Greising: Rauner Achieves No Political Goals in 2019 Illinois Budget

Bruce Rauner made only two demands of lawmakers as they prepared a fiscal 2019 budget, and on both scores, the governor can only kind of, sort of declare victory.

Photo: Associated Press

BGA President David Greising writes a regular column for Crain's Chicago Business.

When Bruce Rauner first ran for governor, in 2014, he staked his campaign on the idea he would clean up Springfield. But so far, it seems, Springfield has cleaned his clock.

Rauner went to Springfield with a "turnaround agenda" that included dozens of items. The main policy points included reduced taxes, overhauling the state's public employee pension system and weakening Illinois' workers' compensation and product liability laws. Oh, yes, one more: freeing Illinois from the grips of House Speaker Michael Madigan.

The Illinois Legislature on May 31 passed its first full-year budget since Rauner became governor, and the no-longer-novice politician seemed relieved just to sign it June 5. With a budget in hand, he now is free to joust with Democrat J.B. Pritzker in the governor's race without a state budget stalemate dogging him. Rauner called the signing "a small celebration" and said of the bill, "It's not perfect, but it's a step in the right direction."

Capitulating to the powers of Springfield and abandoning his reform agenda, Rauner essentially made only two nonnegotiable requests. He insisted the budget be balanced—a requirement of the state constitution, incidentally, but still a standard that is rarely met. And he insisted on no new taxes.

On both counts, the governor can only kind of, sort of declare victory. The so-called "balanced budget" teeters on assumptions that are nearly as precarious as the state's fiscal standing. The budget assumes, for example, that the Thompson Center—which has been on and off the market since before Rod Blagojevich went to prison—will be sold this year for $300 million. And it lays no serious plan for repaying more than $7 billion in unpaid bills.

Rauner's statement did not mention the biggest white flag of surrender in the deal: his reliance on a tax hike engineered by Madigan last summer to bring in enough revenue for the numbers to add up. In other words, Rauner has gone from blasting the "Madigan tax hike" in his TV ads to relying on the $5 billion it kicks out to turn the state's red ink into black.

Just how tipsy is the so-called balanced budget? The Illinois Policy Institute—the conservative think tank from which Rauner seemingly recruited half his administration early in his term before he fell out with the group—crunched the numbers and says Rauner has come up short. The governor's budget overestimates the likely number by between $635 million and $1.5 billion, the institute says.

Objective voices at two of the nation's largest rating agencies were no more generous. Moody's warns that some 30 percent of state revenue in the year beginning July 1 will go toward debt payments, pensions and other fixed costs. "Part of the problem is that state officials always face the temptation of making the ultimate reckoning worse by pushing costs to the future, and they've used that approach many times in the past," Moody's says.

"The substance of the package largely represents an extension of the status quo," echoes Standard & Poor's. So much for a game-changing reform agenda.

In his first year in office, Rauner stuck to his political talking points and wound up with no budget. Last summer, he stood by while Madigan engineered a tax hike that made a quick-fix budget possible.

This year, Rauner endorsed a budget that is full of wishful thinking, political capitulation and unconvincing come-ons. In other words, it looks a lot like the budgets passed by governors of both parties on their way into this state's fiscal disaster. Big ideas he had touted—such as a plan to shift pension costs from the state to local educational institutions—went out the window, and instead of standing his ground again, Rauner instead bargained toward a budget his first-term self would never have signed.

Rauner actually said good things about the results and refrained from attacking Madigan and his supporters. This despite the fact Madigan and the Democrats did little to help; none of their ideas made a significant dent in Illinois' fiscal morass, either.

When Illinois elected Rauner, there were questions about whether he was so idealistic that he couldn't strike a political deal. This year, he was so eager to get a deal he threw his political agenda overboard.