Speaker: Don’t Blame State Workers fo Fiscal Woes

* Posted at the request of the GEA Presidents

Ralph M. Martire loves to quote from Adam Smith, the founder of modern economic thinking and a favorite of fiscal conservatives.

He cites the 18th century economist saying the remedy of taxation should be “relieving the poor” and “burdening the rich” to help society. But Martire, executive director of the Center for Tax and Budget Accountability in Chicago, admits that quote sounds like it came from another historic figure.

“That is not Karl Marx speaking. It’s from Adam ‘Freaking’ Smith!” Martire said, drawing laughter from many university professors and others gathered Monday night in the Lumpkin School of Business lecture hall at Eastern Illinois University.

Martire uses more than rhetoric when he talks about tax policy. He loves to shoot down political myths on Illinois and its taxation system.

For example, cutting wages of lower- to middle-income households in different ways only hurts economic growth, Martire said. He said the research of the CTBA, a non-partisan center, shows raising taxes on higher income earners and a sales tax on consumer services could draw on the 36 percent of income generated from services in the economy.

“Low- to middle-income families are the better spenders. They spend it in the local economy. And much of the economy is consumer spending. Cut their wages and you take more consumer spending out of the economy,” said Martire, whose lecture was sponsored by the faculty University Professionals chapter at Eastern.

If politicians cut $4 billion from the state budget, as some lawmakers have proposed in Springfield, then that could cost 56,000 jobs, Martire predicted. Double those cuts and it costs the state 128,000 jobs.

“The public rhetoric on tax policy is 180 degrees from accuracy,” Martire said. “Hurting the local economy doesn’t make any sense.”

He argued against claims that the state income tax increase has wrecked the Illinois economy.

“State taxes are not the significant burden people pay. It is false to say the higher state tax rate causes a bad economy. And Illinois has a lower overall tax burden than many states,” he said.

The budget proposed by Illinois Gov. Pat Quinn is targeting the most vulnerable people in the state with billions of dollars in cuts to human services, including assistance to the mentally ill, developmentally disabled, women needing help against domestic violence and children with special needs.

“Illinois is low already on human services funding compared to other states. It’s not the Cadillac program some claim it is. Illinois overall has the fifth richest state economy. And that’s how we take care of the most vulnerable people in our state,” Martire said. “These cuts will actually hurt us more later because they create problems we will have to fix years from now.”

Martire said the myth that state workers are bilking the taxpayers in Illinois must be exposed. He cited data showing lawmakers in the past shirked their responsibility to properly fund the state pension system.

“They used the revenue to pay for services. This has nothing to do with outrageous benefits. We have to get away from this silly talk about taking away benefits from employees who have paid into the system,” he said.