URGE YOUR LEGISLATORS TO SUPPORT A RESPONSIBLE BUDGET AND INCOME TAX INCREASE

 

Today marks the second full month of the legislative overtime session, as well as the deadline for the one-month extended budget that legislators passed in late June in order to buy more time to work on budget negotiations.  That means that legislators must take action today and either pass another one-month extended budget or a full fiscal year budget.

 

Much of conversations around a full year budget have focused on a "limited" or "no-growth" budget.  This scenario might include some modest increase in revenue in the budget; however, the revenue proposals on the table (which could include gaming and a cigarette tax) would not grow with the economy and would do nothing to address the state's structural deficit and unfunded pension liability. Further, these revenue options would continue to underfund education, healthcare and essential human services. 

 

Advocates committed to comprehensive fiscal and education funding reform continue to urge legislators to support a responsible budget that adequately funds schools and other vital state services, and includes a modest income tax increase dedicated to education.

 

You can call your legislators too!  Use the A+ Illinois toll-free legislative hotline.  Even if you've called before, lawmakers need to hear from you before it's too late.

Call: 1-800-651-0315

 

RESOURCES

• Income Tax Options: read a CTBA analysis on potential uses of, and revenue generate by, increasing the state income tax by 1% or 2%.

• A+ Illinois' "Billion Dollar Bake Sale":  the Springfield event highlighted the real cost of school funding reform.

• Over 500 organizations around the state signed A+ Illinois' Pledge of Support for Reform! Last week, A+ Illinois ran a full-page ad in the Chicago Tribune, Chicago Sun-Times and the Springfield State Journal Register, calling on Gov. Blagojevich to support a "modest" income tax increase for schools.  View the ad, which lists the 500 supporting organizations.

DO YOU HAVE PENSION QUESTIONS?  IRSI HAS ANSWERS.

 

IRSI Director, Jourlande Gabriel, answers some frequently asked questions about the public employee retirement system.  Click on the links below to find out the answers!

 

Public Employee Retirement System Frequently Asked Questions:

 

Q. What is a defined benefit system?

A. Under a defined benefit plan, the employer guarantees...  

 

Q. What is a defined contribution system?

A. In contrast to a defined benefit plan, a defined contribution plan offers no guaranteed benefit...

 

Q. Why are some calling for Illinois to switch from a defined benefit to defined contribution system?

A. Currently, Illinois faces a $40.7 billion unfunded pension liability, one of the largest in the nation...

 

Q: Aren’t public employee pension benefits extravagant?

A. No. Public employee annuities are quite modest. The average annual pension benefit...

 

Q: Aren’t defined benefit pension a financial burden to taxpayers?

A. No. Employee contributions and investment earnings cover the bulk of defined benefit costs, while...

 

Q. Aren’t defined contribution investment returns better than defined benefit investment returns?

A. No. Defined contribution investment returns are far below defined benefit plans’ typical returns...

 

Q. Aren’t defined contribution plan fees and expenses lower than those of a defined benefit plan?

A. No. A defined contribution plan has an average...

 

Q. Aren’t all defined benefit retirement systems severely underfunded?

A. No. According to the Public Fund Survey, the average funded ratio...

 

Q. Aren’t all private sector employers eliminating their defined benefit plans?

A. No. Much of the increased utilization of defined contribution systems in private industry was caused...

 

Q. Don’t employees prefer defined contribution plans?

A. No. When given the option of switching to a defined contribution plan, workers overwhelmingly elect...

 

Help us build our FAQ list!

Do you have questions about public employee retirement systems? 

Submit your questions to:

 

 Jourlande Gabriel,

Director of the Illinois Retirement Security Initiative

at (312) 332-1103 or jgabriel@ctbaonline.org.

 

OPPORTUNITIES FOR LOW INCOME FAMILIES AND ASSET BUILDING IN ILLINOIS

 

A new report released by The Brookings Institution, Making Markets an Asset for the Poor, looks at the historical causes that have led to discrepancies in everyday costs for low and middle income families.  The study finds that low income families pay more than middle income families for the same goods and services. The report analyzes the effect of these cost discrepancies for low income families, and outlines a series of initiatives that would combat the discrepancy in costs and lead to savings that families could then invest in growing assets.

 

The Discrepancy in Costs:

 

Low income families pay more for the same goods and services that middle and upper income families use, including:

 

• Groceries: Although grocery stores have grown in size, which opens up the possibility for families to buy lower priced goods in bulk, low income neighborhoods have not benefited due to the high cost of development and austere zoning policies in low income areas.

• Insurance: Recent research on a sample of metropolitan areas found that the highest prices for insurance were in the lowest income neighborhoods. The largest price difference observed was in New York, where it cost, on average, $1,000 more every year to insure the exact same car and driver in a lower income neighborhood than in a middle income neighborhood.

