PI Original Ellyn Fortino Wednesday February 4th, 2015, 6:56pm

Rauner's First State Of The State Address Garners Mixed Reviews

During his first State of the State address on Wednesday, Republican Gov. Bruce Rauner proposed raising the state's minimum wage to $10 over seven years, pushed his plan for right-to-work zones and vowed to keep his campaign promise to increase education funding. Progress Illinois provides highlights from Rauner's speech and rounds up reaction to his agenda for the state.

During his first State of the State address on Wednesday, Republican Gov. Bruce Rauner proposed raising the state's minimum wage to $10 over seven years, pushed his plan for right-to-work zones and vowed to keep his campaign promise to increase education funding.

Following the governor's 30-minute speech before the Democrat-controlled state legislature, reaction poured in from organizations, lawmakers and others across Illinois.

Rauner, who took office on January 12 after defeating former Democratic Gov. Pat Quinn in November, is the state's first Republican governor since 2003.

"Today marks a new beginning for Illinois and a new partnership between the General Assembly and the governor," Rauner said at the top of his speech.

During the gubernatorial campaign, Rauner, a wealthy businessman from Winnetka, mostly spoke in vague terms about his budget and policy proposals. On Wednesday, legislators were given a copy of Rauner's policy agenda, which the governor called "bold, aggressive and comprehensive." Rauner acknowledged that his agenda includes some items that lawmakers won't like, but encouraged them to consider the package "as a whole, not as a list of individual initiatives."

"We must choose to see the big picture - an overall package - that will lift up all of the people we've been chosen to represent," he said.

Rauner and state lawmakers are up against a multi-billion dollar budget deficit, a $100 billion pension crisis and other fiscal problems, including a $300 million funding shortfall in the current fiscal year for the state's Child Care Assistance Program.

"The task ahead of us is daunting and we have no time to waste," Rauner said, later adding that it is "make-or-break time for the Land of Lincoln."

Illinois Republican Party Chairman Tim Schneider echoed Rauner's urgency in a statement after the speech.

"The people of Illinois sent a clear message by electing Bruce Rauner: We need to turn our state around. Today, with Gov. Rauner in Springfield, Illinois's turnaround is well on its way," Schneider said. "This is a make-or-break time for our state, so I'm pleased that the Governor laid out a bold agenda focused on creating jobs, improving education, empowering taxpayers, and reforming our government."

Kent Redfield, professor emeritus of political science and public affairs at the University of Illinois at Springfield, was less impressed with the governor's address.

"What he wants to do -- better business climate, growing economy, more money for education, compassionate, competitive state -- that's all great, but this didn't tell me how we're going to get the major parts of that [done]," Redfield said, adding that the governor was also "putting out things that seemed to be a diversion from the real issues."

"I'm sure there's some more specificity in the policy agenda" given to lawmakers, Redfield added. "But if I want answers in terms of how are we going to keep state government afloat, how are we going to pay people that provide child care services when we're $300 million short ... how are we going to fix the budget and who's going to suffer -- I don't know a lot more than I knew this morning."

Rauner will have a chance to flesh out solutions to the state's fiscal issues during his budget address on February 18.

Senate President John Cullerton criticized Rauner's speech for being too heavy on "campaign rhetoric":

The state of the state is the governor's opportunity to give the people of Illinois a fact-based assessment of where we are and where we are going.  Unfortunately, too much of the governor's opportunity was squandered with campaign rhetoric that denigrates the reputation of the state.
 
Illinois has made progress since the Great Recession. With each speech that Governor Rauner delivers, I am reminded that the new governor has a lot to learn if he is to build on our successes in Medicaid reform, workers compensation, pension reform, cutting the bill backlog and meeting our obligations.
 
All of those successes have been bipartisan, but there is still much more work to do. We are going to have to work together to find fiscal solutions that fully fund education, fuel economic growth and meet the diverse needs of working families needing higher wages and child care now. Talk is cheap, but these priorities will require targeted investments.
 
