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Immigrant advocates regroup, prepare for austerity after Fair Tax defeat

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This story was originally published by City Bureau on November 20, 2020.

In 2014, a simple, nonbinding question appeared on the Illinois ballot.

Should the Illinois Constitution be amended to require that each school district receive additional revenue, based on their number of students, from an additional three percent tax on income greater than one million dollars?

The question passed with 60 percent support across the state. But in the November 2020 election, when a similar (but binding) question asked if voters supported a graduated income tax, the question failed—and it wasn’t close.

It was a deflating defeat to the organizers who have been pushing for decades to shift the tax system in the state away from the existing flat tax, which they criticized for being regressive and putting too much burden on low-income earners.

The resounding sentiment from organizations serving Chicago’s immigrant community is disappointment. Their communities will continue to pay the same rate as millionaires and billionaires in Illinois, and they expect instead the state budget will be balanced with cuts to social services. In some ways, they are bracing themselves to find ways to maintain the support systems they’ve built since the start of the pandemic.

United African Organization programs director Fasika Alem said her feeling is “obviously disappointment.”

“[The tax] seemed so progressive, it’s a good approach to invest more, provide more and invest in communities,” Alem said, adding that it was “an opportunity to close the budget gap.”

While advocating for the tax amendment, Governor J.B. Pritzker’s administration estimated that the graduated income tax could bring in an additional $3.4 billion a year in revenue by charging higher rates to high-income earners while maintaining the same or lower rates for lower-income earners. With its defeat, Pritzker warns budget cuts are to come. Because the amendment failed, any tax increase to make up the difference will affect all taxpayers, not just those earning high incomes.

Though the amendment lacked support statewide, it received the support of 71 percent of voters in Chicago. Grassroots Collaborative executive director Amisha Patel sees that as a result of the years-long effort from grassroots groups to advocate for a graduated tax system.

“I definitely had many many emotions after the defeat including grief and anger and upset,” Patel said. “Because of the massive misinformation campaign by the billionaires trying to protect their own dollars, they were able to get a large number of voters to vote against their self interest.”

Patel said when looking back to 2014 and the success of the nonbinding question on taxing millionaires, she believes voters largely would choose a graduated tax system when presented with clear information.

“We know when we have conversations with voters, [most people say] yes, we believe in this we’re going to vote on this,” Patel said.

Still, Grassroots Collaborative and other proponents for the amendment were up against a huge opposition campaign, which was able to lean into the distrust Democratic leaders have garnered over the last several years.

To look forward, Lisa Christensen Gee says we must look backwards. She’s the director of special initiatives with the liberal-leaning Institute on Taxation and Economic Policy. In their recent study, ITEP analyzed tax data from the last 20 years in Illinois and found that the flat tax rate system has exacerbated the racial wealth gap.

Christensen Gee remembers the ways that the state managed its budget during the 2008 recession, which brought cuts to jobs and social services. This is where the state is heading, Christensen Gee said: “Prepping for what we call austerity . . . In a moment of economic recession, the response is to batten down the hatches, cut down the budgets.”

Christensen Gee said some of the advocates who have put their efforts behind the proposed amendment are pivoting to advance other reforms. One of those efforts, for example, is expanding access to the state’s Earned Income Credit, a benefit for low- and moderate-income earners to reduce owed taxes and possibly grant a cash refund. Christensen Gee said there’s a push to expand the value of the state Earned Income Credit, as well as expand access so that 18- to 24-year-olds, caregivers and immigrants who pay taxes using an Individual Taxpayer Identification Number qualify.

Immigrant advocates say they are still feeling the long-term consequences of cuts to previous budgets.

“There have been so many rounds of layoffs and cutbacks in government,” said Grace Chan McKibben, executive director of the Coalition for a Better Chinese American Community. Based on what she’s seen in previous years, she expects new cuts to “grants to community-based organizations to deliver direct service to residents.” These services include job training, child care, elderly services, and immigrant services like English as Second Language classes and assistance with citizenship paperwork, she said.

Immigrant organizations will be closely watching the Immigration Services Line Item on the budget.

“We saw how it was impacted during the Rauner administration and we have seen how it got impacted and how it affected community members, so we are a little bit afraid, afraid of ISLI cuts and any other services that would be cut that are heavily used by working-class and lower-income families,” HANA Center’s lead organizer Youngwoon Han said.

And on the ground, this means they will have to find ways to continue to connect with the people they serve and show the resiliency that they have shown throughout the pandemic.

“A lot of these communities are already very resilient. A lot of them have seen much more difficult times, which is why they’re here,” Alem said.

“We will continue to reach out to communities and provide that little help that means a lot to people and boosts them,” she said. “It reminds people that someone is still thinking about them.”   v

This story was produced by City Bureau, a civic journalism lab based in Chicago.

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