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Wednesday, Feb. 15, 2006 09:08 pm

Illinois, poverty capital of the Midwest

Smoke-and-mirrors budgeting sends lives up in smoke

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There is an air of unreality to the progressive but dishonest state budget proposed this week by Gov. Rod Blagojevich. It is hard to object to “Preschool for All,” the governor’s proposal to allow all 3- and 4-year-olds to enroll in state-funded preschools, and the big election-year capital spending program will buy some needed improvements. But nobody can be very happy about the governor’s budget, because the money for these new programs will come, not from economic growth or responsible taxation, but from borrowing, gambling, and various other get-by gimmicks. This is not a tax-and-spend governor but a no-tax-but-spend-anyway governor. Most disappointing is that his strategy will probably get him reelected. There is a larger picture, asking for a larger leader. The poverty rate in Illinois is the worst in the Midwest, according to the nonprofit Heartland Alliance, in a report released this month [see Joan Villa, “State of the poor,” Feb. 2]. Since the group’s first Report on Illinois Poverty six years ago, 342,716 more Illinoisans are in poverty. The rate has gone from 10 percent in 1999 to 12.4 percent in 2004. More than 1.5 million Illinoisans live in poverty, and more than a third of them are children. “Most of us think of Illinois as the economic engine of the Midwest,” says Sid Mohn, president of the Heartland Alliance, “but, according to these indicators, our engine is running out of steam.” Though it is one of the richest states in the eight-state region, Illinois ranks worst in the Midwest on overall poverty, child poverty, employment outlook, the number of uninsured people, homeownership, and the school-achievement gap. Some of this results from a sluggish national economy, failed federal policies, and a shift from manufacturing to service jobs. But, as the report says, “Illinois has yet to make the comprehensive changes that will usher in a future where Illinoisans live free from poverty.” As long as the state relies for its revenue on a flat-rate income tax, and refuses to increase it, there will never be enough money to fund schools and the social-service programs that are needed to lift people out of poverty. According to the poverty report, “Illinois ranks worst in the nation for the percentage of revenue that public schools receive from the state.” For the 2003-2004 school year, Illinois paid only 30.4 percent of school costs; the national average was 48 percent. “Amid growing need, crucial services for the poor are being eroded by the Illinois state budget crisis,” the report says. “For the past four years, Illinois has struggled to balance the budget due to deficits of more than $1 billion. Such deficits, resulting annually from Illinois’ structural deficit, are severely impacting programs critical to the well-being of Illinois’ most vulnerable, including children, seniors, and families struggling to make ends meet.” Although the group applauds the governor’s “All Kids” health-insurance program, which begins July 1, it notes that over the past decade there has been a steady erosion in the state’s overall investment in human services. Shiny new programs lose luster when they come at the expense of emergency assistance, crisis nurseries, children’s assistance programs, and employability services. “Our budgeting process is in serious danger of not being functional in the future,” Mohn says. Lurking behind the statistics on low wages and incomes is another form of poverty that is rarely recognized in Illinois. The report calls attention to “asset poverty,” which makes life precarious for more than one of five Illinoisans: “It is a person’s assets — a home, a savings account, a retirement account, or even a college degree — that provide the foundation for solid economic standing.” For those who have them, assets are available to help weather an economic storm. But many families in Illinois have negative net worth — they owe more than they own. For most households, the family home is the biggest asset. But Illinois has the lowest rate of homeownership in the Midwest, and the rate is worse among minorities (50 percent) than whites (77 percent). Asset-poor families don’t have the means to survive a crisis. Never has it been more important for Illinoisans of goodwill to unite in common concern for the poor. Politics can take a better turn. Policies can be more humane. This state can take pride in itself again — if it changes course.
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