Governor Rauner advocates bipartisan reforms amid budget gridlock

By Harvard Zhang

Springfield — Republican Governor Bruce Rauner called on the Democrat-controlled legislature to put aside political disagreements to institute business-building reforms together with cost reductions and revenue increases during his budget address Wednesday for the next fiscal year.

Addressing a joint session of the General Assembly, the governor stressed that his budget is about jobs, opportunities and economic growth, while underpinning his support for primary and secondary education.

Protesters from public schools and social services providers crowded the Statehouse to express their opposition to funding cuts and their worries about the future.

Despite the current protracted political deadlock over the current state budget, a stand-alone appropriation bill for early childhood education and K-12 schools will be introduced shortly by Republican leaders in both the House and the Senate, according to the governor. If it’s passed “clean–no games,” he said, he’ll sign it immediately.

“The $393 million this budget proposes investing in early childhood education is the most in state history,” the governor said. “The greatest investment we can make as a community is in our children, and the earlier we begin, the bigger the return.”

Addressing the longer term, the governor said, “let us commit today to working together to enact a reform agenda, alongside a responsible, compassionate budget that together forms a sensible long-term financial future for the state.”

However, he added, “I won’t support new revenue unless we have major structural reforms to grow more jobs and get more value for our taxpayers.”  He mentioned specifically “workers’ compensation reform and lawsuit reform. Mandate relief, consolidation, local control of bargaining and bidding to drive down property taxes.”

The governor said the state has only two options, and the choice must be made now: either cut spending to live within available revenue, or agree on economic and government reforms to achieve a balance of spending reductions and revenue.

The state budget speech in February by the governor traditionally outlines the fiscal blueprint of how to raise and spend money for the next fiscal year that starts July 1. This is the first step in the budget-making process, which is supposed to bear fruit by the end of May.

Yet ideological disagreements on state fiscal planning between the first Republican governor since 2003 and Democratic-controlled legislature has left Illinois eight months into the current fiscal year without a budget. The two sides clashed on how to balance business regulations and worker protections.

Last year Governor Rauner proposed a budget to tighten the state’s belt amid shrinking revenue due to the rollback of temporarily increased individual and corporate income tax rates. The targets included deep cuts to Medicaid and state worker pensions while slashing funds for local governments and transportation agencies. The governor proposed no tax hike.

Democrats, unwilling to do major spending cuts or increase taxes, dismissed the governor’s wish list, and sent to the governor’s table a budget that exceeded projected revenue by more than $4 billion.

Despite nodding his approval of appropriations for elementary and secondary education and Illinois Department of Transportation, the Republican governor turned down the vast majority of the lopsided legislature’s budget and asked for a balanced one. Yet the state of Illinois has no budget for fiscal 2016 to date.

Governor Rauner said people need to change the way they think about budget. “This isn’t a binary choice between program cuts and revenue increases,” he said during the address. “This is about economic growth and opportunity — a more efficient government with more value for taxpayers — a better future for everyone in Illinois.”

Some experts in public economics shared the governor’s vision for the state’s fiscal future, saying structural planning is needed to fix the problem.

“It is not a good idea to pass a budget for next year without a long-term careful structural planning to increase taxes and restrain spending,” said David Merriman, professor in public administration at University of Illinois at Chicago.”This could take years but it is the right thing to do.”

The governor’s speech invited criticism from Democratic legislators, and social service providers and students from public schools including Chicago State University and Northeastern Illinois University voiced their opposition to funding cuts.

“With all due respect to the governor, his budget speeches don’t help Illinois,” John Cullerton, Illinois Senate Democratic President, said in a statement. “I want to work with him to find practical solutions to our problems because nothing Governor Rauner did in his first year worked for anyone.”

Senator Cullerton added he was “troubled by proposals that would appear to return to the days of skipping pension payments and raiding local funds to prop up state spending.”

“I’m sad and disappointed by the governor’s address,” said Mattie Hunter, Democratic Senator of Illinois’ 3rd District. “He should stop blaming everybody and start talking about our social services including our communities and our senior citizens. He should stand up and lead.”

The problem is not an economic or fiscal one but revolves around politics, according to many experts on Illinois state budget issues. They said the issue is about a lack of pressure on elected representatives to act responsibly and make hard choices.

“The nature of the beast here is both parties should reach political compromise to let the government function appropriately,” said Ralph Martire, executive director of Center for Tax and Budget Accountability. “Elected officials should be responsible and do the job that we elected them to do.”

Some professors in public economics called on voters in Illinois to understand better the roles of budgets and the long-term liabilities that we may pass on to future generations in order to hold officials accountable.

“As opinion leaders, we have done an insufficient job at elevating the consciousness of constituents about the importance of budgets, the magnitude of the imbalance, and the harm we are leaving to the younger generations,” Richard Funderburg, a visiting scholar in fiscal policy of the Institute of Government and Public Affairs at University of Illinois, said in an email. “No resident today is going to be happy with the outcome, paying more and receiving less, but we need a budget for our state to grow and prosper into the future.”

Update 2/18/16. The governor’s 2017 budget suggested spending $36.34 billion in the fiscal year starting July 1, which is $3.53 billion more than the projected revenues, documents by the Governor’s Office of Budget and Management showed. Pressured by a projected $4.37 billion deficit by June 30, Governor Rauner wants to save at least $1.76 billion by reforming pensions, criminal justice system, employee health insurance and others.

Photo at top: Illinois public university students and social services providers protested in the Statehouse outside the House of Representatives chamber. (Harvard Zhang/MEDILL)