By Evan Callan
October 26, 2020
What do taxes have to do with the environment? Quite a lot, actually. Taxes help fund local, state, and federal budgets that regulatory agencies rely upon in order to protect us from air, water, and land pollution. Most notably, the Illinois Environmental Protection Agency (IEPA) monitors the effects of pollution from heavy industry and agrochemicals on Illinois’s regional biodiversity, state parks, and waterways. Higher levels of pollution are frequently concentrated in both urban and rural areas of economic inequality. Now, in the midst of the COVID-19 pandemic, these same communities face water shutoffs, while payment plans or shut-off suspensions are enacted in others across the state. Regardless of race, economic status, ZIP code, or pandemic-related decisions, Illinoisans deserve fair treatment under Illinois state law. This includes modernizing our income tax system in order to adequately fund the government agencies responsible for protecting these communities, including the IEPA.
Currently, Illinois is only one of eight states to have a flat rate income tax system. Since the Illinois constitution requires all taxpayers to pay the same rate, regardless of ability to pay, a family making $20,000/year pays a larger share of their income in taxes than a family making $20 million/year. Specifically, low- to middle-income earners pay nearly twice as much in state and local taxes as the top 1% of earners because of the combination of sales and excise taxes, property taxes, and income taxes. These regressive features of our current tax system only exacerbate income inequality. While many cities and states face significant pandemic-related budget deficits, Mayor Lightfoot’s budget plan includes increasing property taxes, raising Chicago’s gas tax, and potentially laying off or furloughing city workers, all of which will negatively impact low-income communities in the interim. Furthermore, a recent study conducted by RAND highlights the pace at which median income has not kept up with GDP, which has led to an astonishing $2.5 trillion in lost economic gains over the last 45 years. Billionaires have gotten $637 billion richer during this pandemic, while millions of low- to middle-income Americans, who were already strapped for money, have filed for unemployment and SNAP benefits.
Due to the Illinois budget deficit, essential programs have seen drastic cuts in funding over the past several decades. The current Illinois tax system fails to adequately fund public education, which has driven up local property taxes (Illinois has the second highest property tax rate in the nation). Public services, like mental health treatment, childcare, and homeless shelters, have also suffered because of funding cuts. The IEPA has seen a steady decline in funding since 2003, affecting its workforce, and in turn affecting the agency’s ability to adequately protect and monitor the state’s clean water, air, and land. Years of improper funding, compounded by recent federal environmental rollbacks, makes standard-setting, regulating, and monitoring more difficult, because these agencies lack funds and personnel. Similarly, the Department of Natural Resources has struggled to keep parks open and safe due to funding and staffing cuts. These cuts disproportionately affect BIPOC communities and low-income communities that already face a nature gap. It is no secret that economic resources and investment in community health and well-being are unequally distributed throughout Chicagoland. Additionally, the history of redlining (perpetuated by banking practices in the twentieth century) and the concentration of heavy industry, along with an airborne pandemic and rise in racialized violence and police brutality, perpetually subject these communities to climate apartheid.
IEPA is the government agency that addresses threats and impairments to Illinois waterways and air, but because of underfunding and under-staffing, it has not been able to adequately address three examples of environmental injustice in Chicago:
First, McKinley Park is a largely working-class Latinx community, where, despite the need for more affordable housing, residents experience high levels of air pollution and health hazards from concentrated industry like the MAT asphalt plant. Second, the IEPA approved a permit with “special conditions” for the General Iron move, but it is unclear how the requisite monitoring and testing of emissions will be handled or funded. Third, although the IEPA successfully intervened to “remediate the impacts” of the Hilco demolition, the problems with the site, the sale to Hilco, and the city tax breaks stem from a “broken, corrupt, racist system,” according to Kim Wasserman, executive director of the Little Village Environmental Justice Organization. The common denominator in these examples is that these neighborhoods are predominantly Black and brown with disproportionate numbers of respiratory illnesses (now compounded with some of the highest COVID-19 case rates in Chicago). The regulatory agencies we count on need more resources to adequately protect these communities and fulfill their mission.
