PI Original Ellyn Fortino Wednesday January 27th, 2016, 7:30pm

Rauner's State Of The State Address Sidesteps Illinois' Blaring Fiscal Problems, Critics Say

Republican Gov. Bruce Rauner delivered his second State of the State address Wednesday, during the seventh month of the state budget impasse. Progress Illinois provides highlights from Rauner's speech and rounds up reaction to his agenda for the state.

In his second State of the State address Wednesday afternoon, Illinois Republican Gov. Bruce Rauner didn't back away from his pro-business, anti-union political agenda at the center of the seven-month-old budget stalemate.

Rauner did, however, try to strike an optimistic tone as the Springfield budget battle continues.

"We came together to solve a budget crisis early in 2015. We came together to improve our Unemployment Insurance system, benefiting employers and workers alike. We came together to pass historic criminal justice reforms and much needed police reforms," the governor said toward the end of his roughly 35-minute speech.

"If each of us commits to serious negotiation based on mutual respect for our co-equal branches of government, there's not a doubt in my mind we can come together to pass a balanced budget alongside reforms," Rauner added. "If we work together, Illinois can be both compassionate and competitive."

Rauner wants to win items on his "turnaround agenda" through the budgeting process. During his speech, the governor reiterated his support for several of those agenda items, including term limits, workers' compensation changes, redistricting reform and a property tax freeze. The governor maintains that his proposed reforms would help improve the state's business climate and spur economic growth.

Democrats say Rauner's agenda items are non-budgetary and oppose the governor's anti-union proposals, saying they would harm middle-class families.

While the governor and Democratic legislative leaders have been warring over the budget, higher education institutions and a number of social services have gone unfunded since July 1.

At least one political observer said he was surprised by the lack of details provided in Rauner's speech about the state's current budget situation.

"If a person was listening to his speech who didn't know anything about what was going on in the state right now, ... they would not get the impression that the state is going through the worst fiscal crisis the state has seen since Abraham Lincoln was in the General Assembly," said Christopher Mooney, director of the Institute of Government and Public Affairs at the University of Illinois.

Rauner's speech did not address the numerous casualties of the budget impasse, including tuition assistance provided through the Monetary Award Program (MAP) to low-income Illinois college students.

Dave Tretter, president of the Federation of Independent Illinois Colleges and Universities, said the budget uncertainty is causing anxiety for higher education institutions and college students. He urged the governor and lawmakers to reach an agreement on higher education and MAP funding.

"From the state's perspective, if we expect to improve our economy and grow jobs and attract businesses, we certainly have to have a policy here that encourages students to stay in the state, to get a college degree," he said in an interview. "And really it's a win-win for the state. The students improve their lives. They become employed. They pay more taxes. So it kind of defies logic that we would let higher education kind of wither on the vine."

The Federation of Independent Illinois Colleges and Universities was one of many organizations that weighed in on the governor's speech. Rauner's remarks were lauded by business groups, including the Illinois Chamber of Commerce.

"The best way to improve Illinois for everyone is to improve the state's economy. Governor Bruce Rauner, in his second State of the State address, is offering ways to boost our economy, and these initiatives are ones that businesses support," the chamber's President and CEO Todd Maisch said in a statement.

Maisch also spoke in support of the administration's move to form a new non-profit economic development corporation aimed at increasing job creation and investment in the state.

"I am delighted that Governor Rauner is creating the Illinois Business and Economic Development Corporation," he said. "This public-private partnership will be a great benefit for Illinois' business community, because investment in our economy means jobs and that is good for everyone. In addition, the governor reaffirmed his support for key business needs such as workers' compensation reform, property tax reform, and a pro-business tax code. The business community can be optimistic that 2016 could be a good year."

The Illinois Manufacturers' Association reacted positively to Rauner's speech as well. The group "strongly agrees that reinvigorating our economy must continue to be a top priority for leaders in the states."

The association's statement added: "Illinois cannot afford to wait and risk losing another 14,000 good-paying manufacturing jobs this year that serve as the backbone of our middle class. Many items outlined by the governor including workers' compensation reform, creation of a new economic development partnership, and investing in education from pre-K through college are critically important for improving the lives of Illinois families and businesses. We are hopeful that leaders on both sides of the aisle can come together to achieve innovative solutions that will move Illinois forward."

Rauner's speech also got a thumbs up from Americans For Prosperity, which is backed by the conservative billionaire brothers Charles and David Koch.

