The movers and shakers of state government again are racing toward a dire fiscal crisis if they can’t agree on a budget for the new fiscal year that starts July 1.
Republicans led by Gov. Bruce Rauner — a wealthy businessman from Winnetka who never held public office until he beat former Gov. Pat Quinn in 2014 — insists the path out of the state’s fiscal mess is cutting expenses and enacting pro-business reforms.
Democrats led by House Speaker Michael Madigan — a legislator since 1971 who’s been speaker for 30 of the last 32 years — and Senate President John Cullerton, both Democrats from Chicago, favor a more moderate approach that combines some cuts to state programs and revenue increases.
Who wants what?
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Republicans and Democrats both want to agree on a state budget, but they favor going about it in different ways. Rauner has conceded that the state needs more revenue, but he favors making spending cuts and enacting business-friendly reforms as part of his Turnaround Agenda that he says will spur the economy rather than increasing taxes to balance the budget. He has accused Democrats of wanting to tax their way to a balanced budget.
Madigan agrees the state needs to right its fiscal ship, too. But while Rauner insists lawmakers can’t tax their way to a balanced budget, Madigan has said Rauner can’t cut his way to one, either. He said Tuesday that simply passing a tax increase to fill gaps in the budget “would be unreasonable” and opposes Rauner’s plan to tie budget negotiations to non-budgetary reform proposals. He favors a moderate approach that makes some cuts to programs and also includes more revenue.
How do they plan to get it?
Rauner says he’ll agree to a budget if lawmakers first agree to make the following structural reforms:
▪ Enacting term limits for legislative leaders and taking the legislative district drawing process out of the hands of lawmakers.
▪ Passing a property tax freeze and giving local governments more control over property tax rates.
▪ Reforming the state’s workers’ compensation and civil lawsuit systems that Rauner says drain businesses of money they could otherwise use to expand their operations, hire more workers and pay those workers higher wages.
Rauner proposed a state budget that relied on deep cuts to state programs and also assumed a pension reform law the General Assembly passed in 2013 would be upheld by the state Supreme Court. But the Supreme Court tossed out the law this spring, negating the savings Rauner assumed and putting the spending plan out of balance by $2.2 billion.
Democrats contend that Rauner’s proposed reforms, coupled with the deep cuts to state services he’s proposed if those reforms aren’t embraced, hurt the public and lower the standard of living for Illinois residents. Instead, in waning days of the spring legislative session, Madigan’s House and Cullerton’s Senate passed a series of bills comprising a state budget that still includes some cuts but is far less drastic than Rauner’s plan. That budget is $4 billion out of balance. Republicans called that plan “phony” and refused even to vote against it. They voted ‘present’ instead.
What’s at stake?
The new fiscal year begins July 1. Comptroller Leslie Geissler Munger said Wednesday that the state would no longer be able to make certain payments if there’s no budget deal then. Among the obligations that would not be met:
▪ New Medicaid provider payments would not be made.
▪ State employees would not be paid starting July 15.
▪ The first state aid payments to public schools won’t be made as planned on Aug. 10.
▪ New payments to state vendors won’t be made.
▪ Small businesses and nonprofits won’t receive expedited payments under a program former Comptroller Judy Baar Topinka instituted last year.
State debt and pension payments would still be made, as would those for some social services and most payments to local governments.
“This isn’t a game to be won or lost — rhetoric, posturing and decisions have grave implications on people and communities across the state,” Munger said. Saying she was disappointed by inactivity, she characterized the jabbing back and forth between Republicans and Democrats as “needless theater.”
Munger, appointed by Rauner after Topinka died shortly after winning re-election, further urged lawmakers to adopt the governor’s proposed reforms.
Does the state actually have a budget plan in place?
Kind of. Since the House and Senate used their Democratic majorities to pass budget bills in May, they could send those bills to Rauner’s desk.
Madigan spokesman Steve Brown on Tuesday said the passage of that budget —out of balance though it is — wasn’t about Democrats railroading Republicans with their supermajorities in the House and Senate. Instead, he said non-budget negotiations between legislative leaders and Rauner had made no progress. Lawmakers needed to act before time ran out on May 31.
“That’s why we advanced a spending plan before the end of May so there wasn’t the trap laid that we didn’t have a spending plan until after we had non-budgetary issues resolved,” Brown said.
What’s with all the tough talk?
During his Belleville visit Monday, Rauner blasted Madigan and Cullerton, both attorneys, saying their law firms profit from high property taxes and that they have only the interests of “the political class” and “the Chicago machine” in mind.