The people of this state elected a divided government, but the governor will soon learn that it doesn't mean that he needs to be divisive.  As he begins to shape his budget, one of his principal tasks will be to identify common ground with the legislature as we all keep working for a better Illinois.

As the governor and state lawmakers gear up to tackle the budget, the disability advocacy group Access Living is urging against cuts to vital programs and community-based services that support the independence of people with disabilities.

In his speech, Rauner noted "that Illinois 'must choose to see the big picture,'" Access Living said in a statement. "The big picture must include services that allow people to live in less expensive community based settings. While the governor and the state of Illinois search for solutions to address budget deficits, the answers will not be found in cuts to services that support the independence of people with disabilities. Access Living supports a solution that ensures the Illinois State Budget addresses its liabilities and prevents damaging cuts to community-based services. Services that support the independence of people with disabilities are necessary for the fiscal rebound of Illinois. They make economic sense and they make common sense."

Illinois Hospital Association President and CEO Maryjane Wurth also weighed in on the governor's address, and called for state investments in health care:

The Illinois Hospital Association and the hospital community stand ready to work with the Governor and the General Assembly on workable solutions to meet the health care needs of the people of Illinois, and to address the state's challenges.

Illinois' hospitals and health systems have partnered with the state over the past several years to implement major reforms and cost savings in the Medicaid program. In order to stay the course and realize the benefits of these reforms, it is imperative that the state invest in health.

Hospitals and health systems are not only essential to ensuring the health and well-being of all Illinoisans, they are also vital to the fiscal health of their communities. As major job creators and economic anchors, our hospitals and health systems employ more than a quarter of a million people, generating nearly 450,000 direct and indirect jobs and a total economic impact of $83.4 billion a year. One out of every 10 jobs in Illinois is in health care.

Our hospitals and health systems continue to serve their patients and communities despite major funding cuts - more than $380 million in state Medicaid cuts since 2011 and more than $11 billion in federal Medicare cuts over ten years.

Our hospitals and health systems are leading the transformation of the health care delivery system to ensure all Illinoisans have access to quality health care at the right time and in the right place. We stand ready to work with the Governor and the General Assembly to continue the progress we've made these past several years. Now is the time to invest in health.

Term Limits, Anti-Union Proposals

Rauner reiterated his support for lawmaker term limits and called for a merger of the offices of state comptroller and treasurer, saying such a move "would save taxpayers $12 million per year and would be a fitting tribute to Judy Baar Topinka's legacy."

"The best voter empowerment tool is term limits. Term limits overcome the power of incumbency and help bring fresh thinking to government," Rauner said during his speech. "Let's finally give the people a chance to enact term limits by putting that constitutional amendment on the 2016 ballot, and let the voters decide."

When asked about his take on Rauner's call for term limits, Madigan, who is the longest-serving Speaker in Illinois history having held the position since 1983 for all but two years, said voters are already in control of how long a politician remains in office.

"I live with term limits," the Speaker said during his appearance on Illinois Lawmakers this afternoon. "And I think term limits are good when they're administered by the voters of the state. So in my case, I stood for election five times in the last 11 months. I stood for election as a state representative in the March primary. I stood for election for membership on the Democratic State Central Committee in the March primary. In April, I was re-elected as the chairman of the Democratic Party. In November, I was re-elected as a state representative. In January, I was re-elected as the Speaker. The voters had plenty of opportunities over the last 11 months to retire me from state government. Term limits are good when administered by the voters."

Rauner also stressed the importance of boosting job growth and making Illinois more competitive and laid out a number of anti-union measures, including his proposed right-to-work or "employee empowerment" zones designed to "give employees the freedom to choose whether or not they want to join a union."

"Local communities - local voters - deserve this option so that they can compete with other states and other nations for new businesses and new investment," Rauner said. "Employee empowerment zones will increase jobs for residents, increase economic activity for local businesses and generate more tax dollars for local governments. It's a win-win-win proposal."

Rauner floated other ways to "empower" Illinoisans, including "giving taxpayers the ability to consolidate local governments to control costs" and allowing governments to "lower costs by reforming project labor agreements and prevailing wage requirements that block true competitive bidding."

