Gov. Bruce Rauner said Friday the stopgap budget agreement he reached with lawmakers is “a good step in the right direction,” and he predicted the legislature will go along with some of his reform measures during their lame-duck session this winter.
“It was not the long-term solution of a truly balanced budget, with reforms to grow more jobs and protect taxpayers, but it’s a step to get to the ultimate good goal,” the governor said during an interview with the News-Democrat.
Rauner, a Republican, last week reached a deal with the Democrat-majority House and Senate on a stopgap budget that ensures public schools stay open for a year and provides colleges and social services programs money for six months. The agreement brought short-term certainty to the state as it began a new fiscal year.
The deal resolved a months-long budget impasse. But it also meant the state would enter a second fiscal year without a full budget — and the partisan battle over a comprehensive spending plan will likely continue past the November elections.
Here’s an edited transcript of Rauner’s one-on-one interview with the News-Democrat:
Q. What does the stopgap budget do for Illinoisans who rely on the services of the state or state-supported entities, including schools?
A. Last week’s bipartisan stopgap agreement was a good step in the right direction. It was not the long-term solution of a truly balanced budget, with reforms to grow more jobs and protect taxpayers, but it’s a step to get to the ultimate good goal. So we accomplished three things. First, we got a spending level that is much lower than what Speaker Madigan’s majority tried to pass. They tried to jam through a $7 billion, out-of-balance deficit spending plan. We were able to stop that. That would have been completely unaffordable and would have necessitated a big tax hike to fund that. So that was a good victory for taxpayers. And we got spending so that we can have essential public services, essential public safety, corrections, government operations continue to function throughout the next six months. So that's a good step.
Secondly we got schools open on time with an affordable amount of more money. That was a great step forward. Speaker Madigan's majority has cut school funding four times in the last 10 years — they’ve used it as a political football for other agenda items for them. And I said last year I wanted more money for schools and I wanted more money this year. This year we got a full foundation as well as more money for low-income schools through a poverty grant, and we were able to do that without having to bail out the city of Chicago’s schools. Speaker Madigan’s majority was demanding half a billion dollars more to Chicago Public Schools because that’s been so financially mismanaged up there. We said no, that’s not fair to the taxpayers in the metro-east, in Belleville or East St. Louis or Rockford or Decatur or Danville.
We need all schools to get some more money on a proportionate basis, Chicago shouldn’t get special treatment, and we were victorious in that outcome. Chicago is getting a little bit more money, but all school districts are getting more money on a proportionate basis. So that’s good for teachers, students, and we protected taxpayers. And then the third accomplishment from the agreement is that we got pension reform front-and-center on the table with incentives for Speaker Madigan’s majority to vote for pension reform. They don’t want to vote for pension reform, but we passed a bipartisan pension parity bill for teachers’ pensions, and it will only become law if we reform pensions in the state of Illinois on an affordable basis. We can save the taxpayers billions of dollars, and we have an agreement that that will happen by January, so that was a great step forward for taxpayers as well.
Q. For the voters who elected you in the hope you would reform state government or improve the state’s fiscal condition or improve Illinois’ economy, what’s in it for them?
A. We haven’t quite gotten where we need to go yet, but we are going to stay strong and stay persistent. As I travel around Illinois, here in the metro-east and everywhere around the state, people come up to me and say, ‘Governor, you’re on the right track, don’t back down, don’t give in, stay strong.’ We are going to stay persistent. We got this stopgap spending plan done because we were finally able to persuade a significant number of Democrats who normally would just do what speaker Madigan directs. They were willing to stand up and say we need reforms, we support much of the governor’s proposals to fix our economy. The bipartisan working groups were about to announce some major reforms for a worker’s comp cost reduction, for pension reform, for local control to bring down property taxes.
Speaker Madigan said, ‘Don’t announce that yet, let’s wait and vote on those issues after the election.’ You’re an observer of our state government, you know that the big votes, the big changes, happen generally in the lame-duck session after general elections. And that’s what the speaker wants to do again. I personally don't agree with that, I think we should do our jobs now, it shouldn’t wait until after the election, we should vote now on reforms. But I’ve got to deal with the cards I’m dealt. Speaker Madigan has the supermajority, so we’ve got to manage as best we can.
The critical issues in Illinois is, we’ve been going down the wrong road for a long time, we’ve been losing jobs. We have fewer jobs than we had 17 years ago. We have lower family incomes than we had 17 years ago. We now have the highest property taxes in America, and the most debt — unfunded pensions and bonds — of any state in America. We are in a bad condition, and this has gone on for 30 years. Speaker Madigan has controlled the General Assembly spending for more than 30 years, and prior to my becoming governor, we had two governors in office who were in the same political party as the speaker, and they were competing with each other to see who could spend more and create more deficits. We’re bringing an end to that mismanagement and that corruption and cronyism. So, we’ve said to change the direction, we need to do three fundamental types of things. We need political reform, we need economic reform and we need government reform. We need those three reforms.