“We’ve got to get the power away from (Madigan and Cullerton),” Rauner said. “Our state has been controlled by the Chicago political machine for years and years.”
But there’s a reason Rauner’s statewide campaign-style flyarounds lead some to think he’s taking “bully pulpit” to a new level.
Kent Redfield, professor emeritus of political science at the University of Illinois Springfield, said it’s about leverage. “You have maximum leverage right when you take over, and you try to get as much out of it while you can,” he said.
But the way Rauner applies that leverage could be his downfall, said David Yepsen, director of the Paul Simon Institute for Public Policy at Southern Illinois University Carbondale.
“A concern about Rauner is that the skills that made him wealthy are not the same skills he needs to reach a consensus,” Yepsen said. “He’s in campaign mode too much.”
And, Redfield noted, Rauner will be in charge for another three and a half years. In the interest of compromise, a piecemeal approach to enacting the reforms he favors might be the better choice.
“He’s going to be reshaping agencies over the next four years. I don’t think this is one-and-done for the governor,” he said.
Will state government shut down?
Neither Democratic leadership nor Rauner want a shutdown, but both have made preparations just in case. During a visit to Belleville Monday, Rauner said his office is “making contingency plans” that include halting some state services and closing state buildings should the parties fail to come to an agreement.
For their part, legislators passed a law that forbids strikes and lockouts of public employees in the event of a shutdown. Rauner has yet to sign that bill. Brown said Tuesday that “if he really doesn’t want a shutdown, the quickest thing for the governor to do is to sign that bill.”
Despite each side’s stated hopes to avoid disaster, it’s hard not to think Illinois is headed toward one anyway. Redfield, who’s observed state government for 40 years, said the current climate in Springfield is as ripe for a meltdown as he’s ever seen it.
“I think that we certainly have run up to the cliff and have run past the cliff,” he said. “The prospects of what could happen could be horrendously disruptive.”
Redfield said Rauner brings a different dynamic to Springfield. Previous summertime battles have featured longtime veterans — his examples included former Republican Governors Jim Thompson and Jim Edgar, each of whom have sparred with Democratic leadership before — who “know each other. They might not trust each other but they have reasonable expectations.”
“If Rauner thinks he’s going to roll (Madigan and Cullerton) and they’re just going to cave and collapse, I don’t see it. For one of them just to run up the white flag, I don’t see that happening,” he said.
Yepsen said the tension in Springfield has lots of people worried.
“Everyone’s jittery in the political community,” he said. “The cost of this dispute is not measured just in dollars. It’s measured in people who work for government being distracted by this crisis.”
But maybe cooler heads will prevail. Even though “things look a little pessimistic right now,” Yepsen doesn’t foresee a shutdown.
“You’ve got strong-minded players. They didn’t get where they are because they’re wimps. But my hope also is that they didn’t get where they are because they don’t do deals.”
So if the hostile rhetoric makes things look hopeless even though a deal may be near, it’s because appearances matter.
“They’re just positioning for their base,” Yepsen said. “Part of their thing is leading their people. There’ll be a lot of feints and dodging and weaving — you have to show folks you tried to get the best deal you could.”
What do local lawmakers say?
Predictably, local lawmakers’ opinions differ along party lines.
Rep. Jay Hoffman, D-Swansea, said Friday that Rauner’s hurting Illinoisans by refusing to negotiate on a budget unless his reform agenda is passed first.
“We shouldn’t be holding the budget hostage, and the people who rely on the budget hostage, in order to move forward his radical political agenda,” Hoffman said. “We’re having a very difficult time getting to what really matters, and that’s the budget. I think there should be fewer press conferences and more negotiations.”
And then there are Rauner’s reform proposals themselves. Hoffman said they would mean disaster for the middle class.
“What they really are is taking away very significant, hard-earned rights of the middle class and allowing a billionaire agenda to move forward,” he said. “It’s unrealistic. You try to sit down and discuss a mixture of cuts and revenue, and he’s unwilling until he gets his billionaire agenda passed.”
Republican Sen. Kyle McCarter of Lebanon backs Rauner’s all-at-once approach to reform because “taxpayers are tapped out.”
“It’s in the best interest of the taxpayers to rip this mandate off right now,” McCarter said Thursday. He said the choices that will decide the war that’s sizzling in Springfield “are going to be made in the Democrats’ districts as to whether they’re going to protect the citizens and the long-term health of the state or whether they’re going to protect the special interests that keep them in office.”
“The state has to be structurally reformed. You can’t just nibble around the edges and say it looks better now,” McCarter said. “(Rauner) is looking for the support of the people who put him in office and I think he’s going to get it. People are fed up.”