"Governor Bruce Rauner understands what Illinoisans rightly think; state government is inefficient and spends too much, taxpayers are overtaxed and Illinois can grow again if our leaders decide to reject the status quo and transform our state government," Americans for Prosperity Illinois State Director David From said in a statement. "In today's speech, the governor laid out proposals that, if acted upon, will save taxpayer money, grow the economy and make Illinoisans' lives better. In particular, we applaud Governor Rauner's continued call for a property tax freeze that includes local cost controls so that homeowners and businesses can receive badly needed relief from the second-highest property tax burden in the nation."

Others were far less impressed with the points laid out in Rauner's address.

"Citizen Action/Illinois calls upon the governor to drop his anti-union, ideological agenda because it will not improve the state's fiscal situation and will only hurt the middle class," William McNary with Citizen Action/Illinois said in a statement. "It's time to stop campaigning and focus on what he was elected to do: to achieve real results for the people of Illinois. It's time to act like a leader and govern."

Chicago Teachers Union Vice President Jesse Sharkey questioned why Rauner is not pursuing proposals to make the wealthiest Illinoisans pay their fair share in taxes.

"If the governor really cared about property taxes for working people, he would ensure that his biggest backers--those select few in his tax bracket--paid what they really owe, but his proposals are instead more job cuts that drain our residents' ability to support their families," Sharkey said in a statement. "If we really want to improve our state's competitiveness, we need to support our public universities and ensure that low-income students have access to MAP grants, rather than hold our higher education centers hostage."

The CTU is part of the Grassroots Collaborative, which planned to protest Wednesday against the "governor's destructive first year" in office by marching to the "corporate beneficiaries" of Rauner's "failed agenda."

SEIU* Healthcare Illinois Indiana is another Grassroots Collaborative member.

"Home health care and child care have been particularly harmed by this governor, both by unilateral administrative rule; through the budget process; and at the bargaining table," the union's Executive Vice President Greg Kelley said in a statement. "The governor is quick to point out that he didn't cause the long-term structural problems facing Illinois. But there can be no question that he has made things worse. And now, instead of asking for shared sacrifice, it looks like he once again is seeking to balance the budget on the backs of seniors, children, working families, people with disabilities, women and people of color."

Potential Areas for Compromise?

Rauner, the state's first Republican governor since 2003, used his address to highlight some potential areas for bipartisan compromise, including reforms to the state's pension, education funding and criminal justice systems. He also pointed to the government consolidation recommendations recently issued by a bipartisan task force led by Lieutenant Governor Evelyn Sanguinetti.

"Now, I know some items in the report are easier to pass than others, so let's pass the easier ones first," Rauner said. "We don't have to pass them all day one. We do need to get started on consolidation and mandate reduction right now."

Those comments stood out to Rep. Elaine Nekritz (D-Northbrook).

"If he had governed that way in the last year, we wouldn't be in this pickle right now," she told Progress Illinois.

With still no budget agreement in sight, Nekritz said workers' compensation could be a potential area of common ground between Democrats and the governor.

"To my mind, that's a very clear path for us to have some productive discussions and to pass something, and there are probably others," she said. "But putting all that aside, the one thing I hear most often from businesses is they need predictability and stability. There's been nothing in the last year that has established more predictability or stability for businesses to invest in Illinois."

Pension reform was another topic discussed in Rauner's speech. Illinois is $111 billion behind in liabilities toward its five public employee pension funds.

The governor clarified his support for Senate President John Cullerton's pension proposal, after last week's confusion over whether Rauner and Cullerton had reached a pension reform deal. Cullerton's plan would offer workers a choice in their retirement benefits and provide roughly $1 billion in annual savings.

"As a first step toward bipartisan compromise," Rauner said, "President Cullerton and I have agreed to support his pension proposal that will save $1 billion" annually.

After Rauner's speech, Cullerton released the following statement:

Clearly there are numerous issues over which we disagree. But I'm going to focus on the few areas where there might be some agreement. That's the only way we're going to work our way out of this situation.

Today, I heard the governor echo my call for making school funding reform a priority and his desire to come up with a system that better recognizes the needs of students living in poverty and those facing other challenges. I commend him on that stand. An equitable school funding system is the turnaround Illinois needs.

If the governor wants to work with Senate Democrats, committing to a better school funding system is a good way to start.

I also appreciate the time the governor has taken to better understand our model for what we hope would be constitutional pension reform. He's moved a long way from his initial proposal and I know that wasn't easy. I look forward to working with him.