He took additional swipes at labor groups, saying "government unions should not be allowed to influence the public officials they are lobbying and sitting across the bargaining table from through campaign donations and expenditures."

"That has been federal law since 1947," he said. "Government must never force its employees to fund activities they do not support. President Jimmy Carter prohibited that at the federal level in 1978."

Rauner wants to see the ban on political donations for businesses with state contracts expanded to "all organizations with a state collective bargaining agreement, and organizations funded by entities receiving state Medicaid funds." Trial lawyers, he added, should also be prohibited from making political donations to elected judges.

Redfield said Rauner's remarks on political donations did not paint a "fair" picture of "what the issues really are."

"When he talks about the influence of campaign contributions, he really misstated federal law. And he's kind of suggesting that it's bad for unions or hospitals to lobby to have state government do things that benefit them, but it's OK for corporations and banks to lobby and give money so state government will do things that benefit corporations and banks," Redfield said. "It was, I think, [a] confusing or kind of disjointed approach to conflicts of interest."

Legislative leaders like House Speaker Michael Madigan (D-Chicago) pushed back against Rauner's anti-union talk.

"What I think what we oughta do is understand that organized labor represents working people," Madigan said in a PBS interview after Rauner's speech. "For myself, I'm very interested in helping working people and I'm sure that almost every member of the legislature shares that view. Organized labor doesn't represent everybody, but they do advance significant ideas before the legislature as to how we can improve the economy, help people get jobs, keep jobs, pay taxes, make a mortgage payment, pay for the education of a child."

Rauner, meanwhile, also called for reforms to workers compensation and said the lack of diversity in state apprenticeship programs needs to be addressed.

"We should require unions that contract with the state to have their apprenticeship programs reflect the demographics of Illinois communities, and to have their membership on public construction projects reflect the diversity in the surrounding area," Rauner said.

Fair Economy Illinois member and public sector employee Sonny Garcia, of Bloomington, called out Rauner for his anti-union attacks.

"Governor Rauner spent most of his speech attacking unions and public sector employees," Garcia said. "Undermining workers' rights to organize for safe working conditions and a living wage will further hurt Illinois' middle class families. If we want Illinois to succeed, we must tax big corporations and the wealthy and invest in, instead of undermine the middle class."

Minimum Wage

As part of his "economic growth and jobs package," Rauner said he favors increasing the state's hourly minimum wage from the current $8.25 to $10 over the next seven years. That proposal was met with laughter from some state legislators.

Just hours before Rauner announced that proposal, a bill to gradually raise the state's hourly minimum wage from $8.25 to $11 by 2019 saw action in the legislature. The measure, SB 11, sponsored by State Sen. Kimberly Lightford (D-Maywood), cleared the Senate Executive Committee by an 11-5 vote. The bill is now headed to the full Senate for consideration. Lightford told the Associated Press that she is not "interested in tying any of the governor's ideas to this bill."

In its State of the State response, the Illinois Retail Merchants Association, an opponent of increasing the minimum wage, said it wants to hear more details from Rauner on pro-business reforms that the governor could try to implement in conjunction with a wage hike.

"Governor Rauner has laid out an ambitious agenda reflective of a desire to see Illinois return to the role of an economic leader. We are concerned about proposals to increase the minimum wage as those mandates fall disproportionately on the retail industry, but attempts to offset those costs are welcomed as they recognize such mandates impose significant costs," said  Rob Karr, IRMA's president and CEO. "Retailers will withhold judgment until we see the details, how those benefits accrue to Illinois retailers, and what other proposals may come from the upcoming budget address. We stand ready to work with Governor Rauner and the legislature to help grow the economy and jobs accordingly."

Education

When it comes to education funding, Rauner said he will keep his campaign promise to increase it.

"We will increase k-12 education support, which will particularly help our most disadvantaged school districts," he said. "And our budget will increase funding for early childhood education so that more at risk children can enter kindergarten ready to succeed."

