Indeed, Illinois leads the nation in revenue lost through several of the tax breaks, according to a report from Good Jobs First and Make Wall Street Pay Illinois.

The biggest loophole is the accelerated depreciation deduction, which costs the state more than $1 billion over three years – far more than any other state, according to the report.

The Illinois deduction is based on a tax break granted by the federal government, designed to encourage capital investment by allowing companies to write off new equipment immediately rather than over its expected lifespan.  Most states have “decoupled” from the federal measure.

“Forgoing revenue in the short term to help stimulate the economy is possible for the federal government because it is allowed to run a deficit,” according to the report.  “But for the states, with their balanced-budget requirements, such revenue loss during a recession would only force deeper budget cuts.”

Small businesses are covered by a separate deduction and wouldn’t be affected by decoupling, the groups say.  Decoupling from the accelerated depreciation deduction has been advocated by the Center for Tax and Budget Accountability (see Newstips from 2008 and 2011).

A break for Wal-Mart

Illinois could bring in $115 million a year by eliminating the sales tax “vendor discount,” a relic of the pre-computer age that gives retailers a portion of sales tax revenues to cover handling costs.  The groups estimate that Wal-Mart took in nearly $10 million from sales taxes paid by Illinois shoppers last year.

The state loses at least $63 million a year by using the single sales factor, which eliminates corporations’ taxable property and payroll share as factors in figuring income tax bills, instead using only their in-state sales.  Large manufacturers lobbied for the loophole, arguing it would create manufacturing jobs.  It hasn’t.

The formula can reduce the tax rate of Illinois-based corporations with significant production, payrolls, and property holdings here  but mostly out-of-state sales by 80 or 90 percent.

“We expect that the governor and general assembly will adopt a budget that protects revenue sources and provides for the educational, health care and infrastructure needs of the people of Illinois,” said Rev. Maggie Pagan-Banks of A Just Harvest, part of Make Wall Street Pay. “While the state is struggling to meet critical obligations to its citizens, it cannot afford to simultaneously subsidize corporate profits.”

At Clawback,Greg LeRoy of Good Jobs First, the report’s co-author, highlights recent layoffs at Sears’ Hoffman Estate headquarters – announced weeks after a $275 million property and income tax break designed to keep Sears here – calling it “the latest evidence that unaccountable tax breaks fail to promote investment for job creation.”

At AUSL, where the Board of Education will vote on six additional turnarounds on Wednesday, it raises questions about unstable school leadership, wildly shifting school policies, and failure to support programs promised in AUSL submissions to CPS.

Largely lost in the coverage of Noble (particularly in the Chicago Tribune’s editorial, once more attacking critics of CPS) was the actual source of concern – the campaign by Voices of Youth in Chicago Education to reduce the dropout rate, which has led them to focus on disciplinary policies which push kids out.

“We agree there should be consequences for minor infractions, but Noble is not doing it the right way, and as a result, students are leaving,” said Emma Tai of VOYCE.  She said Noble has acknowledged that 40 percent of entering students leave before senior year.  (Ben Joravsky has previously reported on Noble’s fines, demerits, counseling out of kids, and charges for make-up courses.)

Bigger picture

But Noble is “just one piece of a much larger picture,” Tai said.  “Whether it’s demerits and fines at Noble or suspensions, expulsions, and arrests at [traditional] schools, there are practices in all our schools to keep students on lockdown and push them out.”

Concern over test scores may be a bigger driver of the approach than concern over safety, she suggests.

“We should be making sure that all schools are putting a full-faith effort into keeping young people in schools,” she said.  “What’s happening in all our schools [reflects] the real failure of our public officials to use our public dollars to make sure every child gets a quality education.”

At Piccolo, parents protesting the proposed turnaround charged that at other turnarounds, “AUSL has not lived up to promises  of increased support for at-risk students” and “AUSL has pushed out students through zero tolerance discipline” as well as “dropping students and counseling out low-performing students.”

One group backing Piccolo, Blocks Together, has worked extensively with students at Orr Academy, now in its third year as an AUSL turnaround school, and they report a variety of practices that seem to conflict with AUSL’s commitments to CPS.