However, while I appreciate the governor's support in these key areas, there are many areas of disagreement. On a daily basis our safety net is unravelling, leaving disabled seniors and homeless veterans nowhere to go.

We're not honoring our student aid commitments to college students. We're not providing any public support to our public universities and colleges. That's all because of the stance the governor has taken over the state's budget. He caused this. He can end it.

But I don't want to get hung up on disagreements. We've got to find ways to work together to solve problems, and we need to start now because Governor Rauner's first year in office didn't work for anyone.

The effort to find a workable pension overhaul comes after the Illinois Supreme Court struck down the state's 2013 pension-cutting law in May, ruling that a reduction in contractual pension benefits is unconstitutional.

Nekritz was skeptical about the pension plan Rauner outlined Wednesday.

"It doesn't appear to me that this is the direction (the Supreme Court was) telling us to go," Nekritz said. "I wouldn't stand in the way of passing such legislation, but, again, it's going to be challenged, and I think the Supreme Court's been pretty clear about how they feel about it."

On the issue of education, Rauner laid out a 10-point agenda. His proposals call for, among other things, overhauling the education funding system, providing "proper funding for early childhood education" and giving school districts greater control over collective bargaining.

By her count, Nekritz said it appears that six of the 10 points on Rauner's education agenda would require additional funding.

"I'm all for helping out, making sure our school kids get adequate funding and the support they need to get a good education," she said. "I don't see the governor talking about the revenue to support those six out of the 10 items that ... seem to me to need more funding."

Illinois Federation of Teachers President Dan Montgomery had this to say about Rauner's State of the State address and education agenda:

Try as he might to distract from it today, Governor Rauner can't escape his failure to fulfill his primary responsibility -- to negotiate and enact a state budget.

His calls for bipartisanship are difficult to take seriously, especially given his identical words last year and his unwillingness or inability to lead since. Colleges and social services are making drastic cuts and average citizens are suffering while the governor refuses to negotiate or ask the wealthiest to pay a dime more, despite a majority of Illinois voters who support exactly that.

We also heard another list of so-called education reforms today, the vast majority of which do nothing to improve teaching, learning, or student success. We agree that we need to better fund our schools, but we reject the governor's demand that change must be contingent on his political agenda to weaken the rights and voices of working people, whom he's been attacking relentlessly.

What we didn't hear today was a real plan to address revenue for public schools and services or the funding crisis in higher education.

Our teachers, faculty, and staff go to work each day trying to help others, trying to educate our children, trying to resolve - not create - conflict. If he truly wants to work together and address our state's problems, Governor Rauner could learn a thing or two from them.

More Reaction

Reaction to Rauner's address has poured in from a number of other organizations and individuals across the state. Many groups, including the Responsible Budget Coalition, raised concerns over the state budget impasse.

"Hundreds of veterans, seniors, people with disabilities, immigrants, faith leaders, students, children, and working families traveled to the Capitol today from communities across Illinois to urge the governor to make them his number one priority. The governor ignored their calls and ignored the countless stories they've told about the harm being felt in their communities due to his failure to put a budget first that chooses revenue," said Dan Lesser with the Sargent Shriver National Center on Poverty Law and the Responsible Budget Coalition.

Rauner, Lesser added, "treated the enactment of a fully funded budget that invests in families and communities as an afterthought, failing to mention the issue until the final two minutes of his speech. This is despite hundreds of families chanting outside the chamber doors, calling for the enactment of a responsible budget immediately."

Most state services and programs are being funded during the budget standoff by a combination of laws, court orders or consent decrees.

Earlier this month, Rauner said he would release a plan detailing how to halt court-mandated state spending during the budget impasse. Exactly how the state could get out of such required spending is uncertain, however.

Access Living is among the groups speaking out against such a move, saying "the removal of consent decrees is a threat to the independence and rights of the thousands of people with disabilities in Illinois who remain unnecessarily institutionalized."

"The legal system is there for a reason," said Amber Smock, Access Living's director of advocacy. "The governor can't pick and choose which civil rights he wants to uphold."

Also weighing in on Rauner's speech was Illinois Health and Hospital Association President and CEO A.J. Wilhelmi, who called for a budget agreement that prioritizes the "health care needs of all Illinoisans." Here is more from Wilhelmi's statement:

The Illinois Health and Hospital Association (IHA) and the hospital community are committed to working with the governor and the General Assembly on workable solutions to meet the healthcare needs of the people of Illinois and to address the state's challenges.

