illinoisans will engage in healthy conversation about what we want in our budget and in our state. We suspect there will be more that brings us together than that divides us.

When crisis is the norm, our only option is to build an affirmative agenda for a radically transformed state. Getting back to the status quo of 5, 10, or 20 years ago won’t help us avoid the challenges we’re facing now. Before Rauner took office, Democratic leaders were slashing funding for critical social services and kicking the pension can down the road. Short-term solutions no longer mean anything. The time for tinkering is over. That’s why we’re part of the #MarchToSpringfield.

Latino Unemployment Up Slightly in July

NCLR jobs reportThe National Council of La Raza (NCLR) highlighted food service jobs as a bright spot for Latino workers in July. Latinos make up one quarter of the industry’s workforce, which gained 29,000 jobs nationally last month. (In the total workforce, Latinos make up 16%.) However, the overall unemployment rate for Latinos went up from 6.6% in June to 6.8% in July.

Each month, NCLR releases a snapshot of Latino employment in its Latino Jobs Report. You can find previous reports on NCLR’s publications page, or compare the monthly employment status of Hispanic and Latino workers with other racial groups from the Bureau of Labor Statistics:

Employment Opportunities Among Solutions for Gentrifying Neighborhoods

Policies for Gentrifying NeighborhoodsWe wrote a while back about the Gentrification Index from the Nathalie P. Voorhees Center at UIC. The index compares socioeconomic change across Chicago’s neighborhoods over the past 40 years. It’s worth checking out.

The supplement to that index, Gentrification & Neighborhood Change: Helpful Tools for Communities, came out earlier this year. This toolkit offers practical steps that neighborhoods can take to slow and prevent gentrification at different stages of the process.

Among them are Community Benefit Agreements (CBO’s), which are legal agreements with developers that can include such provisions as training and employment opportunities for local residents, construction of affordable housing, or funding of other programs or amenities to benefit the community. (Efforts are currently underway to obtain a CBO in conjunction with construction of the Gateway Real Estate Development Project in the Illinois Medical District.)

Here are a few other specific policies outlined in the handbook.

  • Tenant or Non-Profit Developer “Right to Purchase:” This strategy gives local residents or developers the right to buy property before it can be purchased by an outside developer.
  • Inclusionary Zoning: This program requires developers to offer a specified percent of housing in newly developed units at affordable, below-market rates to low-income households.
  • Limited Equity Co-op Housing: Buildings where the residents are all partial owners help keep rent down by eliminating the profit a landlord would earn. Governance is collective, and the value that can be earned when someone moves out and sells stock in the co-op is limited, ensuring the housing remains affordable.
  • Strengthened Rental Protections for Tenants: Rent controls can limit how much, and under what circumstances, landlords can raise rent. Rent reduction programs can reduce a tenant’s rent based on missing or inadequate services.
  • Protections Against Condominium Conversion: Converting apartments into condominiums lets landlords cash in on rising property value, and reduces housing available to low-income households who cannot afford to buy. Reducing conversions to condos can keep housing more affordable.
  • Affordable Housing Trust Fund: These can be established to help create or preserve affordable housing for low-income households.
  • Housing Levies: These property taxes generate money which is then used to support affordable housing in the area. These can be used with specific projects, or used as an ongoing revenue source for an affordable housing trust fund.

Check out the full handbook for more!

New Transitional Jobs Research On the Way

New TJ ResearchLarge-scale subsidized employment strategies have been around in the United States for the better part of a century. The Works Progress Administration and other New Deal programs were the first, employing millions of Americans during the Great Depression.

Where New Deal programs were designed to counter high unemployment levels on a large scale, most of today’s smaller scale subsidized employment programs have a special focus on improving the employment prospects of those who remain unemployed even when unemployment is improving.

In 2010, after a resurgence in subsidized employment programs following the Great Recession, the U.S. Department of Health and Human Services and the U.S. Department of Labor launched a collaborative effort to study the comparative effectiveness of modern subsidized employment models.

The first results of the studies will come out in 2016, but earlier this year, the departments released the preliminary report “Testing the Next Generation of Subsidized Employment Programs: An Introduction to the Subsidized and Transitional Employment Demonstration and the Enhanced Transitional Jobs Demonstration.”

The report details the program variations being studied (modified transitional jobs models, wage subsidy models, and hybrid models). Among the 13 programs is the Bridges to Pathways Program in Chicago, which combines social-emotional learning, high school completion, and paid internships for youth involved in the criminal justice system.

Mark Greenberg of the Department of Health and Human Services, says this about the report: “While we look forward to the research findings, there’s more that states, tribes, and communities can do now, under current law with current resources. States and tribes are free to use TANF funds for subsidized employment, and engagement in a subsidized job counts toward the TANF “participation rates” requirement as long as the family continues to receive TANF assistance…We hope that the release of this new report will spur additional discussion in states and communities about the potential for increased use of subsidized employment as one key part of a strategy for supporting efforts to help families succeed in work.”

Trickle-Down Only Brings Us Down

Trickle Down Brings us DownTrickle-down economics fails working-class Americans, and we have the experiences to show it. Last month, The Center for American Progress analyzed wage data from the past 50 years, pointing out that since 1981, the income growth of the top 1% has failed to stimulate wage increases for the bottom 90%. In other words–the wealth is not trickling down.

In the 1980’s, Ronald Reagan pursued an agenda of tax cuts and slashing social programs. Brendan Duke writes that since then, we have been able to watch “a natural experiment in trickle-down economics.”

The idea of trickle-down, he says, is that “tax cuts, deregulation, and the destruction of basic labor protections would unleash a wave of economic growth. A smaller share of the pie would go to most Americans, but they would be better off because these policies would grow the overall pie.”

