Steve's Blog

“We cannot solve our problems with the same thinking we used when we created them.” – Albert Einstein

Rauner’s Trying to Avoid Reagan’s Mistake

Crossed Fingers 3In 1982, Ronald Reagan signed the Tax Equity and Fiscal Responsibility Act (TEFRA). TEFRA was a bill that increased taxes, and was part of a grand bargain that the President entered into with the Democrat-controlled Congress to increase taxes by $1 for every $3 in future spending cuts that the Congress would propose.

Reagan’s mistake was trusting the Democrats in Congress to keep their word on spending. With TEFRA safely passed, the spending cuts never materialized. TEFRA became what was at the time the largest tax increase in U.S. history.

Fast forward to 2016 and the current budget crisis in Illinois. Governor Bruce Rauner has proposed a “Turnaround Agenda” for Illinois which includes measures to reform our workers’ comp system, allow local governments to opt out of prevailing wage agreements and project labor agreements, create local employee empowerment zones (basically local-option right to work laws) and a number of other proposals meant to reduce the burden on taxpayers and businesses to encourage economic growth. He’s made it plain that he’ll not sign a budget until his Turnaround Agenda is passed.

Enter Senate President John Cullerton, who has blasted Rauner for focusing on the Agenda instead of the budget, while at the same time House Speaker Mike Madigan introduced a Democrat version of the budget that spends $4 billion more than the state is scheduled to bring in. This is all against the backdrop of a May 31 session deadline, after which anything that passes the Legislature must be done with a 3/5ths majority.

I’d like to think that Bruce Rauner has taken Ronald Reagan’s experience with disingenuous legislators and decided that his best chance to get real reform passed in Illinois is to stick to his guns and count on the public to support him against this blatant attempt of the Democratic leadership to cling to the status quo.

It’s obvious that the Democrats want to close their budget gap with tax increases. I’d like them to go outside and show us all the tree upon which that money grows, because it certainly isn’t going to come by the ever-shrinking pool of taxpayers in this State.

President Cullerton is quoted as saying:

“While it’s interesting he goes around the state and wants to talk about these interesting issues that we’ve been debating here for years and decades, he is the governor. He has to get back to the budget.”

The thing that he’s studiously ignoring, and which nobody seems to have picked up on, is that these “interesting issues” are part and parcel with crafting a budget. The Democratic majority is treating the Illinois economy as a zero sum game: for someone to win, someone has to lose. The way to create sustainable revenue and provide the money necessary to pay the State’s bills is to grow its economy; until we get back into competing for new business without one hand tied behind our back, we’ll lurch from crisis to crisis and never catch up.

Governor Rauner is almost 1/8th of the way through his term. He’s got to act now to make Illinois competitive, and while there are parts of his Turnaround Agenda that I don’t agree with, I think his insistence on putting reforms alongside of and making them a constituent part of the budget making process is the right thing to do.

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