WSJ Profile of Bruce Rauner

This morning the Wall Street Journal profiles Illinois Gov. Bruce Rauner. After a lengthy build-up here’s the meat of the WSJ’s interview:

We meet on a Sunday morning in the state’s downtown Chicago offices, a sprawling red and gray modernist complex called the Thompson Center. The building is locked and dark, but Mr. Rauner, sitting in a government-issue barrel back chair, is smartly dressed in a business suit and striped tie.

His confidence that his agenda will not stall in the legislature comes in many parts. “I’ve got a very good working relationship with Democratic leaders in the state,” he says. “Number one, I’ve worked very hard on personal relationship-building. There’s mutual respect. There’s mutual trust that has not existed from prior governors.” Unlike his predecessors, Mr. Rauner, a Chicagoan born on the city’s north side, near Wrigley Field, is living in downstate Springfield.

Second, though Illinois is a deep-blue state, Mr. Rauner feels he has a mandate. He won every area of the state except urban Cook County, and he says even liberals see the need to cut spending and reform the bloated pension system. “Everywhere I go, people run up to me and say, ‘I’m a Democrat. You’re saying stuff that needs to be said. Hang in there,’ ” he says. “See, my wife is a Democrat. She’s troubled . . . because every dollar that gets spent beyond what’s really necessary—and it’s in a special insider deal—every dollar is a dollar that can’t go to help a truly disadvantaged person.”

Third, the budget mess is so acute, Mr. Rauner says, that the legislature simply must act. Here the governor does something that might surprise: He quotes Rahm Emanuel, Chicago’s Democratic mayor and President Obama ’s former chief of staff. “Who was it that said, ‘Never let a crisis go to waste’?” Mr. Rauner asks. “It creates the opportunity to bring people together to do things that they might otherwise not be inclined to do.”

That doesn’t mean the governor’s proposals have landed without controversy. One involves changing the future pensions of government employees, who would very much like to keep the generous current terms. Under Mr. Rauner’s plan, benefits for current retirees would be maintained, but today’s workers would be given the option of a buyout—a lump sum that the state would deposit into a new 401(k)-style account. Employees who don’t take the buyout would have future benefits modestly reduced, though the portion of their pensions that has already been earned would be protected.

Democrats and unions say the proposal violates language in the Illinois Constitution that ensures public pensions “shall not be diminished or impaired.” But the governor says that the restriction doesn’t prevent creating a new additional pension system for the future. “I love the pressure I’m putting on them. We’re going to pass that,” he says. “It’s common sense and it’s totally constitutional.”

The state Supreme Court might decide otherwise. This month justices will hear arguments on whether a 2013 law cutting retirees’ annual cost-of-living adjustments passes constitutional muster. Whatever the justices decide, Mr. Rauner says, his plan will go forward, even if he has to pass a constitutional amendment by referendum to allow the changes. “I don’t have a Plan B,” he says. “I have a Plan A.”

Equally controversial have been the governor’s plans to reform government-union rules. A full 93% of the state’s government workers are unionized (the highest rate in the country, Mr. Rauner notes), guaranteeing a stream of dues money to Democratic politicians. “Everywhere I look inside state government, the unions have been running the process, dictating the terms, setting the work rules and setting the agenda inside government,” Mr. Rauner says. “The taxpayers, school children, businesses, homeowners, small business owners have been abused and left out of the process.”

One of his first moves was signing an executive order banning public unions from collecting mandatory fees from workers who don’t want to join the union. Federal courts will ultimately determine the constitutionality of the move, so the governor then filed a lawsuit arguing that the fees violate workers’ First Amendment rights to freedom of speech and association. The suit will probably take years to wend through the legal system, but it is aimed squarely at overturning the U.S. Supreme Court’s precedent in the 1977 case Abood v. Detroit Board of Education.

Mr. Rauner has also proposed banning campaign contributions from government unions. “It’s already illegal today in Illinois for businesses or individuals who contract with the state to make campaign contributions to state politicians,” he says, but “it’s perfectly legal for government union leaders. Why?” Given that the proposal might spook legislators who rely on union contributions to get elected, Mr. Rauner wants to offer an alternative source of money. He has set up a $20 million political-action committee—funded by Mr. Rauner, businessman Dick Ulein and Citadel CEO Ken Griffin —to back politicians who side with the governor when his budget reforms head to the Statehouse. The implied threat is that legislators who don’t may face well-funded challengers.

His reform proposals have earned Mr. Rauner comparison to Wisconsin Gov. Scott Walker, who in 2011 pushed through limits on public-union collective bargaining. Mr. Rauner hasn’t gone that far for state workers, but he has offered a plan to let local voters determine what the workers they employ can and can’t bargain for. “I want them to decide if they want forced unionization in their government entities and their schools,” he says.

Mr. Rauner also wants to let local governments decide on what would essentially be local right-to-work zones. Illinois is surrounded by right-to-work states, including Indiana, Michigan and Iowa. Wisconsin passed its own right-to-work law on Friday and Mr. Walker’s office has said he will sign it on Monday. Mr. Rauner says Illinois needs to take comparable action to remain competitive.

“Illinois, we’re the heart of the Midwest, we’re the economic muscle of the Midwest, and we’re sitting here with closed-shop restrictions,” he says. “If DuPage County wants to have closed shop in their county, keep it—terrific, no problem. But why should DuPage force Effingham County to be closed shop? If Effingham wants to compete with Indiana for a new business, and be on the list where companies will look for employment flexibility, why shouldn’t they be able to choose to do that?”

As the state’s annual budget debate gets under way, Democrats are pushing for tax hikes. Some of the legislators want higher fuel taxes. Michael Madigan, speaker of the state House of Representatives, is pushing for a 3% surcharge on millionaires. “Talk about a flow of job creators leaving the state if they put that in,” Mr. Rauner says.

The governor’s budget included no new taxes, but Mr. Rauner has said he would be open to broadening the state sales tax to include services such as haircuts and auto repairs that are now exempt. But the biggest—and first—priority, he insists, must be to change the way Illinois does business. “We’ve got massive debt, massive deficits, high unemployment,” he says. “People think, ‘just raise the income-tax rate.’ Guys, that is not going to fix our problem. We’ve gotta grow.”

I think I’ve told the story before about the prominent Chicago tax attorney, the father of a parishioner and member of the church council, who, after looking at the books of the church I was attending at the time, gave a one sentence pronouncement: “You’ve got to sell more.” That’s essentially Bruce Rauner’s prescription for Illinois.

If I were a betting man, I’d bet against Gov. Rauner’s succeeding in his plans. That’s not to say that I think that Illinois is beyond reform or that fighting Rauner for every inch is what the Illinois legislature should do. I think that if Illinois is to recover from its present funk it must reform and it must reform in the directions in which Gov. Rauner is pointing. I think that Mike Madigan and John Cullerton should put up some show of opposition but largely cooperate with the governor, then blame him for the choices that are made. This is a great time for Illinois to have a one-term reform governor.