It is no coincidence that these environmental issues plague racially segregated and low-income communities where economic investment is also lacking. Systems must change for there to be environmental justice, which is inherently racial and economic justice. To illustrate this point further, Ibram X. Kendi describes one pervading system in need of change in his book, How to Be an Antiracist:
“They define capitalism as the freedom to exploit people into economic ruin; the freedom to assassinate unions; the freedom to prey on unprotected consumers, workers, and environments; the freedom to value quarterly profits over climate change; the freedom to undermine small businesses and cushion corporations; the freedom from competition; the freedom not to pay taxes; the freedom to heave the tax burden onto the middle and lower classes; the freedom to commodify everything and everyone; the freedom to keep poor people poor and middle-income people struggling…”
It is as if Kendi made these observations here in Illinois. The institutions that he mentions have been hollowed out for decades, in large part, because of poor income tax policy decisions. However, we have the opportunity this November to change that trajectory for the better!
By now, most people have heard of the Fair Tax Amendment that is on this year’s ballot. Labor unions, environmental groups, and small businesses overwhelmingly support a Fair Tax (also known as a graduated or progressive tax) across the state. Additionally, people of faith, the League of Women Voters, the Illinois Education Association, the Illinois Federation of Teachers, the Chicago Teachers Union, and AARP have expressed support for a Fair Tax. By adopting this constitutional amendment, Illinois would join the 30-plus states and federal government that already use a graduated tax system. The General Assembly has passed new tax rates that would go into effect January 1, 2021 with passage of the Fair Tax Amendment. These new rates benefit 97% of Illinoisans.
Opponents of a graduated tax have suggested that this amendment is merely a blank check for state politicians to raise taxes in the future. But with a graduated income tax, only the top 3% of earners would see an increase in taxes, making it easier to fill current and future budget gaps without increasing taxes on low- and middle-income earners. A graduated tax system “right-sizes” income inequality and racial wealth gaps by lifting some of the burden on low- and middle-income earners. Perhaps most importantly, the immediate impact of a graduated tax would be the dollars put back into the pockets of low-income earners. Furthermore, essential agencies, like the IEPA and DNR, that protect Illinois’s waterways, air, and land would begin to benefit from increased budgets.
Adopting a graduated tax system is a step in the right direction. Another way that policymakers can move Illinois towards a more just and equitable economy is by passing CEJA, or the Clean Energy Jobs Act. CEJA comprises nine focus areas: an equitable workforce, energy access and solar for all, renewable energy, energy efficiency, capacity market reform, carbon-free power, electric transportation, support for fossil fuel workers and communities, and utility accountability. This piece of legislation will accomplish these goals with a combination of fees on fossil-fuel pollution, severance fees on coal extraction, savings from capacity market reforms, and payments by ratepayers. CEJA already has broad support across the state; a recent poll found support of more than 70% in three urban, suburban, and farming districts, with the strongest support among African Americans. If CEJA — or some form of clean energy legislation — passes the state legislature by the end of the year, environmental issues would gain top priority, and Illinois could start “to recover from the pandemic, stimulate the economy, and create jobs without . . . spending scarce state revenue, hiking electric bills, or bailing out Exelon, utilities, or fossil-fuel companies.” The projected $3 billion/year in additional Fair Tax revenue could offer even more funding for programs like those in CEJA, which would in turn “bring in more than $30 billion in new private investment to Illinois by 2030.” Environmental groups like 350 Chicago will then have more leverage to advocate for adequate allocation of funds to the IEPA, DNR, and clean energy workforce programs. To me, this not only sounds like new jobs and healthier communities, but justice and fairness for all Illinoisans.
Nothing is more fundamentally important to Illinoisans than clean water, air, and soil. By voting YES for the Fair Tax Amendment, you as a voter are prioritizing the health and well-being of our state’s diverse communities, regional biodiversity, and environment. It is time for Illinois to have a modern, 21st century tax system that works for all. It is time for fairness in our communities, our city, and our state.