The editors of the Wall Street Journal report the latest in Illinois’s ongoing soap opera:
On Tuesday evening the Governor with the worst job in America explained why he and his fellow Republicans have offered to raise taxes for the sake of ending a multiyear budget impasse with Democrats. He said he’ll accept a four-year increase in the flat state income tax to 4.95% from the current 3.75%, expand the sales tax and implement a cable and satellite TV tax.
This is a political defeat by any definition since Mr. Rauner campaigned on lowering the income tax to 3%, not on restoring the rate close to what it was under the last Democratic Governor. The “temporary†5% rate partially sunset in December 2014. Democrats who run the legislature refused to negotiate over a budget unless Mr. Rauner agreed to a tax increase, and now they’re refusing to make notable spending or economic reforms in return.
Mr. Rauner is also proposing to freeze property taxes and says the deal will reduce the state’s backlog of unpaid bills by at least $4 billion. The property-tax freeze could provide some election contrast with Democrats. But a freeze isn’t a reduction from already sky-high property levies, and the current backlog of unpaid state bills is $15.1 billion.
The bigger problem is that his proposed deal includes almost none of the reforms Illinois desperately needs to compete with neighboring states and repair its fisc. It includes nothing on right-to-work and little workers’ compensation reform. It doesn’t give local governments the collective-bargaining reforms they need and it fails to solve the state’s $130 billion or so in unfunded pension liabilities.
Rauner’s opposition to the “temporary” 5% income tax rate was largely responsible for his election in the first place. Assuming he runs for re-election, I think this move dooms his chances and along with them any likelihood of Illinois’s dealing with the problems that got us into the fix we’re in. They predated his governorship and the legislature has done exactly nothing to change Illinois’s downward course.
Perhaps I should start a pool on how many Illinoisans there will be in 2020 when the next decennial census is taken. I’m guessing we won’t be the fifth most populous state any more.