AUSL and the CPS code

In its 2007 RFP submission to CPS prior to being given Orr, AUSL pledged to follow the district’s student code of conduct, to support students with behavioral issues, and to institute a peer mediation program.

Instead, Orr students are routinely given automatic suspensions for minor infractions, BT says.  “We get suspended for the pettiest things,” said Malachi Hoye, an Orr senior active with BT’s youth group.  “Being tardy, not wearing your ID – it’s two days.”  Cursing gets you an automatic two-day suspension.

The CPS code calls for an investigation of an incident with students “afforded the opportunity to respond to the charges.” That doesn’t happen at Orr, BT says.  The code indicates a range of consequences for first-time minor infractions (like inappropriate language), including teacher-student conferences, conferences including parents or administrators, and detention; suspension is reserved for repeat offenses.  That’s not the practice at Orr either, apparently.

“There are no steps, there’s no effort to look at the situation,” said youth organizer Ana Mercado.  She adds that, with constant administrative change at Orr – two principals in three years, and a revolving door for other administrators — disciplinary policies have fluctuated greatly. “The expectations and consequences keep changing on the kids,” she said.

Turning kids away

Orr also “turns kids away when they come to school without their uniform,” said Hoye.  “The tell them don’t come back till you have one.”  (He also complains about steep increases in the price Orr charges for its uniform jersey.)

The CPS code specifies that students who fail to abide by a school’s uniform policy may be barred from extracurricular activities but may not be given suspensions or detensions “or otherwise barred from attending class.”

And while the code requires parents to be informed of punitive measures, Orr got in trouble last year for dropping students without informing them or their parents.

AUSL also promised to institute a peer mediation program, but when BT trained students in restorative justice methods so they could serve as peer jurors, Orr administrators provided little to no suppport.  In the first year, administrators referred six cases to the peer jury; this year they’ve referred none, Mercado said.

“They said they would do it and then they just didn’t do it at all,” said Hoye, who was trained as a juror.  “The administrators are not following through on what they said they were going to do.”

CPS drops the ball

That’s mirrored on a district-scale by CPS, which included restorative justice language in a recent disciplinary code revision, but has failed to “put their dollars where their mouth is,” Tai said.

Last year VOYCE issued a report documenting many tens of millions of dollars spent on zero-tolerance strategies that are “not only ineffective, but counterproductive.”  Restorative justice programs in schools rely on local initiative and must scuffle by on one-year competitive grants, Tai said.

Research is clear that zero-tolerance approaches — and heavy use of suspensions — do not improve school safety or student learning, Tai said.  She points to a recent study by the Consortium on Chicago School Research, which shows that it’s the quality of relationships staff have with students and parents that distinguishes schools where students and teachers report feeling safe.

“In fact, disadvantaged schools with high-quality relationships actually feel safer than advantaged schools with low-quality relationships,” according to the report.  And notably, schools with high suspension rates are less safe than schools in similar neighborhoods with low suspension rates.

The Consortium argues that “emphasis on punitive discipline approaches” is particularly unhelpful with “students who are already less likely to be engaged in school.”  “Schools serving a large number of low-achieving students must make stronger efforts to foster trusting, collaborative relationships with students and their parents.”

Notes Tai:  “When young people are given a five dollar fine for slumping in their seats, or when they’re suspended for a week for trying to calm down a fight, you’re eroding those relationships.”

“You’re forcing students out, and you’re not making schools safer.”

There’s another bottom line, she notes:  The fact that under zero tolerance, black students are given much harsher punishments than white students commiting the same infractions shows there’s something very wrong with the whole approach.

Increased accountability for charters, turnarounds, and other nontraditional schools – and a commitment by CPS to implement restorative justice system-wide – would make schools safer and help the kids who need the most help become better students, she says.  It seems clear – with 11.6 percent of Orr’s students meeting or exceeding expectations, and a steadily-declining attendance rate, now at 66 percent – the status quo isn’t working.

Related:

Students target discipline policies

School discipline reform advances

Mayoral candidates on CPS suspension rates

CPS high suspension rate challenged

Dropout crisis or pushout crisis?

