Editor’s note: Following are selected portions of a letter from NIU President John LaTourette to Lester W. Brann, Jr., President, Illinois State Chamber of Commerce

… Since Governor Thompson has already responded to your contention that natural revenue growth will be sufficient to allow the State to meet its obligations and since I have no reason to doubt the Governor’s figures … I will not pursue that argument here. Instead, I will assume that we are discussing the allocation of a fixed amount of money—albeit an amount already reduced by the real effects of inflation. The Chamber believes education’s needs can be met within that amount, if only the educational community can convince the General Assembly that its claims are more valid than those brought to the table by citizens who care about mental health, child abuse, the prison system, public transportation, day care, the handicapped or the environment.

By setting education and the social service agencies against each other, the Chamber is creating a diversionary skirmish which allows it to argue that the real issue facing the Assembly is one of setting priorities, whereas, in fact, the primary issue confronting the Illinois legislators is an acknowledgement of the real cost of the services Illinois citizens need and deserve. These Services, affected as they are by increases in the cost of commodities, utilities, postage, equipment and personnel, cannot be maintained at adequate levels without increased support. Increased support means increased charges to users—in this case, to Illinois taxpayers.

The Chamber position paper (which, by the way, is largely about elementary and secondary education) claims that research shows that states with higher tax burdens usually have lower rates of economic growth. On the contrary, recent research by the National Governors’ Association shows that business leaders used to think of a favorable business climate as a place where taxes were low. Today, they are looking for a “favorable economic climate” which takes into account a broad range of factors, such as the quality of the public schools and the availability of research facilities and job-training programs. … It does not require a detailed research report, however, to show that states like Mississippi have pursued industry with low taxes and low wages only to see their gains quickly lost to overseas competition. States like those in the Northeast, on the other hand, have invested systematically in education and basic infrastructure improvements and are now reaping the benefits of high technology development.

Those who seek a broad-based tax increase for education to support economic development are not asking Illinois citizens to pay more. Rather, they are asking citizens to make their payments one way rather than another. Citizens can agree to an income tax increase and pay according to earning capacity, or they can reject that option and pay in the form of higher local property taxes, stunted economic development and higher unemployment and public assistance. In other words, Mr. Brann, there are no free lunches.

Finally, you have been quoted in recent press stories as having told the Governor that when companies “run into hard times,” they “cut back on spending wherever possible, lay off people, freeze wages, economize and improve efficiencies wherever possible.” In my view, this is a misleading analogy and an irresponsible statement. Illinois is not a depressed state. It ranks 9th in per capita income; its citizens face the lowest personal income tax rate in the Midwest and they are now pocketing over $1 billion per year, made available through tax reductions enacted in the early 1980s. That money used to pay for state services. That it is no longer available suggests to me that the State of Illinois has already cut back on spending.

In the case of higher education, in particular, it can hardly be said that we have “run into hard times.” Demand for higher education is up; students are being turned away. What business would “cut back on spending” as demand for its product rose? What business would “lay off people” as clients flocked to its doors? How many businesses could produce 20 percent more output with 20 percent fewer resources? That is the situation in which Illinois higher education is operating today. That situation is tragic. It is unnecessary, and we are going to be paying for it in lost development for years to come. …

John E. LaTourette

President