I have not been following the budget drama in Springfield (Illinois) all that closely – for a couple of reasons. First, baseball. I spent a fair amount of time last month in Omaha, and driving back and forth to Omaha, for the College World Series. Plus the Cubs have been doing pretty good recently, at least at times. Second, there are other things going on in the world. The Iran nuclear talks. Supreme Court decisions. The mess in Iraq. Wondering when Vladimir Putin is going to re-start his invasion of Ukraine. And, of course, the question of whether Greece will pay its bills and/or keep the Euro. The last of which brings me back to Illinois. Because not paying bills and not being able to get agreement on what to do about it seems common to both Greece and Illinois – though Greece may have finally reached an agreement on it (now we’ll have to see if Greece can actually follow through on it).
So, several comments on Illinois. First, and I think this is probably the most important comment. If the Democrats, and especially Speaker Michael Madigan, had wanted to, they could have passed a tax increase (i.e., kept the income tax rate at 5%, instead of letting it fall back to 3.75%*) after the election in November and before Bruce Rauner was inaugurated in January. The Democrats did that after the 2010 election. Why didn’t they do it this time? Well, it wasn’t because of soon-to-be-former Governor Pat Quinn. Given some of the other things Pat Quinn did (and/or tried to do) after he lost re-election, I find it hard to believe he would have objected to a tax increase. And the Senate Democrats probably would have gone along. Which leaves the House – or, more appropriately, Speaker Madigan. Why wasn’t he willing to do it?
It would seem more likely that Speaker Madigan didn’t want the Democrats to do it by themselves – this time. Because the politics are different. In January 2011, Pat Quinn had just been re-elected, and he wasn’t going to criticize the tax increase. Also, in 2011 Speaker Madigan was going to be able to redistrict the legislature to protect his majority, and in 2012 Barack Obama was going to be running for re-election. In other words, there wasn’t much political risk. This time is different.
So what’s going to happen? I can think of four possibilities: (i) the Democrats have veto-proof majorities in both the Senate and House, so they can pass whatever budget they want, along with the taxes to pay for it; (ii) Democrats in the General Assembly plus Bruce Rauner could pass a budget and any necessary tax increases, without any Republican votes; (iii) Democrats and some Republicans in the legislature plus Bruce Rauner could approve a budget and tax increases; or (iv) no budget is passed because the Democrats, Governor Rauner, and the Republicans can’t agree
While alternative (i) is technically possible, Speaker Madigan and Senate President John Cullerton probably can’t do it. And, in any case, they aren’t going to try.
I don’t know if Bruce Rauner is willing to agree to a budget without Republican support in the General Assembly (i.e., alternative (ii)), but it doesn’t matter because Governor Rauner has said he is not willing to agree to tax increases without other reforms. Also, I doubt Speaker Madigan is willing to pass a tax increase without some (a lot-?) of yes votes from Republican legislators because he doesn’t want to get blamed for increasing taxes. (Apparently, neither (a) doing the right thing, i.e., raising taxes to pay for the spending that the Democrats think is necessary, nor (b) being able to claim credit for making sure Illinois avoids the spending cuts that Democrats think are terrible is, in Speaker Madigan’s opinion, worth getting blamed for raising taxes.)
Democrats, however, complain that it is inappropriate for Governor Rauner to hold the budget “hostage” to non-budget matters. The issues are separate, they say, and shouldn’t be tied together. Pass the budget and then deal with other issues. Bruce Rauner disagrees. First, he knows the only way he can get the Democrats to even consider the reforms he wants to make is to tie them to the budget. Without the leverage of the budget, Governor Rauner’s proposals wouldn’t even come to a vote in the legislature, let alone be passed.
Second, and more importantly, if Illinois doesn’t change, there is no reason to give Illinois government more money. Democrats claim that Republicans are just playing politics. Democrats say that Republicans don’t want to vote for more taxes because they want to use any tax increase as a political cudgel in the next election. Maybe, but here’s a more important reason: Illinois is so messed up that, without reforms, any additional money going to the state will just be wasted. When Illinois increased the state income tax in 2011, how did things get better? The unpaid bills are still there. The unpaid pension liability is still there. The credit rating is worse, as is the business climate. The point is there is no reason to give the state more money unless it is going to use it better and the state is going to be run better.
On the other hand, and I think this is where Bruce Rauner is coming from: If the state can make some changes, both in how it operates and in how it lets businesses (i.e., people doing business) operate in the state, then higher taxes may make sense. But if the state isn’t going to change, then let’s start cutting back now. Because if we don’t make changes, raising taxes just kicks the can down the road – again. It merely puts off the cutting-back date. If we want things to get better, we have to do more than just raise taxes; we have to change the way the state operates.
That’s what Governor Rauner wants to do. Apparently, the Democrats think all we need to do is raise taxes – because everything else is fine, or at least good enough.
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* There is a legitimate question as to whether returning the state income tax rate to 5%, where it was until January 1, 2015, should be considered an increase or a restoration. I will use the word “increase” in this post, but I do understand the argument.
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