School guards and culture of calm (on Orr)

Backed by Warehouse Workers for Justice  and joined by community supporters, they’ll deliver a complaint to Wal-Mart representatives at the new Wal-Mart Express store in Presidential Towers tomorrow (Thursday, February 16, 12 noon, Monroe and Jefferson).

In November, workers hired by Eclipse Advantage to staff the Wal-Mart warehouse filed suit charging they were paid below minimum wage and shorted on hours.  On December 29, 65 warehouse workers were informed that Eclipse was being replaced and they were out of a job.

On February 1 they filed a federal class-action lawsuit charging Eclipse had violated the federal WARN Act which requires 60 days notice for a mass layoff.   Their lawyers argue that while they were hired by a temporary agency, they were long-term employees (or “permatemps”). They also amended the original lawsuit, charging that they had been fired in retaliation for complaining about wage theft, in violation of state law.

They’re now filing a formal complaint with Wal-Mart charging that its subcontractor violated the company’s code of conduct for suppliers and demanding that workers be hired back and paid the wages they’re owed.

Corrective actions

Earlier, Wal-Mart seemed to suggest that Eclipse was replaced in response to workers’  allegations.

“We hold all of our vendors to high standards, and our expectation is they comply with all applicable laws,” spokesperson Greg Rossiter told WBEZ. “Our vendors, such as Schneider, may take whatever corrective actions may be necessary.”  Schneider manages Wal-Mart’s warehouse and contracted with Eclipse for personnel services.

Warehouse workers aren’t buying that.

“Somebody has to pay these workers the money they are owed,” said Mark Meinster of WWJ.  “If the firing was retaliatory, Wal-Mart has to correct the situation. Just putting these people out on the street is not a solution.”

Schneider manages other Wal-Mart warehouses, and in January a federal judge blocked the firing of 100 workers who had complained about wage violations at a California warehouse managed by Schneider.  California labor inspectors had previously fined a staffing firm hired by Schneider for failing to provide itemized wage statements and shorting workers’ paychecks.

In Chicago tomorrow, workers will be backed by members of Chicago Neighborhoods First, a new coalition of business, labor, environmental and community groups that promotes “community-driven economic development” and corporate accountability.

The group includes community organizations in Austin, Chatham, and Pullman, all neighborhoods where Wal-Mart has built or is building new stores.

“If Wal-Mart wants to be part of Chicago, then Wal-Mart must ensure workers are paid what they are owed and that no retaliation takes place,” said Elce Redmond of the South Austin Coalition.

According to the lawsuit, filed by nine LSC members with backing from the teachers union, CPS has failed to follow requirements in school code that LSCs at schools on probation be provided with plans that specify deficiencies to be corrected and with budgets targetting resources to carry out the plans. (This issue was first discussed here in November.)

According to the Tribune, CPS says they’ve “provided support to these low-performing schools over multiple years to boost student improvement.” Have they?

Tilden High, now slated for a”turnaround” by CPS, has been on probation for eight years. During that time there have been “drastic budget cuts,” amounting to a half-million dollars or more each year, according to LSC member Matthew Johnson, a plaintiff in the lawsuit.

Drastic cuts

The school has lost English teachers, math teachers, a computer lab teacher, a librarian. It’s lost funding for its auto shop and its woodshop – leading some kids to drop out, he said.

Johnson is bitterly disappointed that CPS isn’t using a $5.4 million federal school improvement grant won by Tilden to bring in an outside partner for the school. Instead CPS is holding on to the money, in order to pay itself to replace the school’s entire staff.

Dyett High School, on probation for seven years and set to be phased out, was set up to fail from the start, as Matt Farmer has argued – established in 1999 to take struggling students cast off from King Prep, and seriously destablized with a new set of students when Englewood High was closed in 2005.

Even so, says LSC member Jitu Brown, the school worked with community partners to establish a restorative justice program that produced the largest reduction in violent incidents in any city school – and a college readiness program that produced one of the district’s largest increases in college admissions.

But when private grants supporting the program expired, CPS turned down the LSC’s request to take up the ball, said Brown, who’s also education organizer for the Kenwood Oakland Community Organization.

