Reboot Illinois
An observation on the Bruce Rauner budget plan: When you promise to deliver the E=mc2 of state government finances and you unveil 1+1=2, you can expect some flack.So it is with Republican gubernatorial candidate Rauner, who on Wednesday unveiled the second part of his plan to fix state finances while allowing the income tax reductions he strongly advocates.
Rauner, as you probably know, is the candidate who has promised to bring in a team of national business experts to revamp the finances and overall performance of Illinois state government. He’s a highly successful businessman (though not a billionaire, he has noted) who has vowed to bring his acumen to the Executive Mansion, where he’ll shake up the status quo.
That’s why so many people were sorely disappointed/outraged two weeks ago when, at a press conference that featured three live chickens, Rauner unveiled an array of garden-variety savings ideas that (A) we’ve heard before and (B) won’t bring anywhere near the savings the state will need to make up billions of dollars in tax revenue it will lose if tax rates fall.
I was among the critics, and you can read why here. On Wednesday, Rauner proposed asecond round of ideas for the state. These came in a section of Rauner’s “Bring Back Blueprint” that the candidate titled “Corporate Welfare.”
Again, though, the E=mc2 expectations were met with 1+1=2 reality.
Not that Rauner doesn’t have worthy ideas in his “Corporate Welfare” treatise. Illinois for too long has been held captive by big corporations that demand handsome tax break ransoms under threat of packing up for a more “friendly” state. It’s time to reform the EDGE credits that have led to corporations like Motorola and Sears shaking the state down (while small business owners get the back of the state’s hand).
Rauner suggests taxes on those buying race horses and on surviving spouses who inherit yachts or personal aircraft. Good ideas, from a fairness perspective. Rauner doesn’t provide an estimate of how much such a tax will raise annually. Maybe I don’t hang out in the right crowd to make this judgment, but I’m going to guess that that surviving-spouse-inheriting-the-family-yacht/plane/helicopter doesn’t happen all that often in Illinois.
And, hey, why not make newspapers pay tax on the ink and paper they buy, as Rauner suggests. That’ll bring in $32 million a year. Find 100 more such new things to tax and you’ve paid more than half of the state’s unpaid bill backlog.
But we’ve heard these ideas before, including this year, when none other than House Speaker Michael Madigan proposed a rewrite of the EDGE rules. Just as with the cuts Rauner and the chickens heralded two weeks ago, these are small revenue enhancements that hardly will replace a fraction of the income tax revenue the state stands to lose very soon.
Yet I don’t view Rauner’s tax and budget plans as particularly egregious or even surprising in their lack of innovation.
Rauner is simply doing what other politicians in Illinois have done for decades: He’s promising a painless way out of the financial morass Illinois has created for itself.
The simple truth is that no amount of “innovation” in budgeting is going to make painless what Illinois needs. We’ve got $5 billion in unpaid bills. We now have a state budget that spends $1.5 billion more next year than the state will have.
Worse, Illinois has been living for many years believing it can afford a lot more government than it can pay for. We really have no idea what we truly can afford at any tax rate.
That’s because lawmakers have been efficient in producing smokescreens that hide from us the true cost of running state government.
Faced with shortfalls, lawmakers repeatedly struck deals with unions to use pension payments to “balance” the budget. That practice earned Illinois a fraud charge from the Securities and Exchange Commission and built a pension crisis that threatens to crush state government.
The Illinois State Lottery started 40 years ago as a way to boost education funding. Less than two decades later, the state legalized its first riverboat casinos to bring tourism and gambling dollars into Illinois. That taste of casino money quickly led to the proliferation of casinos in Illinois.
We’ve become so dependent on gambling to prop up state finances that you can hardly fill up at a gas station these days without encountering a video gambling room.
Lawmakers this year designed a state budget that borrowed hundreds of millions of dollars from special, dedicated state funds. That means they’ll have to pay back $600 million or so next year when they put together the fiscal year 2016 budget.
Another smoke grenade to further the deception of a “balanced” budget.
At a forum co-sponsored by Reboot Illinois in Lake Forest this month, state Rep. Scott Drury, D-Highwood, suggested that Illinois needs to let the income tax rate drop and see what happens. Will there be chaos, as Gov. Pat Quinn suggested in his budget address? Will business enjoy a resurgence, as Rauner says? We have no idea, because any threat of hardship for decades has been met with borrowing, pension shorting, gambling expansion and accounting tricks.
Another forum participant, state Rep. David Harris, R-Arlington Heights, noted that this bottomless bag of financial tricks is the reason so few people believed Gov. Pat Quinn when he predicted doomsday if his 2011 tax increase was not made permanent.
Clearly there’s a lot more to Rauner’s candidacy than just his budget suggestions. He and Gov. Pat Quinn are 180 degrees apart ideologically on government’s role in the economy, on public sector unions and on just about everything else having to do with how a governor should function.
But I’m not convinced either is being straight with us on what stands between today’s debt-ridden, job-challenged Illinois and the thriving, healthy state we all want it to be. There’s an air of alchemy in both candidates’ approach to the state’s finances.
Quinn says a permanent tax increase is the only way and that government already has been cut to the bone. Yet we’re now hearing disturbing details about a $55 million program that purported to curtail gun violence by paying kids to hand out pamphlets and by shoveling money at “agencies” that did nothing.
Rauner tells us that lowering taxes is the answer — it’ll revive the Illinois job market and put more people on the income tax rolls — but gives no practical vision for avoiding the kind of drastic, immediate cuts to essential services about which Quinn has warned.
Folks, we’re not talking about the theory of relativity here. There’s no equation in the wings that’ll turn the science of state budgeting on its ear and rain billions of unseen dollars onto Illinois. There’s no gold to be spun from the leaden numbers now facing Illinois taxpayers.
For too long, Illinois lawmakers have made 1+1 equal whatever they needed it to at the moment. What we need now is simple math and a dose of truth.
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Matthew Dietrich is Reboot’s executive editor. An award-winning journalist, Dietrich is the former editorial page editor of the State Journal Register in Springfield. He believes in holding our politicians accountable. Read Dietrich’s take on the leadership vacuum that sent Illinois sinking. You can find Reboot on Facebook and on Twitter @rebootillinois.