Thursday, Jan. 21, 2016 12:19 am
‘Governor 1.4 Percent’
But right now he ought to be referred to as “Governor 1.4 Percent.”
Why? Stay with me a bit and I’ll explain.
I sat down for an interview last week with Gov. Rauner. As with just about every reporter, Rauner blamed House Speaker Michael Madigan for stifling his beloved Turnaround Agenda. The governor said he was “frustrated” with Madigan for saying that his anti-union, pro-business reforms were “unrelated to the budget.”
“For example,” Rauner said, “if we can get business regulatory change so I can recruit manufacturers here, more transportation companies here and more businesses here, we can generate billions of new revenue without raising tax rates. That’s directly tied to the budget.”
“Billions?” I asked.
“Billions,” he replied, while promising to send me a detailed analysis.
A few days later, his staff emailed me a memo that the governor had sent to lawmakers last fall. You can see it yourself at http://CapitolFax.com/turnaround.
But the memo didn’t really say much of anything about revenues, other than if the governor could get Illinois to “average” levels of unemployment and Gross State Product and if the governor could stop the migration of Illinoisans to other states, his agenda would produce a grand total of $510 million in additional revenues.
That ain’t “billions.”
And while $510 million is nothing to sneeze at, it won’t even cover the interest on the state’s mountain of overdue bills that have been accruing because the state has no budget and no way to pay them.
Of course, the state has not had a budget since June and has no way to pay those overdue bills because the governor refuses to negotiate a new budget until he gets his Turnaround Agenda passed, which according to his own memo wouldn’t produce enough revenue to pay the juice on money owed to the state’s vendors – not to mention the universities which haven’t received any state funding, creating major crises at several of them, and all the other social service groups which make up our safety net being stiffed, forcing the state’s most vulnerable to go without.
And while $510 million seems like a lot of money, the governor’s projected revenue growth from his Turnaround Agenda would only be a 1.4-percent increase over the last state fiscal year.
Hence, “Gov. 1.4 Percent.”
And would it even be that much? Rauner has said he would agree to higher state taxes if legislators agree to his Turnaround Agenda. But as a Republican legislative friend pointed out to me last week, that tax hike will reduce growth, even with all of Rauner’s agenda items.
“The point is that they can’t argue that these anti-labor changes will magically produce $510 million of economic growth/revenue and then discount the negative effect of a tax increase on economic growth,” he wrote me.
So, let’s go back to the memo.
The governor claims the state would save $1.75 billion by making his demanded changes to union collective bargaining laws. $750 million of that would come from cutting healthcare costs for state employees. The rest isn’t explained.
He also claims that workers’ comp reforms would save the state $65 million a year. So, we’re looking at about $1.8 billion in savings. That’s far more substantial, but so far he’s getting absolutely nowhere because he’s taken such a hard-line stance against unions.
To be fair, Rauner’s memo also claims that local governments would save billions more with his reforms, but some of his numbers just don’t add up, like overstating the savings on allowing governments to opt out of prevailing wage requirements on nonfederal projects.
I’m not all opposed to doing some pro-business reforms. I think an easy case can be made that workers’ comp costs are far too high, for example.
But I spent part of an afternoon last week listening to an otherwise tough-minded woman cry helplessly on the phone about the literal implosion of the state’s social service safety net.
And one of the greatest charitable groups in the history of this state, Lutheran Social Services of Illinois, is facing an existential crisis because the government owes it $6 million.
In my opinion, the payoff for continuing this governmental impasse is not worth the price being paid.
Contact Bruce Rushton at email@example.com.