The school has lost four teachers in the past two years, in addition to its assistant principal and a counselor; there’s now one counselor for 300 students. “When Dyett improves student culture, [CPS doesn't] support the program; when Dyett’s scores start to go up, they take away teachers and counselors,” Brown said.

Probation: remediation or political control?

Probation was intended to be a program of remediation, but critics have long maintained that CPS used it as a political tool to centralize power. It’s pretty clear they haven’t used it to improve educational outcomes.

Parents United for Responsible Education made the case in a 2004 report, which showed that CPS went beyond the provisions of the Illinois School Code regarding probation, using it to take control over school improvement plans and school budgets away from LSCs.

The law limits the school board’s role to identifying deficiencies at the school which must be addressed in the school improvement plan and approving budgets with expenditures targeted to correct those deficiencies, according to the report.

“Few LSCs have ever seen the corrective action plan which is supposed to be guiding schools” to help them get off probation, PURE reported in 2004. That’s exactly what LSC members are saying today. (Ten years ago, CPS stopped attending advisory committee meetings where these concerns were being aired, PURE reported.)

Probation was one of two main methods of getting rid of democratic school governance, according to the report. The other was establishing new schools without LSCs under Renaissance 2010.

That strategy also violated the law, according to PURE. State law required LSCs to remain in place when schools were converted in buildings that had LSCs. PURE and LSC members sued CPS on that issue, but the case was dismissed for lack of standing, and its merits were never considered.

Research has consistently shown that most LSCs function well, that they provide accountability, contribute to academic improvement, raise money and building community partnerships. Significantly, most principals strongly support them. The low-income schools that have shown steady progress over sustained periods have LSCs.

Central office interventions have fallen far short of that record. Renaissance 2010 is recognized as a failure, and very expensive turnarounds have produced results that haven’t matched the hype. The rhetoric about “putting children first” is brilliant but unconvincing.

The old provisions of the school code dealing with probation, like the new provisions on facilities planning, are designed to foster communication and shared responsibility. If CPS has been ignoring its legal mandates – if the district has failed to provide help to struggling schools — it should be held accountable.

And since there’s precious little public accountability under mayoral control and top-down reform, maybe the courts – and the legislature, too — need to step in.

The Woodstock Institute emphasized the significant precedent of requiring banks to write down principals for homeowners who owe more than their homes are worth – an approach lenders have generally avoided taking until now.

The settlement “won’t end the troubles of homeowners” but is a “significant step in the right direction,” said Dory Rand.  She said resources need to be targeted to the hardest-hit communities. She called it “a real victory for homeowners.”

The $1 billion in homeowner relief expected for Illinois “will not suffice to restore all of homeowners’ lost wealth” but “it can potentially turn back the tides of default in hard-hit communities,” she said.

Woodstock estimates that 400,000 Chicago-area homeowners are underwater on their mortgages, together owing nearly $25 billion more than their homes are worth.

Rand reiterated Woodstock’s call on the Federal Home Finance Authority to stop blocking Fannie Mae and Freddie Mac from writing down principals in mortgage modifications.

Paltry restitution

In contrast, a coalition of community groups said the settlement “let banks off the hook.”

“Our elected officials completely sold out the people again to their Wall Street friends,” said IIRON, a regional network including Northside POWER and Southsiders Organized for Unity and Liberation.

IIRON emphasized the paltry sums given in restitution to homeowners who lost their homes due to fraudulent foreclosure practices.  They stand to receive up to $2,000 each.

The federal government and state attorney generals “let banks off the hook” for what amounts to “moving costs for families defrauded of their homes by criminal banks,” according to the group.

(“We’ve now set a price for forgery and fabricating loans,” comments Yves Smith at Naked Capitalism.  “It’s $2,000 per loan.  This is a rounding error compared to the chain-of-title problems these systemic practices were designed to circumvent.” Smith gives 12 reasons “why this deal stinks.”)

(“Does a $2,000 check … make up for losing your home because it was foreclosed upon illegally?” asks R.J. Eskow at the Campaign for America’s Future.)