Additionally, Rauner said he wants to "lift the cap on public charter schools" and urged against funding cuts for community colleges as well as technical and vocational training programs. The governor brought up the issue of over testing in schools, saying, "We must ensure that the amount of time we test our students doesn't get in the way of high-quality instruction."

In his response to the State of the State address, Dan Montgomery, president of the Illinois Federation of Teachers, said Rauner needs to spell out exactly how he plans to pay for increased education funding. Here's Montgomery's full statement, which also blasts the governor for his proposed right-to-work zones:

Immediately upon taking office, Governor Rauner proclaimed that Illinois was in worse financial shape than he originally thought.

Our current state budget is unsustainable, but attacking the middle class with regressive, trickle-down policies that have failed miserably in other states is not the way to grow our economy. So-called "right-to-work" or "employee empowerment" laws won't make our state "competitive," and cutting the salaries and fundamental rights of hard-working Illinoisans isn't "compassionate."

Make no mistake - these proposals don't just harm state employees or union members from the public and private sectors. As Moody's pointed out today, "right-to-work" laws drive down wages, reduce access to healthcare, and increase income inequality for everyone.

Austerity isn't a path toward prosperity. As teachers and public employees, we've endured plenty of shared sacrifice in our classrooms and communities. It's time for corporations and the very wealthy to pitch in - especially since an overwhelming majority of voters demanded that millionaires pay their fair share for education just a few months ago.

We agree that government should serve all people and that we need to better fund our schools from cradle to career, but we still haven't heard the Governor's plan to pay for this and make public education more equitable and adequate for all of Illinois' students.

Governor, we want you to do well because we need you to do well, but it's time for responsible, real solutions instead of divisive rhetoric that pits people against one another. The campaign is over.

The Chicago Teachers Union also took aim at Rauner's "fact-challenged" agenda:

In today's State of the State speech, newly elected Gov. Bruce Rauner continued his attempts to run Illinois government like he ran his private equity company: benefit himself and burn everyone else. His loose command of facts and radical disempowerment agenda is an attempt to put more power in the hands of people who already have far too much. The same person who made $60 million in 2013 wants to drive down the wages and retirement security of women and African Americans and wants to keep low-income workers poor for an extended period of time. The same person who clouted his own daughter into one of the highest rated public schools in the state (with unionized teachers no less) wants to subject the rest of the state to a failed charter school model. The same person who owns nine homes refuses to address the real elephant in the room: Illinois' insufficient and regressive revenue generation policies. Rauner's approach is not to strengthen government at his "make or break time" but instead to break it and strip it for parts.

Rauner's proposal to raise the minimum wage keeps low-income workers low-income for seven more years. Not only is a $10 an hour insufficient, but his proposal for a $0.25/hour increase every year only serves to erode people's buying power. That level of change does not keep pace with inflation and prevents Illinois' economic growth. Sea-Tac, Washington's, $15/hour minimum wage has been a major boost to the local economy, as the number of jobs has increased. Illinois' families and students deserve such a raise, and Illinois' voters overwhelmingly support immediately increasing the minimum wage. Instead, the governor willfully puts the least paid workers even further behind.

The new governor also proposed to cut the earnings of middle class Illinoisans, thereby slowing the State's economy. Illinois already has the lowest number of state employees per capita, and local governments, especially school districts, have slashed budgets because of insufficient State support. Rauner's so-called "employee empowerment" plan only serves to disempower employees by eliminating their voice in the workplace. His stated goal of cutting public employees' wages and retired workers' pensions disproportionately impacts women and people of color, as public sector jobs have for decades provided women and African Americans a path to the middle class. As such, the governor is willfully proposing to slow the local economy on the South and Northwest sides of Chicago, neighborhoods that have been left out of Mayor Rahm Emanuel's downtown development strategy.

