Fact-Check: Pelosi Exaggerates Rauner’s Role in Illinois’ Fiscal Woes
President Donald Trump frequently cites Illinois’ fiscal mismanagement as a reason for potentially withholding federal assistance amid the national crisis caused by the outbreak of COVID-19.
In a May 4 interview with CNN, House Speaker Nancy Pelosi shot back with her own assessment of Illinois’ financial straits.
“Look at him saying these states want to be bailed out,” Pelosi told host Wolf Blitzer. “The state that he used as an example was Illinois, which got into fiscal problems because of a Republican governor who was governor there until Gov. Pritzker has come to pull it out.”
The National Governors Association sent a bipartisan letter to Congress in April that made clear the financial pressure caused by COVID-19 is being felt by states nationwide, not just in blue states as Trump has said.
But what about Pelosi’s assessment of how Illinois got itself into a financial bind?
Her comment suggests Illinois’ hardships are a matter of recent history, dating back just a few years to the time of Democratic Gov. J.B. Pritzker’s Republican predecessor. State finance experts say that’s misleading.
Understanding what Pelosi was referencing requires a brief detour into recent state history.
In November 2014, Illinoisans elected Republican Bruce Rauner as governor. Rauner, a private equity investor and political newcomer, reached an impasse with Democrats who control the legislature over how to run the state. This left Illinois without a spending plan for two years.
With government spending left operating largely on autopilot, social services suffered, public universities laid off thousands of employees and the state’s pile of unpaid bills tripled, causing credit rating agencies to reduce Illinois’ rating to near-junk status.
As the state’s chief executive, Rauner played a starring role in the showdown that caused the budget crisis. But he had plenty of co-stars among the state’s leading Democrats, including longtime House Speaker Michael Madigan, who has exerted influence over every state budget for the past four decades.
Democratic leadership also allowed a temporary state income tax increase to expire days before Rauner was sworn into office in 2015, leaving the state with even less cash to make ends meet during the crisis. Rauner had urged the legislature to let it lapse before taking office, and Madigan along with then Senate President John Cullerton obliged despite warnings from then Democratic Gov. Pat Quinn, who lost to Rauner in 2014.
A legacy of fiscal mismanagement
Foisting all the blame for the state’s unprecedented budget crisis on Rauner isn’t the only problem with Pelosi’s narrative. That’s because the tale of how Illinois dug itself into a fiscal hole dates back much further than his single term in office.
When we raised this with Pelosi’s office, a spokesman responded with an email saying she was “clearly referencing the fact that Illinois’ situation greatly worsened” under Rauner — not that he alone was responsible for the state’s fiscal woes.
But experts interpreted her statement differently.
"To claim that this is a problem created by Gov. Rauner is clearly misleading,” said David Merriman, an economist who heads the Fiscal Futures Project at the University of Illinois’ Institute of Government & Public Affairs. “It's a problem that's developed over decades.”
Illinois governors and lawmakers from both parties have long managed to increase government spending without raising the revenue needed to support it.
“For many, many years we’ve provided more goods and services … than our revenues would support,” said Charles N. Wheeler III, who has studied decades of state budgets as both a journalist and professor at the University of Illinois Springfield. “It’s always easier for lawmakers to fund programs than it is to raise the revenues to cover it."
Indeed, the alarm bells began sounding long before Rauner took office. A 2011 report from the state comptroller’s office warned of a looming financial crisis created by many years of rampant spending. The report cautioned that the recession at the time had exacerbated the state’s ongoing failures to reduce its debt, build up its emergency reserves, or contribute enough to state employee pension funds.
And when it comes to pensions, Illinois’ problems date back even further. In 1917, a report commissioned by the General Assembly was already warning the funds were “moving toward crisis” due to inadequate payments from the state.
“We’ve been shortchanging the pensions for more than a hundred years,” Wheeler said.
Pelosi said Illinois “got into fiscal problems because of a Republican governor who was governor there” before Pritzker.
Illinois’ financial situation did worsen during Rauner's term while the state operated without a spending plan for an unprecedented two years, but he wasn’t solely to blame. What’s more, the state was already teetering on the brink when he took office because of decisions made by leaders from both parties dating back decades.
We rate Pelosi’s claim Mostly False.
MOSTLY FALSE – The statement contains an element of truth but ignores critical facts that would give a different impression.
Click here for more on the six PolitiFact ratings and how we select facts to check.
“Pelosi responds to Trump's payroll tax cut demand: No way,” CNN, May 4, 2020
Backlog voucher report, Illinois State Comptroller, accessed May 8, 2020
“S&P, Moody's Downgrade Illinois to Near Junk, Lowest Ever for a U.S. State,” Bloomberg, June 1, 2017
“Did Rauner really pour $1 billion ‘down the drain’?” PolitiFact Illinois, June 25, 2018
“When it comes to Illinois’ deficit, how bad is bad?” PolitiFact Illinois, April 3, 2018
Email correspondence: Drew Hammill, Pelosi spokesperson, May 5, 2020
Phone interview: David Merriman, director of the Fiscal Futures Project at the University of Illinois’ Institute of Government & Public Affairs, May 5, 2020
Phone interview: Charles N. Wheeler III, professor emeritus of public affairs reporting at the University of Illinois-Springfield, May 6, 2020
“The State Fiscal Crisis: How Did We Get Here?” Illinois State Comptroller, September 2011
“Illinois Public Pension Reform: What’s Past Is Prologue,” Chicago-Kent College of Law, Summer 2014
“Apocalypse now? The consequences of pay-later budgeting in Illinois,” Institute of Government & Public Affairs at the University of Illinois, Jan. 19, 2015