CTBA Legislative Successes
Legislative Task Force on Economic and Workforce Development
Working with Governor Ryan’s Education Funding Advisory Board (EFAB)
Technical Advisor to the Joint House/Senate Committee on Property Tax and School Funding Reform
Technical Advisor to the Senate Education Committee and HB/SB750
Passage of Illinois Earned Income Tax Credit (EITC)
Enhancement of the Illinois Earned Income Tax Credit (EITC)
More Families Eligible for the Illinois Earned Income Tax Credit (EITC)
Comptroller’s International Tax Shelter Commission
CTBA's model for attaining progressive public policy change does not only include issuing reports. CTBA goes once step further to make policy change for the better. In its brief existence, CTBA has had a number of policy, media and outreach successes. From being appointed technical advisor to various state legislative committees and commissions, to ultimately helping draft legislation and design administrative reforms that have generated or maintained over $2 billion in revenue for public services, created Illinois' Earned Income Tax Credit, and resulted in state prescription drug purchasing and health and human service provider fee for service reforms, CTBA has successfully taken a data-driven, bipartisan and collaborative approach to public policy.
State Representatives David Miller (D-29) and Don Moffitt (R-74), have committed to forming a bipartisan task force focused on producing a statewide initiative integrating workforce and economic development (the "Task Force") using the State of Working Illinois report as the starting point, and appointing CTBA as technical advisor. The task force will be formed during either the veto session in November 2006 or Spring of 2007.
Working closely with the Governor’s Bureau of the Budget, CTBA suggested a series of cost-saving and revenue options, many of which ultimately became law, including successes such as: (i) decoupling Illinois estate taxes from the federal repeal of the estate tax; (ii) decoupling Illinois corporate tax from the federal bonus depreciation rules; (iii) conducting a tax amnesty; (iv) reducing the net operating loss deduction rules; (v) reducing or eliminating ineffective tax expenditures; (vi) reallocating member initiative expenditures to general operating funds; (vii) prescription drug purchasing reform; and (viii) eliminating unnecessary middle-management positions in Illinois government. CTBA's recommendations helped to close the budget hole and protect funding for education and essential human services, and collectively raised or maintained over $1.5 billion in state revenue annually.
CTBA worked closely with EFAB on school funding reform over the years, being specifically responsible for revenue reform and cost modeling. EFAB’s final report to Governor Ryan in 2002 included a number of CTBA’s state-based revenue enhancement recommendations.
In 2001, the General Assembly created a Joint House/Senate Committee on Property Tax and School Funding Reform. CTBA was appointed as the technical advisor to the Joint Committee, and given the responsibility of devising a reform package for the Committee’s consideration.
In 2004, CTBA’s comprehensive fiscal reform proposal was introduced as HB750. The bill, drafted entirely by CTBA, would accomplish education funding and fiscal reform by increasing the state’s contribution to education funding while reducing reliance on local property taxes, eliminating the state’s structural deficit, and enabling the state to provide essential public and human services. This would be achieved by increasing the state income tax from 3 percent to 5 percent, reducing property taxes statewide by over $2.5 billion, expanding the sales tax base to include certain consumer services and almost $1 billion in annual tax relief targeted directly to low- and middle-income families.
CTBA subsequently was appointed to serve as technical advisor to the Senate Education Committee, coordinating a series of subject-matter hearings around the state on HB750 throughout 2004. During the spring 2005 legislative session, the bill was introduced as HB750, Senate Amendments 1 and 2, sponsored by Senators James Meeks and Miguel del Valle. CTBA was charged by the Senate Education Committee to be lead testifier on the legislation at over 10 public hearings on the bill. The bill was not called to a floor vote because of the Governor’s threatened veto.
CTBA is co-chair of the "Make Work Pay" coalition, which was dedicated to implementing an Illinois EITC, based on the federal credit. The federal EITC provides targeted tax relief to low and moderate income families. This successful program operates as both an income supplement and work incentive for poor families. It also stimulates the economy by putting more disposable income in the hands of low-income families, who in turn spend that income in the local economy. At his request, CTBA briefed Speaker Madigan on the potential benefits an Illinois EITC had to offer low-income workers across the state. Ultimately, Speaker Madigan requested CTBA to draft the legislation, which passed in May, 2000.
The state's EITC as enacted in May of 2000, was scheduled to sunset in 2003. CTBA worked to eliminate the state EITC’s sunset provision and to improve the credit by making it refundable. Again, at the request of legislators, CTBA ultimately drafted the legislation, provided testimony during revenue committee hearings, and developed fact sheets on the state EITC. Mr. Martire also dedicated a Sun-Times column to explaining the importance of the state EITC and the need for its expansion. CTBA worked closely with State Representative Barbara Flynn Currie and State Senator Barack Obama, the chief sponsors of the state EITC bill, in making this a reality, by engaging in a public education campaign, featuring press conferences, town hall meetings and editorial board briefings. These efforts ultimately paid off, as the Illinois General Assembly voted both to eliminate the state EITC’s sunset provision and make the credit refundable. With refundability, an additional 150,000 to 200,000 working poor families in Illinois now benefit from the credit.
SB 338 simplified the Illinois EITC statute, ensuring that all low-income, working Illinoisans who receive the federal EITC also get the full amount of the state EITC. Because of confusing and unnecessary statutory language regarding the refundable portion of the state EITC, the Department of Revenue (DOR) has excluded the following groups of taxpayers from receiving EITC refunds:
The existing statutory language also has led the DOR to create a complicated eligibility worksheet in its tax-form instructions, confusing many Illinois taxpayers and causing them not to apply for the state EITC even though they are eligible for it.
In 2004, the Comptroller appointed CTBA to serve with the Department of Revenue, on the Comptroller’s commission dedicated to reviewing corporate tax inversions, whereby businesses reincorporated offshore to avoid paying state taxes. In this role, CTBA helped identify international tax avoidance schemes, measure state revenue lost to such schemes and assisted in drafting legislation to deny state contracts to expatriate corporations. Mr. Martire provided testimony on the comptroller’s bill, HB 4194, which passed the Illinois House unanimously in 2004.
At the request of State Representative Jack Franks, CTBA drafted a corporate accountability bill, HB235, which passed in 2003. The bill requires corporations that receive tax breaks for economic development to disclose all job creation and retention results they achieve and to have those results publicly posted on the internet. A company that fails to meet its part of the bargain is subject to having its tax benefits clawed back by the state, unless that company can demonstrate extenuating circumstances. This legislation has been hailed as a national model for corporate accountability initiatives. CTBA was the lead testifier on and principal drafter of the bill.
Keeping up with current legislation is a difficult task, but at CTBA we recognize that educational advocacy is key to bridging community members, advocates and legislators. In order to provide a valuable resource to our supporters, CTBA endeavors to maintain a timely Legislative Roster. This roster lists bills, resolutions, and budget items relevant to CTBA's partners, Illinois' human service providers, and other persons concerned with issues affecting low- and middle-income families.