Political reform is essential — in some ways it’s the most important. Democracy is not working in Illinois. We have a rigged system where we basically have been a one-party state. Democracy doesn’t work on a one-party basis. We’ve had Speaker Madigan with complete control of the General Assembly for more than 30 years, and we have had a governor of the same party for a long time. And they’ve spent us into the brink of insolvency. And your readers may be interested...here this November in the election, in two-thirds of the state races, there’s no opponent — there’s one person running. We have a rigged system. There’s no competition, there’s no choice for voters. Democracy doesn’t work on that basis. We need competition and we need choices for voters for the people of the state. So, we’re asking for two types of reform: redistricting reform, so that we can have competitive elections and we don’t have gerrymandered districts, and that’s overwhelmingly supported by the people of Illinois — Democrats and Republicans. This is popular and it’s the right thing to do. Unfortunately, Speaker Madigan has his lawyer in court trying to block the voter referendum on redistricting and fair map. I hope we can prevail in court. I’m asking the General Assembly to…pass redistricting reforms themselves. So far I haven’t succeeded in that, but we need that referendum to pass. The second thing is we need term limits on elected officials. We in Illinois have suffered, where many people in power get consolidated power, they make more money from their office, and they’re in power for decades. It’s not right. Government should be public service. We should work for a few years and leave office. I’m going to term-limit myself at eight years. I think that everybody should serve no more than eight years. We tried to get this on the ballot two years ago — I led that effort, we collected the signatures. Speaker Madigan sued us in court, and he won in court, unfortunately, and the outcome of that judicial decision is that basically these members of the General Assembly have to pass term limits themselves to get it on the ballot. So we’re going to put a big initiative on, we need your readers to know. We need to put pressure on members of the General Assembly to vote to get term limits on the ballot. Let the voters decide themselves. Let people decide whether they want term limits or not to help restore democracy.
Secondly, government reform. That’s reform our pension system, so it’s more affordable, but we need to protect the pensions of our hard-working state employees and local government employees, our police and firefighters. We should not reduce their historically accrued benefits, that’s not fair. But for future work, for current employees and future ones, we should have other more affordable plans that they can choose among, that would save taxpayers money. If we do that, we can save taxpayers billions of dollars and restore economic vitality for the state.
The other thing that we need to do is get more local control of the costs of government. Right now, Springfield puts all kinds of mandates on local governments, school districts, cities, counties. Springfield controls what can be bargained, how competitive bidding is done, how outside contracting is done. It should be up to each community. Communities that like the current system should keep it. If they need to change it, they should be empowered to change it. Local residents should have that power. That could bring down our property taxes, which are the highest in America. We need to bring them down.
And then the final change, we need economic reform to grow more jobs. We should be one of the fastest-growing states in America, but our regulations are hostile to business and we’ve been losing our jobs. Caterpillar told me that the worker’s comp system in Illinois is so broken, that — they’re one of the best employers in America — they told us that worker’s comp in Illinois costs five times as much as in the other states that they build their equipment in around America. And they’ve been moving their jobs from Illinois for yeas. And they’re not alone. Manufactures all over Illinois have been leaving because of worker’s comp costs. And worker’s comp could not only bring more employers back by making us competitive but it could save hundreds of millions of dollars for taxpayers because worker’s comp costs are very high inside government as well as in business. So worker’s comp reform is the No. 1 priority that we have to change to bring more jobs back to Illinois.
If we do these things, we can have a long-term, balanced budget. Many times, Speaker Madigan’s majority in the General Assembly says, ‘Governor, give up on reforms, don’t do that, just pass a budget. We’ll do reforms later.’ We’ll never have a balanced budget without reforms. And here’s a simple fact for your readers to know. If the economy doesn’t grow as fast as government spending, we’ll always have deficits, or we’ll always have higher taxes. That’s just mathematically true. And Illinois’ economy has been flat-lining for years. We’re one of the lowest-growing states in America, while our government spending has been going up astronomically. The real issue is, if we had just been growing at the nation’s average — just average growth among all the states, not one of the top 10 growers like we could be, but if we just grew at the nation’s average over the last 15 years — today we would not have a budget deficit, we would not have needed any tax rate hikes, we would not have any unpaid bills and we would have $13 billion more in the state treasury to fund our human services, to fund our school and our universities, and to give a tax rebate to our hard-working families. Economic growth is the key, and the reforms we’re advocating are key to that economic growth.