We appreciate the governor's recognition of the importance of healthcare in his State of the State address, including his focus on public health, value-based care and community-based services, which will drive better outcomes and efficiencies in our healthcare delivery system.

However, we are deeply concerned that without a state budget in place, the backlog of unpaid bills and delay in payments for critical healthcare services continues to grow, jeopardizing access to care.

IHA and the hospital community urge the governor, legislative leaders and legislators on both sides of the aisle to find common ground to enact a fair and reasonable state budget for FY2016 as soon as possible, and to make the healthcare needs of all Illinoisans a priority.

We look forward to working with Governor Rauner on his healthcare agenda to ensure all individuals and communities have access to quality healthcare services at the right time and in the right setting.

U.S. Rep. Bill Foster (D-IL,11) was at least one federal lawmaker sounding off after the governor's State of the State speech. Foster questioned Rauner's lack of action around addressing the state's "payer state problem." Illinois is considered to be a "payer" or "donor" state because residents pay more in federal taxes than the state receives in the form of federal funds. Nationwide, Illinois gets back the fifth smallest amount of federal spending per capita for every dollar contributed to the federal tax system, according to a June 2015 report by the Illinois Economic Policy Institute.

"In today's address, Governor Rauner once again presented a false choice between raising taxes and weakening unions to solve Illinois' fiscal crisis. Yet the governor fails to recognize a critical component of Illinois' struggle: the payer state problem," Foster said. "Every year, tens of billions of dollars leave Illinois in the form of federal taxes, yet the state receives only a fraction of those resources in federal spending. Instead of cutting services and weakening unions, Governor Rauner should be standing up to Republican leaders in Congress and demanding our fair share."

Candidates in the upcoming election commented about the governor's speech as well. Among them was Bob Fioretti, a former Chicago alderman and mayoral candidate who is now running for the Illinois Senate in the 5th district. State Sen. Patricia Van Pelt (D-Chicago) currently holds the seat.

"Rauner insists on blaming unions for our financial mess, but this old saw isn't the problem now, and it hasn't been the problem for the decades anti-union business interests have claimed as much. More and more economic research shows unions are good for workers and good for the surrounding economy by raising wages," Fioretti said. "When working people earn more money, they spend more money on homes, food, music lessons and college education for their children. When businesses keep more money by not paying good wages, the money is paid in bonuses to executives or sent overseas."

Meanwhile, U.S. Senate candidate Andrea Zopp spoke Wednesday at the City Club of Chicago as Rauner was delivering his remarks.

Zopp, who is competing with U.S. Rep. Tammy Duckworth (D-IL,8) and state Sen. Napoleon Harris (D-Harvey) in the Democratic U.S. Senate primary, slammed Rauner for engaging in "ideological warfare." Zopp also drew attention to what she called an "epidemic of inaction" among elected officials at various levels of government. This inaction, she said, is having a "devastating impact on communities of color."

"The people getting hurt are not the elected officials, but the people they are supposed to serve," Zopp said.

*The SEIU Illinois Council sponsors this website.

Comments

The governor isn't part of the problem.

The Democrats have a super-majority and can easily override any veto by the governor.  They can pass any spending budget they want and keep it BALANCED by passing a tax increase to cover the spending.

However, a tax increase would make the Democrats unpopular.  The Democrats want to get credit for massive spending, but the Democrats don't want the blame for massive taxing.  They can't avoid the budget issue, however, since they hold all the cards and have all the power and authority.

The governor should be left out of the discussion. Go ahead, Democrats:  pass a BALANCED budget with any spending you want.  Override the governor's veto if he doesn't like what you suggest.  

Whatever action is taken, the budget must be BALANCED.  Income must equal or exceed spending.  Simple math. The Senate and the House just need to do their job.

 

 

"Rauner's speech did not address the numerous casualties of the budget impasse, including tuition assistance provided through the Monetary Award Program (MAP) to low-income Illinois college students."

Discontinue MAP if we don't have the money.  Increase taxes to continue MAP.  Make a choice, balance the budget.

""The governor is quick to point out that he didn't cause the long-term structural problems facing Illinois. But there can be no question that he has made things worse. And now, instead of asking for shared sacrifice, it looks like he once again is seeking to balance the budget on the backs of seniors, children, working families, people with disabilities, women and people of color."

Stop the funding or raise the tax - balance the budget.

 

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