Grassroots pressure

The “flawed settlement” is stronger than it would have been without the pressure of grassroots groups who fought for more relief to homeowners and to ensure that banks aren’t absolved of all legal liability, IIRON said.  The group had called on Attorney General Lisa Madigan not to sign a settlement granting banks broad release from liability, protesting outside a meeting of state AGs at the O’Hare Hilton last month.

The final settlement was closely focused on robo-signing and foreclosure fraud, and it allows investigations to continue into other criminal activity by banks in the housing and financial crash.   It provides some funds for legal aid and housing counseling.

While the settlement includes new standards for mortgage services, including an end to the “dual track” where foreclosure was pursued while loan modifications were in the works, Smith points out that servicers have consistently failed to comply with past consent decrees.

She also points out that the cost of principal reductions will be borne not by the banks themselves but by mortgage investors, including taxpayer-backed Fannie Mae and Freddie Mac along with pension funds.  She calls it a “stealth bailout.”

Call for full investigation

The deal is “suspect on its face” because it was reached before a full investigation into the robo-signing scandal was carried out, said Robert Borosage of CAF.  The state AGs lacked the resources for such an investigation, and the Obama administration  “has been committed to keeping insolvent banks afloat [rather than] holding them accountable.”

The settlement “gets a relatively small sum from the banks in exchange for limited liability on their flagrantly illegal robo-signing,” he said

He called for sustained pressure on the administration for a full investigation of banks, leveraged into serious, broad relief for homeowners

“What’s clear is that the banks trampled the law in their wilding while blowing up the housing bubble,” Borosage said. “They abused homeowners, committed routine forgery and perjury before the courts, and defrauded investors. The housing market then collapsed, leaving homeowners about $700 billion under water.”

The fact that  the settlement allows further investigations — due to insistence by attorney generals in New York, California, and a few other states – ”could be a big deal,” comments Eskow, but only “if the administration stops coddling banks and devotes a lot more resources to helping homeowners and upholding justice.”

Of itemized contributions by individuals to Super PACs in 2010 and 2011, 93 percent came from 726 individuals giving $10,000 or more, and more than half came from just 37 people who gave over a half-million dollars each, according to a new report from Illinois PIRG Education Fund and Demos.

Super PACs are “tools for powerful special interests” that work by “drowning out the voices of ordinary Americans in a sea of sometimes-secret cash,” Velasquez said.

“They undermine core principles of political equality in favor of a bully-based system where the strength of a citizen’s voice depends upon the size of her wallet,” said Adam Lioz of Demos.

Noting that 17 percent of Super PAC money came from businesses, the groups recommend the Illinois General Assembly pass legislation requiring shareholder approval for corporate political spending, among other reforms.

A bonanza for broadcasters

At the Nation, John Nichols and Robert McChesney (co-founders of the media reform group Free Press) detail the cost to democracy — and the bonanza for TV stations.

TV stations will take in up to $5 billion from political advertising this year – nearly twice the $2.8 billion they got four years ago.  The amount being spent on TV ads for House races is up 54 percent since 2008; for Senate races it’s up 75 percent.

Political ads accounted for 1.2 percent of total ad revenue in 1996; this year it’s likely to be 20 percent, and more in key states.

Super PACs specialize in scorched-earth, no-holds-barred negative advertising which actually aims at depressing turnout, and succeeds: research shows “the main consequence of negative ads is that they demobilize citizens and turn them away from electoral politics.”

And, of course, the prospects of a candidacy that doesn’t represent the interests of big-money donors becomes increasingly remote.

Meanwhile, with news staffs cut and much less time devoted to political coverage, TV news increasingly focuses on horse-race and cat-fight aspects.  “Such coverage is cheap and easy to do, and lends itself to gossip and endless chatter, even as it sometimes provides the illusion that serious affairs of state are under scrutiny,” write Nichols and McChesney.  But it is “as nutrition-free as a fast-food hamburger.”

Naturally, the National Association of Broadcasters fights any campaign finance reform that would cut into station revenues, most recently opposing legislation requiring Super PACs to fully disclose their donors.

NAB has also opposed what might be the simplest reform: requiring TV stations to provide free airtime to candidates as a public-service requirement.