January 31, 2017; WEAU-TV (Eau Claire, WI)
With so much attention being placed on the tumultuous first days of the Trump administration, it is easy to forget the importance of state governments and their budgets to the work of many nonprofit organizations. Spurred by the impact of the Great Recession, many state governments needed to reduce their investment in health, education, and human services. In many state houses, taxes were also cut in the belief that this would stimulate business growth to everyone’s benefit. Many nonprofit organizations saw their ability to fulfill their missions, or even their very survival, put at risk in this climate, which has continued in some form or other into its second decade.
In two neighboring Midwest states, Wisconsin and Illinois, multi-organization coalitions have begun to challenge the budgetary priorities of their state leadership and the resultant harm to vulnerable populations. Under the banner of “A Wisconsin Budget For All,” a coalition of 19 nonprofit organizations and unions beat Governor Scott Walker to the punch when it recently released a proposed 2017–18 state budget that they believe addresses the pressing human service needs the Walker administration has ignored.
According to WEAU, Eau Claire’s NBC affiliate, the coalition’s proposal, “invests in work, education, and health by closing special interest tax giveaways.”
“We have tax credits for no reason at all. When we give a tax credit, it should be to develop jobs and there’s no such requirement. So there’s a lot of money that’s being wasted in that direction that’s better use for the citizens.”—Nick Smiar, county board supervisor, District 15.
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In a state that is in its second year of operating without a comprehensive budget, the Illinois Responsible Budget Coalition has brought together over 300 organizations who share a belief that “Illinois families want a responsible state budget that invests in services that reward hard work, help create opportunity, promote learning, attract businesses and good-paying jobs, promote health and safety, protect the environment, allow children to grow and succeed, ensure independence and dignity for seniors and those with disabilities, and foster thriving communities.”
Wisconsin’s Budget for All calls for almost $900 million in new spending to allow “investments targeted to boost the common good in such key areas as work, education, and health. They would stimulate the economy by shoring up the purchasing power of many Wisconsin workers; they would help businesses by providing a more educated workforce; and they would improve the health of Wisconsinites, young and old, urban and rural; of new investment in work, health and education services.” Specific proposals include expanding the state’s earned income tax credit, investing in technical education, building the strength of the state teachers corps and expanding Badger Care, the state’s health insurance program.
The priorities of the Illinois Responsible Budget Coalition are limited by the state’s precarious financial situation and the impact of the political leadership’s inability to pass any budget. Their proposed budget wants to limit further losses and the harm the current stalemate is doing: “Across the state, Illinoisans want the public investments that allow communities to thrive like great schools, healthy families and safe streets. Businesses and organizations need a ready workforce and predictability to plan and grow.” A second group, Fair Economy Illinois, is more aggressive and has put forward a budget that seeks to increase investment along the lines of their Wisconsin counterparts.
In both states, there is the belief that the revenues needed to support these new expenditures ought to be raised by changes in the tax code and shifts in where the tax burden falls. The Wisconsin Coalition is proposing rolling back tax breaks that were designed to stimulate job growth but have, in their analysis, proven to be expensive, ineffective, and unfair. “Only 0.3 percent of Wisconsin tax filers received the credit, with nearly 80 percent of the credit going to individuals earning over $1 million.” In Illinois, the proposals include returning income tax to the level it was at two years ago, taxing retirement income, taxing high-speed trading, and limiting specific tax breaks granted to corporations.
The pain being felt by nonprofit organizations in both states have pushed them to come together and to become more aggressive. While the human service needs may have resonance, their revenue proposals are a difficult sell. As their legislatures create their next state budgets, their ability to mobilize voters to pressure their political leaders will be tested. If the political winds blowing in Washington, D.C. are matched in their state houses, this will not be easy work.—Martin Levine