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.
Illinois’s fiscal problems are all over the news. They haven’t passed a budget in 3 years, have no money left for discretionary spending, with money management woes extending far beyond the current governor’s reign. What seems to be spiking this financial urgency is the fact the lotto may be leaving! If I were in Rauner’s shoes I would not seek another term, leaving it to the Dems to face and solve.
Living in CA, however, I see the same scenario unfolding in our future. We are governed by a Dem super majority who see no bounds in taxation, foolish agendas, and a plethora of social programs always in their fantasies, including universal healthcare for everyone, without any real considerations as to how to pay for them. Fool’s gold and Dems go together in the manner of how they apease and govern.
There’s a big difference between California and Illinois. For many Californians living anywhere else is unthinkable. That’s encapsulated in a phrase I’ve heard Californians say: “There is no life east of Sepulveda.” They won’t leave unless forced out which is what is happening all too frequently.
That’s just not the case in Illinois. We don’t have climate, scenery, ocean, or mountains. What we have or at least used to have is work. Undermine that and you undermine the state. That’s why Illinois is experiencing not just a net decline in population but an abolute one.
So would it be fair to say that Rauner completely caved and that he got zero quid pro quo? If so, I wonder why he would do that.
Yes, “there is no life east of Sepulveda,” and “Life ends at the Hudson” works, at least in the minds, of two geographic sets of liberals. But it has a limited life as it inevitably ends in untenable income inequality they profess to hate but actually crave, and is no way to organize an entire country.
Jan – Rauner doesn’t consult me, but he may believe his political tenure is short and the problems cannot be solved without the state coming to a halt in a grinding mess. Perhaps a last ditch, or simply for the history books, effort to be the better man. I doubt he worries much about short term political skirmishes. He is a no nonsense PE guy not prone to financial or other wishing. Without bankruptcy I’m not sure you can get there from here. He’s seen a company or two crash and burn. He may have concluded same about IL. He’s Governor, not King.
I agree that CA has a lot of geographical, climate positives going for it. But, it’s politics and money management mirror Illinois in so many ways. Our public sector pensions are killing us, educational policies have been high-jacked by ideology on the left, welfare subsidies are rampant, we’ve basically become a sanctuary state, and while tax revenues are high they are never enough. We still have a superficial sheen, juggled assets, and the tech industry luring people here. But, give us one big earthquake and people will scatter.
Drew, Rauner is a business guy, and will have a life awaiting him after his stint of trying to fiscally improve Illinois. Just in our small business, though, I know how daunting it is to have local government bureaucracies put stones on your business, making it hard and so personally unrewarding that all you want to do is tell them to “shove it.”. I bet Rauner might feel the same way when working with the “good old boys” Democrats.
Oh ….. as a 40 year resident of California, give or take some time in Colorado, I have to say I think the state will survive a bit longer.
That said …. I recall Presidential election of 1960. Which happened in, among other places, the state of Illinois. And interestingly enough, it took a while to count all the ballots back then. Turns out the southern portion of the state pretty much went solidly for Richard Nixon, the Republican candidate, but until those southern Illinois votes were counted, it just wasn’t possible to count the votes in Chicago and its suburbs. But at last the Chicago ballots did get counted and — SURPRISE! — Democrat John Kennedy carried the Chicago area and in fact the whole state. Aren’t elections wonderful?
So time passed, and in 1969 Richard Nixon again ran for President. But alas, there were problems counting the southern Illinois ballots this time. And of course problems in Chicago also. 9 o’clock in the evening and there was no verdict in Illinois. 10 o’clock. 11. 12 midnight. 1 am. And finally when all the networks had gone to bed, proclaiming a Nixon victory elsewhere in our great country, and Illnois’ votes no longer mattered, first Chicago and then downstate Illinois released their totals. Splendid wasn’t it.
You get my point, I trust. Illinois has been a bastion of dysfunctional political partisanship for at least sixty years — and likely longer. The Republican and Democratic politicians are equally corrupt, equally insane, equally worthy of long long long prison terms.
In fact, it often struck me during the last ten years or so that the most damning thing that could be said of Barack Obama was that he had been schooled in Illinois politics. Unfortunately for Republicans, it wasn’t possible to make this point without exposing Republican malfeaseances as well.
Oh well. I’m sorry you’ve got the misfortune of living there, Dave. It’s an attractive state in many ways, and Chicago really does deserve to be one of the world’s leading cities. (I had relatives living thereabouts, once upon a time, and they accepted it as uncritically as Jan thinks most Californians think of living in the Golden State.)
I wish I had something useful to say.
Five of the last eight governors have done time after serving their terms, a record I think.