• The information gap: Consumers who use the internet to price basic necessities pay comparatively lower prices than consumers who do not use these services. However, internet access among low income families lags behind higher income households. This makes low income families vulnerable to unscrupulous practices, and unable to use this price lowering tool.

 

While federal antipoverty policy has focused on boosting the income of the poor, various states have experimented with bringing down the prices for basic necessities. Through regulations, market incentives, and partnership with businesses, states are working to change the market. Some of the incentives pursued have included lowering business costs in low income neighborhoods through subsidies. This in turn has helped attract larger grocery stores, which sell lower priced goods. It has also helped to attract banks, which can encourage low income populations to become part of mainstream financial services, instead of having to rely on non-bank alternatives such as check cashers. Financial education in schools to combat the information gap, and regulations that prevent price gouging, have also helped to create a more equitable market for the poor.  Together, these cost-lowering initiatives help propel economic and social mobility for the poor, expand business opportunities in low income markets, and increase the effectiveness of income-boosting programs targeted towards the poor.

 

Click here to view the full report.

 

Asset Building in Illinois

The Illinois Asset Building Group (IABG) is a coalition of organizations from across the state dedicated to helping people achieve economic success and avoid financial disaster.  The IABG came together under the recognition that assets are important in helping families get ahead and gaining some financial security for future generations.  The IABG is reaching out to community groups, policymakers, private industry, and others to understand community needs, identify barriers to asset building, and create and support public and private policies that help people build and protect assets.

 

This year, the IABG passed legislation (HB1662) that will create a Children’s Savings Account Task Force to review program options, make recommendations, and create a strategic implementation plan to create a children’s savings account program in Illinois. Members of the Task Force will include community groups, financial education providers, experts from the financial and investment communities, advocates and other key stakeholders. The Task Force will develop a written report of its findings and recommendations to be presented to the Governor, the General Assembly, and be made available to the public no later than November 1, 2008.

 

For more info about the IABG or Children's Savings Account Initiative, visit www.illinoisassetbuilding.org or contact the IABG co-chairs:

 

• Dory Rand at the Sargent Shriver National Center on Poverty Law

312-368-2007, doryrand@povertylaw.org

 

• Gina Guillemette at Heartland Alliance

773-728-5960x283, gguillemette@heartlandalliance.org

 

OPPORTUNITY TO VOICE YOUR SUPPORT FOR CHILDREN'S HEALTH

 

Last week's Weekly Review featured an article on the broad, bipartisan congressional support for the reauthorization to the State Children’s Health Insurance Program (SCHIP) – a joint federal-state program established in 1997 to provide health insurance to children whose families have low incomes but earn too much to qualify for Medicaid. Yet, despite the bipartisan support, the President has threatened to veto the legislation, arguing that the expansion in the reauthorization legislation is too big. 

 

The Coalition on Human Needs has issued the following Action Alert, urging legislators to support children's health :

 

TODAY!! TELL YOUR SENATORS & REPRESENTATIVE: SUPPORT CHILDREN'S HEALTH!

Toll-free number: 800-828-0498*

Why your Members of Congress really need to hear from you:

This week Members of Congress will decide on the fate of children's health. They are poised to reauthorize the State Children's Health Insurance Program (SCHIP), a program providing health coverage to over 6 million low-income children.

Despite the success and broad bipartisan support for SCHIP, the program is under attack. The President has issued a veto threat and some Members plan to offer amendments that will weaken SCHIP and deny millions of children health insurance. It is crucial that you call your Senators and Representative toll-free TODAY and urge them to support SCHIP.

Without strong bipartisan votes in the House and Senate the program will expire in 62 days, leaving millions of children uninsured! But your calls can send a strong message both protecting the children currently enrolled and allowing millions more eligible children to get coverage.

Below are sample messages you can use when calling your legislator:

Senate Message: "I'm a constituent of Senator _____. Please tell him/her to vote YES on children's health and NO on all amendments that restrict children's eligibility for health coverage."

House Message: "I'm a constituent of Rep. ________. Please tell him/her to vote for the CHAMP Act (HR 3162) on the Floor.

More information about SCHIP Reauthorization:

• The Senate Finance Committee passed an SCHIP renewal bill on June 19 that provides $35 billion in new funding for the program over five years. The bill is on the Senate floor this week and it is expected that a number of weakening amendments will be offered.
   

• The House Committees with jurisdiction over SCHIP have introduced the Children's Health and Medicare Protection Act (CHAMP Act) HR 3162. In addition to renewing SCHIP, the House bill also contains improvements to Medicare and eliminates scheduled cuts to provider payments. The CHAMP Act includes $50 billion in increased funding for SCHIP over five years, expands Medicaid and CHIP to legal immigrant children and pregnant women, and includes other provision that strengthen and improve the program. The bill is scheduled to come to the House floor tomorrow

Families USA has developed a handy side-by-side comparison of the two bills.

*This toll-free number provided courtesy of Families USA.