Rauner's education proposals are another fact-challenged illusion. His proposal for charter schools glossed over the fact that, as a recent University of Minnesota report demonstrated, charter schools in Chicago perform no better than traditional public schools and often worse. Rauner omitted the fact that unchecked charter expansion in Chicago led to the closure of 50 neighborhood schools over the objections of parents, students, and community members. Rauner omitted the fact, as outlined in a report released this week titled "Risking Public Money: Illinois Charter School Fraud", that charter operators in Illinois have stolen millions. Rauner omitted the fact that a charter school with his name on it routinely fined students for minor offenses like having untied shoes. Rauner omitted the fact that Illinois is nowhere near the cap on charters (and therefore does not need to raise it). Rauner omitted the fact that despite his claims to cut bureaucracy, adding charter operators to a school district actually increases bureaucracy through duplicative administration and oversight requirements. Rauner omitted the fact that his approach to charter schools eliminates school boards' local control. Rauner omitted actual proposals to reduce testing during his discussion of testing. Finally, Rauner omitted the fact that increased school funding for K-12 absent any revenue increases only ensures that cuts must be made in other areas of the state budget, areas that have already been slashed over the last 5 years.

Gov. Rauner continued to cite spending as state's biggest challenge. If he were serious about "Shaking up Springfield" and growing the State's economy, the Governor would focus on the real cause of the state's challenges: regressive and insufficient revenue generation. Rauner does not need to wait until the budget address to advocate for a surcharge on millionaires. He could support a graduated income tax. Rauner could propose eliminating tax loopholes that allow corporations to avoid hundreds of millions in Illinois taxes. Rauner could assist municipalities' finances by pledging to withhold state business from any bank that refuses to renegotiate toxic interest swaps. Rauner proposed none of those, however. As such, we can add a major item to the State's list of challenges: the Governor's continued aversion to facts and clear agenda to further shift power to the wealthy and connected.

Kristen Crowell, director of the progressive group United Working Families, said Rauner's blueprint for the state is all about "shared prosperity" for the wealthiest Illinoisans and corporations at the expense of working families:

Whether it's Rahm Emanuel in Chicago or Bruce Rauner in Springfield, the lessons of the recent past are clear--cutting taxes for corporations and billionaires like Rauner, while asking the rest of us to pay higher taxes and cutting vital services, is a slap in the face to countless working families.

We've seen this before: Regressive taxation. Privatization of public services. Fire sales of public resources to private interests. Self-dealing deregulation. Charter-mania and a war on public education. Attacks on the rights to collective bargaining. Lip service to a real living wage, and only in exchange for giveaways to big corporations.

This agenda has been tried, and tested, and it's failed.

For someone who spends more per year on wine than other Illinois families spend on EVERYTHING, it's outrageous to hear Rauner invoke other wealthy CEOs to justify his trickle-down agenda, the same agenda adopted by his wine-sipping partner Rahm Emanuel.

It's time to get serious about joining the rest of America in a fair economic recovery and to create real living wage jobs for working families across Illinois. The Rauner-Rahm vision laid out today represents exactly the wrong approach. Illinois' working families deserve better.

Criminal Justice Reform

Rauner touched on the need to reform the state's criminal justice system and called for the hiring of additional correctional officers. The governor said he would continue to invest in Adult Redeploy, a state initiative that moves non-violent offenders from prison into community-based programming.

State Sen. Kwame Raoul (D-Chicago) said he views criminal justice reform as a likely area of agreement among lawmakers and the governor:

I've been in the business of improving Illinois for many years now. We've abolished the death penalty, overhauled workers' compensation, protected voting rights and expanded minority participation in state contracts. I welcome Gov. Rauner to the effort. I'm ready to work with anyone who comes to the table with reasonable ideas and a willingness to compromise.

I do want to see more specifics and a detailed blueprint for where he is proposing to lead the state. The time for bashing Illinois and focusing on past problems is over; it's time to govern this great state and start shaping its future.

Gov. Rauner has reached out to me for input on our next steps in criminal justice reform, and this is an area where we can find common ground. I'm very pleased with the initial indications of the Rauner administration's direction on this issue - both in his words today and the individuals he has chosen to advise him. I look forward to working with the governor on a more just, humane and fiscally responsible approach to public safety.

Young Illinoisans Lay Out State-Level Policy Priorities

Ahead of Rauner's State of the State address, Young Invincibles, a national millennial research and advocacy group, and the student-run Roosevelt Institute Campus Network released a "millennial agenda for Illinois," calling on the governor and state lawmakers to take action this year on top policy priorities for young Illinoisans.

