The following is a statment from AFSCME on the Civic Federation's new report on the state budget.

The patient, state government, is ailing. Symptoms include chronic failure to adequately fund basic services or pay bills, forcing harmful cuts. But this report fails to diagnose the cause, while the bitter medicine it prescribes offers no cure.

Illinois’s persistent mismatch between costs and revenues—its structural deficit—results from a broken and unfair tax system that fails to capture economic growth and squeezes the middle class while granting rich people lower effective tax rates and allowing two-thirds of all corporations to pay no corporate income tax at all.

But the Civic Federation fails to ask wealthy individuals and businesses to pay their share. Instead, it says, seniors should be taxed while losing prescription drug help. Nonprofits and school districts should suffer late payments. Modest pay and pensions earned by teachers, caregivers and other public employees should lag inflation, an effective cut even as the federation would saddle them with added costs for health care.

We think the temporary income tax increase should be replaced by a fair tax plan with graduated rates, ensuring that rich people and big corporations finally do their part. Such a fair tax plan could prevent further harmful cuts to basic priorities like health care, education, public safety and jobs while easing the middle-class squeeze.

It’s disappointing but not surprising that a supposedly civic-minded group funded by rich people and big business would advocate a plan that perpetuates a tax system riddled with unfair advantage for its benefactors.

That’s the big picture. At ground level, in many instances the federation excludes important detail:

• On debt, it opposes restructuring because selling bonds would incur servicing costs, yet fails to note that unpaid bills accrue substantial interest under the Prompt Payment Act while trapping non-profits, schools, hospitals and every other entity that does business with the state in a cycle of forced borrowing.
• On corporate tax expenditures, it neglects to estimate the annual cost of giveaways to Sears, CME et. al. beyond FY 2014, minimizing their future burden on state taxpayers. Instead of plainly stating that such giveaways are unfair and unaffordable, the federation meekly urges further study.
• On disability services, it endorses the closure of state centers serving individuals with severe mental illnesses or profound developmental disabilities to yield what it calls “substantial savings,” omitting that state law (the Community Services Act) requires such funds to be expended for mental health or disability services, not counted as savings, and that health advocates are already threatening the state with costly litigation on this matter.
• On pensions, it cites rising employer contributions required in law as a reason to gut provisions protecting retired public employees from inflation, but fails to note that the normal cost of those modest pensions is actually declining. Most of what the state is now paying is debt and interest accrued over decades of short or skipped payments.
• On health care, it calls for the state to shift premiums to retirees but excludes the crucial fact that typical retirees already pay $3,500 a year in co-payments, deductibles, Medicare and spousal premiums and other out-of-pocket costs.
• On wages, its call for an indefinite pay freeze for state employees neglects the context that Illinois has the nation’s smallest workforce per capita, that these public servants made concessions including unpaid furloughs and wage deferrals two years running, and that a modest cost-of-living increase equates to just three-tenths of one percent of the annual operating budget.

The federation’s repeated omission of relevant context calls its credibility into question. An even-handed observer would present all the facts rather than selectively excluding some. Instead this document reads like a series of ideological conclusions searching for factual support.

AFSCME Local 31 represents Illinois state employees.