Q. What makes you think we won’t be back in another budget stalemate or impasse situation six months from now?
A. The reason I’m optimistic is not because Speaker Madigan has changed. He’s not, he’s entrenched, he’s been the most powerful politician in Illinois for 35 years. He’s not changing. But we’re starting to convince members of his caucus to stand up to him and not just do what he tells them. We had bipartisan working groups going all year long, that we encouraged to work separate form me and separate from the speaker. They were coming up with bipartisan compromises on worker’s comp, on pensions, on local control, and they were about to announce some breakthrough agreements, but Speaker Madigan said no, don’t announce those, don’t agree to those yet, wait until after the general election. And then we all came to an agreement that those votes will happen after the general election. My concern is, this election now really matters. It’s hugely important. The fact is, if Speaker Madigan gets more power —he’s already got a supermajority — if he keeps that or extends that power, the odds of getting reforms done go down, and his power is just accelerated, and it would be — heaven forbid — I mean it would put taxpayers and small business owners in a tough place. The flip side is, if there’s more balance created, if the people in Illinois support reformers and support reform, and there’s more balance in the General Assembly where both parties have a more equal voice, I think we can get some great things done: bipartisan compromise, and good reforms to grow the economy and improve the family incomes in Illinois.
Q. You’ve said you’d be open to an increase in the state income tax in order to have a balanced budget. Is there any ceiling that you wouldn’t go beyond?
A. Well, I’m an anti-tax guy. I frankly would not want to increase any tax. I’d like to work them down over time. What I will work down over time is the property tax. That’s our No. 1 most uncompetitive tax, and that’s what our reforms are designed to do — bring down our property taxes. That said, in the spirit of compromise with Speaker Madigan and his majority, I’ve said I’m willing to consider some new revenues. I will consider that. I’m open to it, but only in the context of reforms to protect our homeowners from more property tax hikes and only where we make ourselves more competitive. We have got to grow our tax base, we have got to grow more jobs. Illinois is flat-lining on economic performance. We’ll never have balanced budgets if we don’t reform. So I’ve said I’ll look at some new taxes, I’ll consider that, but only taxes where we can stay competitive and increase our competitiveness and bring more jobs to Illinois.
Q. You’ve boasted that your administration has cut $800 million in “wasteful spending.” Those cuts include Medicaid, child care, State Police vehicles, coal programs and agriculture programs. Do you consider those wasteful?
A. Well, we’ve got even another $700 million that we can cut. We have got to make government balanced and working for the people again, and we’ve been spending beyond what we can afford for decades. It’s just not sustainable. No family in Illinois could keep spending what they don’t have, like Illinois’ government. Government’s got to work for the people. We have cut $800 million out of unnecessary spending.
Two things I’m very proud of: We are now modernizing our IT system. We in Illinois, many of the departments don’t even have computers. We’re living in the stone age. I walked into one department in my first week — second week in office actually. Two-hundred people were in a room with paper applications on their desks, and no computers. I said, this doesn’t look efficient. I found out, we could spend half a million dollars on a computer system —half a million — and save $7 million per year. That’s going on all over the government. We are saving hundreds of millions of dollars by modernizing our IT. We’ve either got to move away from paper, or, in some departments we have computers but we’re running software from 1974. I mean, that was a great year, that’s when I got out of high school, but software changed a lot in the last 40-50 years. We can have productivity changes by modernizing.
And the other thing I’m very proud of…we have put in new labor contracts with 18 of the unions that work in state government. That’s transformative. We have the highest-paid state employes in America, which, you know, we can debate. I’m proud, we’ve got great workers, and I want them to be well-paid, but they want $3 billion more than what they’re receiving now, based on seniority. We said no, that’s not affordable, that’s not fair to our taxpayers. But we said we’ll pay bonuses, we will pay you more. We’ll leave salaries flat, but we’ll pay bonuses, but let’s do it based on productivity. Let’s have a bonus based on a percentage of what you save taxpayers. Save a taxpayer a dollar, we’ll give you 10 cents of that dollar. And yo know what? A lot of employees have said, ‘Yeah, I know how to save money.’ That’s a win-win for the employees and the taxpayers. Eighteen unions have signed up for that deal. That’s transformative for Illinois, it’s saving us a lot of money. The bad news is, the largest union, so far, the leaders have said no to that. Their members, I think, they would ratify that new proposal if it could get to a vote. The leaders so far have said no. But we’ve got to stay strong. That’s going to help transform state government and save taxpayers a lot of money.
Q. You often mention Speaker Madigan in your remarks, but lately you’ve repeatedly referred to “Madigan’s supermajority.” Is this a sign of a recurring theme as the November elections approach for seats in the House?
A. It’s just a simple fact, what I have to deal with. I’m trying to work in a bipartisan basis. I’m one person. The governor has certain strengths, but a supermajority in the General Assembly, they control what bills get called, what gets voted on. And the power of the Chicago political machine that Speaker Madigan runs is super-powerful. One of the challenges we have in Illinois is that the Chicago machine has pretty much run the state for Chicago’s benefit. We’re standing up to that, we’re beginning to change it, but we’ve got to change it. We should be one state. Chicago shouldn’t get preferential treatment. I work for the people in Chicago, hard — I work for them every day — but I work for everybody in the metro-east, I work for everybody in Carbondale. We need to be one state, and have the government working for everybody.