With the General Assembly in the first week of a rare overtime summer session, work continues to address the major problems facing Illinois, including high property taxes; a dismal jobs climate; and a $6.1 billion budget deficit—the largest of any state.
After a tense final week of May, the ball is squarely in the legislative Democrats’ court, with few signs of compromise emerging. Instead, legislative Democrats continued full-steam-ahead with partisan battle tactics—using a House committee hearing on June 3 to throw barbs at Governor Bruce Rauner’s education secretary, and a June 4 House floor session to force through a non-compromise workers’ compensation bill, immediately dismissed by Governor Rauner as “phony.”
Sadly, gridlock in Springfield is expected to continue. One June 9, the Senate will convene in a rare “Committee of the Whole” meeting to discuss freezing property taxes in Illinois. Late last week, legislative Democrats killed a Republican compromise proposal to freeze property taxes on a party-line vote in committee.
The battle in Springfield has a consistent underlying theme. Democrats are refusing to compromise and are pushing a major tax hike as the only solution. Republicans insist that pro-jobs reforms and property tax relief have to come before new taxes.
Governor Rauner announces cuts; Democrats propose giveaways
The differences between the two parties were clear this week, as Governor Rauner and Senate Democrats pushed in two opposite directions in response to the looming $6 billion budget deficit.
Governor Rauner announced a total of $400 million in spending cuts, in anticipation of a lack of agreement by the start of the next fiscal year on July 1. The cuts include:
• Freezing all vehicle purchases for the state police
• Grounding the state’s airplane passenger service
• Closing five state museums to visitors
• Suspending the State Low Income Home Energy Assistance Program (SLIHEAP)
• Identifying one or two juvenile correctional facilities to close
• No awarding of grants for the Department of Natural Resource’s Open Space Land Acquisition Development Program in FY 2016
• Immediate suspension of all future incentive offers to businesses, including Economic Development for a Growing Economy (EDGE) tax credits.
While Governor Rauner began the process of anticipating an austere budget, due either to the absence of a compromise budget on July 1 or the Democrats’ passage last week of a spending plan that’s $4 billion out of balance, Senate Democrats went in the opposite direction with a significant spending proposal that would put the state’s balance sheet in even larger deficit.
Their proposal includes:
• Increasing the state’s minimum wage to $11 per hour in four years
• Free tuition and fees at Illinois community colleges
• State-mandated employer-paid sick time
• A state tax credit for tuition and higher education
The Senate Democrats failed to provide a cost estimate for their proposals, or an analysis of how much further these proposals would put the state into deficit.
Illinois currently faces a $6.1 billion budget deficit, by far the biggest of any state. Democrats passed a “spending plan” last week with a nearly $4 billion deficit.
Concerns over national economy spill into Illinois
Last month, a troubling report from the U.S. Commerce Department showed reason for major concern over the national recovery. The report showing a 0.7 percent decline in the Gross Domestic Product, one of the most important economic indicators. The report continued to reflect “the weakest performance emerging from a recession in the post WWII period.” The report also pointed to “softness” in retail sales, and a six-month low in consumer sentiment.
Illinois’ economy is particularly susceptible to a weak national economy, with the worst credit rating of any state, a major budget deficit, and the loss of 300,000 manufacturing jobs since the turn of the century.
Illinois’ jobless rate is currently at 6.0 percent, one of the highest in the Midwest and well above each of our neighboring states. But Illinois’ real unemployment rate is much higher because many workers have given up looking for jobs and, as a result, are not counted in the unemployed numbers. Illinois has one of the lowest workforce participation rates in the country.
The weakened state of the economy is further proof of why Republicans continue to push for pro-jobs reforms, and a change to the broken status quo that contributed to a stagnant Illinois economy.
Papers: Rauner/Republicans on the right track
Editorial boards have expressed concern for a wide variety of troubles facing Illinois. As the debate unfolds in Springfield, many have continued to call for a change from the status quo.
On June 2, the Chicago Tribune editorialized: “Their party [the Democrats] lost the governorship because the people of Illinois were fed up with the status quo. That hasn’t changed. The people want to fix how this sorry state does business.”
On June 3, an editorial in the Chicago Sun-Times said that “Rauner came into office vowing to ‘shake up’ Springfield, which is why we endorsed him, and this is what a shake-up looks like. He is right to demand basic pro-business reforms before he will even talk about raising taxes to fill a budget hole of more than $3 billion. No sense putting good money after bad.”