Wednesday, February 17, 2016

Illinois Governor Rauner’s Budget Address (or More of the Same), February 17, 2016

A few excerpts:

“…For more than two decades, we’ve had unsustainable unbalanced budgets, undisciplined spending, increased borrowing from retirees and vendors, rising taxes, inadequate infrastructure investment, massive manufacturing job losses, and stagnant family incomes.  Dismal economic performance. The truth is, we haven’t had a truly balanced budget in Illinois for decades.  In ways both obvious and hidden, we’ve overspent, and raised taxes to cover it…

“Years of unpaid bills – with their punishing 12% interest rates – have cost taxpayers more than $1 billion in interest. Worse: Delaying pension contributions through a slow ramp, which didn’t pay in the actuarially required amount each year, was the equivalent of borrowing from the pension funds at an 8% interest rate – which is the long term yield on pension assets. Eight percent is a stunningly high interest cost for our taxpayers to bear – that’s the rate you pay on junk bonds!  Illinois taxpayers owe an additional $40 billion to the pensions because of this hidden borrowing scheme…

I won’t support new revenue unless we have major structural reforms to grow more jobs and get more value for taxpayers.  I’m insisting that we attack the root causes of our dismal economic performance… 

We are negotiating a new labor contract that is fair to both state employees and taxpayers – to save hundreds of millions of dollars this year and $3 billion over the next three years. Since last spring, we’ve been bargaining in good faith with all of the public sector unions whose members serve in state government.  We are negotiating on behalf of taxpayers who pay their salaries; on behalf of school children, the vulnerable, and the elderly, whose services depend on taxpayer funds.  I am negotiating for all of them…

“Three weeks ago, during the State of the State address, I said I would support President Cullerton’s pension plan as a first step toward major pension reform – and I urged this legislature to pass it without delay. President Cullerton’s pension reform can save taxpayers a billion dollars a year starting in fiscal 2018. Our administration lawyers met with Senate staff and made clear we will support whatever legislative language President Cullerton wants to use. Unfortunately, as of today, no bill has even been introduced…

To take this path, we don’t have to enact every item of our Turnaround Agenda in their current forms, but we must pass REAL reforms this year… To balance the budget without reform, we’ll have to take a microscope to every other category of state spending…

For the complete address, click here.

From Crain’s Chicago Business:

“Declaring that 2016 ‘cannot become a re-run of last year,’ Gov. Bruce Rauner today called on lawmakers to end the year long stalemate that has driven up state debts and borrowing and begun to exact a toll on key services. Though he hinted that he doesn't need all of what he has asked for in the past year, his bottom line remained the same. Majority Democrats, he said, must either give him the structural reforms he argues are needed to cut the cost of government and reboot the state's economy, or give him the ‘the authority to cut spending to live within our revenues...’” (Greg Hinz). 


  1. From Crain's (an update):

    "If the preliminary reaction is any indication, peace most definitely is not at hand.

    "For instance, Cullerton, the supposed moderate relative to Madigan, quipped in a quick interview that 'a lot of things I heard didn't sound entirely accurate.' He called the speech 'deja vu.'

    "From the Illinois Federation of Teachers: 'We've heard his campaign speeches too many times before. His call today for a 'clean bill with no games' is particularly ironic given his record of misleading proposals and extreme demands that have hurt ordinary families.'

    "But the Rauner-friendly Illinois Policy Institute said voters backed change when they elected Rauner. 'It's time for politicians in Springfield to wake up. Illinoisans don't want more tax increases. They don't want things to stay the same.'

    "And the Illinois Manufacturers' Association: 'We applaud Gov. Rauner for offering two clear and comprehensive paths for balancing the state's budget and ensuring the long-term growth of the Illinois economy.'

    "Personally, I like the statement from Rep. Jack Frank, D-McHenry, the best. As it said in the headline, 'Speeches aren't solving the budget crisis. Negotiation will...'"

  2. "Either you give the executive branch the authority to cut spending within our (existing) revenues. Or we agree—together—on economic and governmental reforms, to accompany a negotiated balance of spending reductions and revenue that ensure Illinois can be both compassionate and competitive" -Rauner.

  3. Statement from IEA President Cinda Klickna on Rauner’s budget address:

    SPRINGFIELD, Ill., Feb. 17, 2016 – The governor’s budget, despite the funding proposal for preK-12 education, is a great disappointment to the 130,000 educators who are members of the Illinois Education Association, because it fails to meet our students’ needs.

    The governor’s proposal continues to financially starve higher education at a time when funding cuts threaten the very existence of some our state’s finest colleges and universities.

    In addition, many students come to our classrooms from extremely stressful homes, which has a tremendous negative impact on the ability of these children to learn. Agencies that help our state’s most vulnerable citizens, by providing child care, by providing services that help veterans, senior citizens and children, have reduced programs or shut down completely as a result of Governor Rauner’s misplaced priorities.

    The governor’s job is to unite Illinois, but this proposal continues his “divide and conquer” approach to governing. It is time the governor put his political priorities aside and propose a budget that meets the needs of all citizens.

  4. "increased borrowing from retirees?"