After he was elected, but before he was sworn in to office, Bruce Rauner repeatedly lambasted Gov. Pat Quinn and the legislative Democrats for passing a “booby trap” budget that was about to blow up in the state’s collective face.
Rauner was absolutely right. Last year’s budget was irresponsible and didn’t deal with the reality of the expiring income tax hike. As a result, the state’s budget is in a terribly deep hole right now.
But did Gov. Rauner really make all the “tough choices” necessary to get us out of that hole during his budget address as he promised? Well, he sure proposed a lot of cuts. But he planted at least one major booby trap himself.
As you may already know, Rauner proposed a pension reform plan that he says would save at least $2.2 billion in the first year.
Set aside the fact that both Rep. Elaine Nekritz and Sen. Daniel Biss, who both worked very hard on the legislature’s pension reform law, cannot fathom how Rauner’s proposal to move every state employee and public school teacher into the lower-cost “Tier Two” pension plan on July 1st will actually save that much money in the first year, or “immediately” knock $25 billion off the state’s massive unfunded liability. Let’s just take him at his word on this one, as supremely difficult as that likely is.
The problem with the plan is that he’s counting on that $2.2 billion “savings” to help balance the budget next fiscal year. All those who believe that a judge won’t almost immediately stop the plan’s implementation, as another judge did to the last pension reform law, please raise their hands.
I didn’t think so.
There is no way on God’s green Earth that the state can rely on that $2.2 billion savings next fiscal year. It’s a complete and utter fantasy, which makes this yet another dishonest budget.
House Speaker Michael Madigan called the idea “reckless” after the governor’s budget address.
Madigan’s right, but his counterproposal wasn’t a solution, either.
Madigan resurrected the idea of a 3 percentage point tax on personal income above a million dollars. But, at most, Madigan’s proposal would only raise a billion dollars a year. The deficit is nine times that amount.
And then there’s the problem of implementation. Madigan’s spokesman reaffirmed that the proposal can’t be put into place without first winning the approval of voters via a constitutional amendment referendum. But that can’t be done for almost two years. The idea has zero worth for next fiscal year’s budget, which begins on July 1st.
OK, back to Gov. Rauner. During and after the campaign, Rauner said Quinn and the Democrats had constantly “kicked the can” down the road. Again, he was right. This fiscal year’s budget plan moved spending off budget, which created gigantic holes in next fiscal year’s budget.
But Gov. Rauner did the exact same thing last week with employee group health insurance. The state’s backlog is about a billion dollars. Some providers aren’t being paid for a year. But Rauner would increase that backlog by up to $700 million by cutting the money spent on health insurance next fiscal year and not dealing with projected cost increases. His “savings” are completely illusory.
Ironically enough, the governor visited a Hormel Foods plant the day after delivering his budget address. No word on whether he kicked a can of Spam down the hallway while he was there.
And then there’s the myriad of smallish savings he derives from eliminating tiny programs that benefit some of the most vulnerable people in Illinois. Homeless youth services will be eliminated, for example. And at a time when heroin use is skyrocketing, Rauner proposes to cut the state’s treatment program.
The state eliminated Medicaid funding for dental services a few years ago. It was restored when Democrats, with plenty of evidence, claimed the cut was actually leading to higher costs elsewhere in the Medicaid budget. Rauner wants to eliminate it again.
The bottom line here is that no matter whatever else you read or hear, this budget is neither honest nor real.
It’s instead a too-clever by half concoction of budgetary magic beans.
After two years of avoiding any sort of detailed questions about his budget plans while on the campaign trail, Rauner basically punted the entire budget to the General Assembly last week. And it’s difficult to have much confidence in those particular folks after how badly they screwed up this year’s budget.
Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.