The scales are tipped in Illinois, and not in favor of the 99 percent, community groups say. A series of reports and actions, including the delivery of a golden toilet, seek to highlight the state cuts and corporate loopholes that advocates say are leaving Illinois citizens in the dust.
“We keep hurting both our tax base and our jobs base in Illinois. Once and for all, we must rid ourselves of this myth that tax breaks for the rich and big corporations create jobs,” said David Hatch, executive director of the Indiana Illinois Regional Organizing Network, a member of Make Wall Street Pay Illinois.
Illinois’ budget deficit is more than $500 million, and the preferred response to budget cuts has been taking social programs to the chopping board. Medicaid, community mental health services, school education funding and education operation funding have all seen cuts since the recession hit in 2008.
Meanwhile, in the spirit of creating jobs, big companies have been offered tax breaks at both the state and city level. Sears Holdings Corp. and the Chicago Mercantile Exchange Group have been some of the biggest recipients with a $371 million tax break from the state passed in December.
But there is an unintended consequence of this strategy, found a report by Make Wall Street Pay Illinois and authored by the Alliance for a Just Society, and it’s not the promised job creation. A cut in general funding of 1 percent is tied to the loss of 6,230 jobs, found The Cost of Cuts in Illinois investigation. And without revenue coming in from corporate taxes, this report predicts this will only get worse.
Communities of color have been hit hardest by the ripple effects of the cuts. The unemployment numbers in Illinois in 2011 were for white adults was 8.4 percent, while for African Americans and Latinos, it was, respectively, 19.4 and 12.1 percent. The state average was 9.7 percent.
How much are these communities missing out in lost corporate tax money? A report released by the Institute on Taxation and Economic Policy with Citizens for Tax Justice found that a significant percentage of Fortune 500 companies paid, on average, only half of the standard state corporate tax rate of 6.2 percent. Between 2008 and 2010, 265 of America’s 280 largest companies only paid 3.0 percent of their U.S. profits in taxes.
The Chicago Mercantile Exchange, in addition to the $77 million tax break it would receive from the state’s bill passed in December, was also offered $15 million in Tax Increment Financing District subsidy money by Mayor Rahm Emanuel. But analysts with the coalition group Stand Up! Chicago said that the money wouldn’t go to create jobs.
“As it was awarded its multimillion-dollar tax loophole, [Chicago Mercantile Exchange] announced that it would use electronic trading to set grain and livestock prices, a move that would put many floor traders, as well as the clerks and runners who support them, out of a job,” wrote Elizabeth Parisian, policy analyst for Stand Up! Chicago.
The group also said that the public money would have been for bathroom and café improvements and, to protest the plan, delivered a golden toilet to the Chicago Mercantile Exchange.
The company eventually rejected the TIF funds, as did the CAN Group and Bank of America.
Pressuring the Chicago Mercantile Exchange to decline the funds, and being successful, is not only a win but also a chance to change the narrative around where public money is best spent, say activists.
“We're pleased that [the Chicago Mercantile Exchange] has listened to the people of Chicago,” Parisian said, “ and recognized that TIF money belongs to our schools and communities, not billion-dollar corporations.”
Photo credit: Jose P. Isern
© Community Renewal Society 2012