But the pie has not turned out as this recipe promised.CAP income inequality

During the ’50s, ’60s, and ’70s, income growth among the bottom 90% matched overall income growth fairly closely. Prosperity was somewhat shared. But from the ’80s onward, income growth among the bottom 90% has trailed overall income growth much more. The trickle went up, not down.

We also have state-level examples of this experiment. Last year, the Huffington Post compared California and Kansas, and their vastly different tax policies. After Kansas began implementing radical trickle-down measures in 2010, it is paying dearly. California is the opposite. In response to a budget crisis in 2012, they raised taxes, and created higher tax brackets for the wealthiest earners, leading to greater shared prosperity.

Not only do tax cuts for the wealthy leave a smaller portion of the economic pie for the remaining 90%–they shrink the whole pie! The Center for American Progress notes that “increased inequality does not appear to have delivered higher overall income growth: The pie has grown fastest and most sustainably during periods when the middle class got a sizable share.”

A strong economy is a shared resource. It does not succeed when only a few are successful. It succeeds when all participants are better off. Businesses need a strong consumer base to thrive–and for that we need policies that ensure working-class incomes are more than just a trickle.

Illinois is Already a Top Business Creator

Business CreationGovernor Rauner is holding the state budget hostage in order to pass reforms that he believes will make it cheaper to do business in Illinois. The collateral damage will be tremendous if a budget deal is not reached before the fiscal year begins on July 1.

This is a destructive way to solve a problem that does not even exist. Data from the Bureau of Labor Statistics show that Illinois is already a great place to start a business. Illinois ranks number 2 among states where business are being started the fastest, following only Massachusetts. “The number of business startups in Illinois jumped 4.7 percent to 421,908 businesses in the fourth quarter compared with a year earlier,” reported Crain’s earlier this month.

Not only is Illinois outperforming 48 states in business creation, these rankings are from the last quarter of 2014–before Rauner let Illinois’ income tax drop in January. There is no reason Illinois cannot have revenue for services, and be business friendly at the same time. We already have, and we can continue to do so.

But there is something Illinois cannot do. We cannot afford a shutdown that diminishes services and opportunities for Illinoisans in an attempt to solve a problem that Illinois does not have.

Let’s be friendly to both businesses and the people who benefit from state services. Let’s choose revenue.

New Infographic: The Recession Continues for Many in Illinois

Working In Illinois Factsheet_FinalSome in Illinois have seen a recovery since the end of the Great Recession. But for many more, the recession continues. This is especially true for those who rely on the services that Governor Rauner wants to slash in Springfield. There is nothing fair about these cuts.

In the Chicago Jobs Council’s new factsheet Working In Illinois: The Recession Continues in 2015, we offer some perspective on the current “recovery,” and the factors that make it hard for many in Illinois to advance. With more families sliding into poverty, and a safety net that catches so few of our neighbors who are struggling, Illinois leaders must make a commitment to prosperity, opportunity, and upward mobility through services–not cuts.

Not only are 50,000 more working families in or near poverty than in 2007, these are the very families that bear the heaviest burden paying for our government. In Illinois, the poorest 5th pay over 13% of their income in taxes. Rauner’s cuts would reduce services for these people: the ones who are paying for them, and the ones who most need them. Yet, he stubbornly refuses to generate revenue by raising taxes on billionaires like himself. The top 1% in Illinois only pay 4.6% of their income in taxes. The Keystone Research Center found that Illinois would raise an additional $8.6 billion simply by asking the richest to pay as much as the middle 5th of Illinoisans. Illinois does not have a budget crisis, at least not a real one. Illinois has the resources it needs to balance the budget. The real catastrophe is an unfair tax system that asks the most from those who have the least.

Share the truth about Illinois’ budget. Let your friends know that more hard working Illinois families are poor than before the recession began, and that they should be our priority. Demand that your state leaders solve this false budget crisis with revenue, not cuts.

Data Abounds in Chicago, and More is Coming

Data PortalIllinois is a leader in open data. The city of Chicago has a robust and well-maintained data portal with nearly 1,000 data sets regarding everything from Condom Distribution Sites to High School Progress Reports. We’ve recently included a few of these lists that may be interesting to service providers on the WIRE’s Additional Information page. The full list includes:

The Illinois state government also has a data portal with mini-sites for RockfordChampaignBelleville, and the South Suburbs. Cook County is in on it too.

These data portals have useful and interesting information for those with the time to sort through all of the data sets. But they are only the beginning of what is to come. In 2013, Illinois set new priorities for transparency through technology. Transparent data is the foundation that hints at bigger changes. Obviously more government data online means more information for the public. Over time, this information will also translate into new ways of interacting with our government, as the clunky lists on data portals turn into apps on our phones or streamlined applications online.

Open data is changing a lot already, and will continue to disrupt the way we get information from and interact with our governments. In the meantime, it is also just fun to explore.

Getting Local With Affordable Housing Data

Rent Ward Data (1)In Chicago’s 24th ward, largely covering the North Lawndale neighborhood, 73.7% of renting households spend over 30% of their income on rent. That figure, from 2010, used to be 29.0% in 2000. (This compares to 52.6% statewide in the same period.1U.S. Census Bureau, 2010 American Community Survey)

This is one topic covered by the Housing Fact Sheets created this year by the the Chicago Rehab Network and the Nathalie P. Voorhees Center at UIC. The fact sheets detail changes around affordable housing issues in each ward from 2000 to 2010. Each page covers race, population, and income data, as well as the following detailed housing topics:

  • Rental housing costs
  • Housing costs for owners with a mortgage
  • Cost burdened households by income level
  • Units by building size
  • Housing unit production

You can look up a ward on the city’s website here.

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