The 10-item, millennial-driven policy platform released Monday was developed by young Illinoisans with the NextGen Illinois project, an initiative of the Young Invincibles, the Roosevelt Institute Campus Network and other groups around the state.

Here's a look at the state-level policies recommended by the coalition of young Illinoisans:

Employment: Raise the minimum wage & index it to inflation
Health: Fund a trauma center for gun violence victims on the South & West sides of Chicago
Environment: Create tax incentives for companies to increase energy efficiency & create or use renewable energy
Education: Provide equitable public school funding by reforming or rethinking local property tax distribution
Civil Rights: Prohibit the imprisonment of first-time nonviolent offenders, & decrease the sentences of past marijuana offenders
Civic Innovation: Integrate civic innovation into the K-12 curriculum by teaching how to use government data to solve community problems
Legislative Reform: Change the procedure for drawing legislative district boundaries to give everyone equal representation
Judicial Reform: Limit the caseloads of public defenders, allowing them more time to focus on each case
Executive Reform: Create stricter rules to decrease the influence of lobbyists, like a waiting period between working in government & lobbying
Fair Elections: Require candidates to receive funds only from Illinois residents & limit contribution amounts

Eve Rips, Young Invincibles' midwest director, had this to say in response to Rauner's speech:

On behalf of Millennials across Illinois, we're thrilled to hear Governor Rauner stress his desire to focus on 'the next generation.' Millennials are still struggling with the Great Recession's aftermath and are in dire need of economic policies to help them get back on their feet.

We're pleased to see Governor Rauner emphasize his dedication to quality job training through investing in apprenticeship programs, as Illinois has the ninth highest youth unemployment rate in the country. Moving forward, we'd also like to see the Governor tackle college affordability: Illinois has our nation's fifth highest tuition costs making it harder for Illinois students to earn a degree that's often essential for long-term financial security.

Improving Children's Well-Being In Illinois

Also ahead of Rauner's speech, the Fiscal Policy Center at Voices for Illinois Children issued a new report outlining principles lawmakers should embrace to strengthen the well-being of children, families and communities in the state. Here's what the group is recommending in order to "build a stronger Illinois":

Illinois must make sound policy decisions that are based on what our children, families, communities, and businesses need to thrive.

We should reject slash-and-burn cuts to services and investments that alleviate the harms of child poverty and help children meet their basic needs.

Lawmakers need to raise the revenue our state needs to pay its bills and make strategic investments in the well-being of our children and the future of our state.

Illinois should raise revenue in a manner that asks everyone to pay their fair share, as opposed to Illinois' current system that requires those struggling to make ends meet pay a higher share of their income in taxes.

Our state must focus on the tried-and-true building blocks of economic growth -- like schools, safe communities, and transportation.

We must recognize that, though tax cuts may sound good, they have a negligible effect on creating jobs and building a strong economy, and in many cases harm state economies. Instead, businesses grow with consumer demand and locate in places where employees want to live.

Illinois should work to make government more efficient, while realizing that there is no conceivable way Illinois can solve the fiscal challenges it faces through spending reductions alone without cutting the investments necessary to strengthen our economy.

After the State of the State address, Voices for Illinois Children's President Gaylord Gieseke said:

In his State of the State speech today, Governor Bruce Rauner called for increasing investments in preschool and K-12 education. Voices for Illinois Children strongly supports increasing our currently-inadequate levels of state funding for education, but we also recognize that children live and develop in families and communities. Without significant new sources of revenue, other investments in children -- such as access to health services, affordable child care, afterschool programs, and job training for youth -- face devastating cuts. Children cannot be expected to thrive in school and beyond when working families and communities don't have the resources needed to invest in children's well-being and prepare them for a lifetime of success.

We look forward to working with Governor Rauner and legislators for a balanced approach that raises the resources our state needs to fund the range of investments necessary to promote children's well-being.

Image: AP/Seth Perlman

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