Ill. Coalition’s Risky Stance on Tax Rise Staves Off Some Cuts

Nonprofits are used to defending their turf when lawmakers start scouring their budgets for ways to cut spending.

But in Illinois, hundreds of nonprofit leaders decided that their state’s budget was in such bad shape they needed to focus more on the other side of the budget ledger—revenue.

Illinois has suffered an especially severe financial crisis during the economic downtown, as many state agencies have notoriously fallen behind in their payments to contractors, including nonprofits. The state had already made deep cuts in public spending, and was considering even more, when charity leaders and others joined hands in late 2009 to form the Responsible Budget Coalition.

“It was fairly obvious to advocates we needed to put our heads together in ways we never had before because the stakes were so high,” says Sean Noble, former policy director at Voices for Illinois Children.

The coalition—which unites close to 300 human-services nonprofits, civic and advocacy groups, teachers, and unions—began working to spread the message that Illinois had a moral and legal obligation to spend enough on education, health care, human services, and public safety to allow its citizens to thrive.

And that, it argued, meant raising taxes—a position that many lawmakers considered politically toxic.

The coalition, led by John Bouman, president of the Sargent Shriver National Center on Poverty Law, mobilized people across the state to speak at forums, contact local journalists, and lobby lawmakers. It staged eight news conferences on the same day across the state, organized a massive “Save Our State” rally at the Springfield statehouse, and made taxes an issue in the fall 2010 elections.

Success came slowly: Gov. Pat Quinn, a Democrat, proposed raising taxes in 2010, but could not win support from the General Assembly. He narrowly won re-election in fall 2010, however, fending off a challenge from Dan Brady, an anti-tax Republican.

With the state staring at a $15-billion budget shortfall that year, Mr. Quinn again proposed raising taxes. This time, the General Assembly agreed, voting in January 2011 to increase personal income taxes by almost 67 percent and corporate income taxes by almost 46 percent through 2015.

Mr. Bouman said the group succeeded because it focused on taxes rather than specific spending cuts.

The group’s members compete with each other for state money, he says, and some are even political rivals—for example, the coalition included unions who represented workers at state-run mental health institutions and nonprofit leaders who favor smaller, community-based mental-health facilities.

“There’s unanimity behind something like, Don’t make unwise, unfair cuts,” Mr. Bouman says. “But if you try to get more specific than that, it flies apart.”

Of course, not everyone believes Illinois is better off with higher taxes. No Republican lawmaker voted for them, and critics complain they will drive business to other states.

The coalition is taking a breather right now as its members tend to their own issues, but Mr. Bouman says it still has more to do. Not only are the new tax increases temporary but the current flat income tax should be replaced with one that would make wealthy people pay more. “At some point you need to reorganize and get the energy back,” he says.