Federal budget woes and lessons from the states

Suddenly, every politician seems to agree that inequality, or, the need for greater opportunity, is a problem in America.  The president made this the centerpiece of his State of the Union speech, and then followed up with a mini-tour to promote his "opportunity agenda." Rep. Paul Ryan (R-Wis.) now speaks of making "equality of opportunity" a priority. 

But Washington D.C. doesn’t have — or refuses to acknowledge —solutions that will really get us there.  They need look no further than their home states for some great ideas, and to the grassroots organizations that are leading the way.   

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While politicians paid for by America’s most powerful corporations have handed over another budget deal in Washington that asks for sacrifice from everyone except our nation’s profitable and prospering corporations, ordinary Americans across the country are demanding that their local and state government budgets make corporations and the wealthy pay their fair share.   At a time when corporations continue to make obscene profits while workers see their wages stagnate or decline, we should be ending corporate loopholes and tax dodging instead of balancing public budgets on the backs of the poor. 

Consider Iowa, the literal and metaphorical heartland of America, which is facing an $88.8 million shortfall in Fiscal Year 2015.  This hole is the direct result of Governor Terry Branstad's new corporate property tax cuts that will cost the state $135.9 million in 2015, $277 million the following year and ultimately $380 million per year down the road. Much of these additional tax breaks go to big businesses that already dodge income tax from sales generated in the state and receive a “research and development tax credit” so large that they end up receiving a tax rebate check from the state government rather than paying any actual taxes.  The last thing corporations need is more handouts from the people of Iowa.  It’s also the last thing the people of Iowa can afford. 

On the day that Gov. Branstad delivered his State of the State address, 200 members of Iowa Citizens for Community Improvement went out in the dead of winter to press for their own “People First Iowa” budget.  The group, which has more than 3500 members across the State, simply wants the government to raise new revenues from corporations doing well in this economy instead of making cuts that will hurt already struggling middle class and poor Iowans.  The “People First Iowa” proposals include raising the minimum wage, closing corporate tax loopholes, ending tax breaks that favor environmentally destructive factory farms over family farms and passing a corporate tax transparency law.  These are simple, popular reforms that put the needs of people over the needs of corporations. 

Recently, well over 2,400 members of Illinois and Indiana Regional Organizing Netowork (IIRON) and The People’s Lobby gathered in Illinois to support legislation that would make that state’s corporate tax code more fair and transparent.  In that state, IIRON members are looking to pass bills in the city of Chicago as well as statewide that would require corporations to publicly disclose just how much they are – and are not paying in taxes to the state.  

And in Maine, Minnesota, New York, Colorado, Kansas and New Mexico, community groups are running similar campaigns building momentum for economic justice and fairness in which public budgets support working Americans who are still recovering from the economic crisis, rather than giving taxpayer handouts to profitable corporations.  These diverse coalitions are moving city and municipal legislation and running statewide campaigns to end tax breaks that favor the wealthy and corporations and instead stabilize local economies and invest in communities.

The vision of these ordinary Americans coming together for community action on state budgets is in stark contrast to Republicans and Democrats in Washington who, if they agree nothing else, believe that federal budget woes must be solved by cutting spending.  But in places like Iowa and Illinois and Kansas and Maine, ordinary Americans who have watched their political figures pass tax cut after tax cut for corporations and the wealthy have had enough.  They know that we have a revenue crisis in America.  We would have more money to spend on improving our schools and fixing our roads and bridges, all while creating good jobs, if we hadn’t taken public money away from middle class taxpayers and handed it to already-wildly profitable mega corporations. 

Members of both parties are serving the priorities of already wildly profitable corporations over the need of everyday Americans.  But instinctive fairness courses through the veins of the American people.  And their blood is starting to boil.  Americans want government to work for the people, not corporations.  If politicians don’t start to take note, this bottom up movement will only grow.

Goehl is the executive director of National People's Action, a nationwide network of grassroots organizations advancing economic and racial justice. @GeorgeGoehl