By: Ted Dabrowski
Happy days are here again. With the passing of the governorship from Bruce Rauner to J.B. Pritzker, the nightmare in Illinois is finally over. And so is the acrimony and dysfunction. Politics can now return to the era of “compromise” former Gov. Jim Edgar likes to talk about so much. Back to when Illinois government “worked.”
Rauner’s exit might seem like a cause for celebration for many Illinoisans, but they’ll want to reconsider their exuberance. In their distaste for Rauner, they’ve forgotten how dysfunctional the state had become in the years before he took office. Two former governors were jailed, Illinois’ pension crisis became the nation’s worst, and credit downgrades rained on Illinois. The state stopped paying its bills. And worst of all, Illinoisans were leaving in droves.
No amount of post-Rauner euphoria should let Illinoisans ignore that reality. Nor should they ignore the fact that newly-minted Gov. J.B. Pritzker has offered no plans to fix the state’s mushrooming structural problems. Without real fixes, Illinois will continue its rapid downward slide and Illinoisans will continue to flee.
Things were bad
To be sure, the Rauner era was a mess, characterized by blunders, lost opportunities and about-faces. And his leadership style was no match for House Speaker Mike Madigan and his machine. As a result, Rauner’s reform agenda was crushed .
Their biggest fight, the two-year budget impasse, caused everything that was wrong with Illinois to bubble over for everyone to see. The state’s dysfunction reached a new high and its finances fell to a new low.
But as bad as things had become, keep in mind that the state’s finances were collapsing even before Rauner.
Start with unpaid bills. The state’s backlog had already reached a high of $9 billion in 2012, despite the temporary income tax increase then in place.
The state’s pension shortfall had skyrocketed, too. When Gov. Rod Blagojevich took office in 2003, the shortfall was “just” $35 billion. By 2014, it had tripled to $105 billion. The situation was so severe that Attorney General Lisa Madigan even invoked the “police powers” argument – the need for emergency powers – in front of the Supreme Court when defending the state’s pension reform bill SB1.
And state budgets hadn’t been balanced since 2001, even under the state’s own bogus terms.
The big three rating agencies didn’t ignore the pre-Rauner dysfunction. They downgraded Illinois a combined 13 times during Gov. Pat Quinn’s years in office. By the time Rauner was sworn in, the state’s credit rating was already the nation’s worst.
Illinoisans didn’t ignore the mess either. The state’s deterioration, coupled with some of the nation’s highest property taxes, has pushed its residents to leave. The net outmigration of residents hit a then-record of 95,000 in 2014 and caused the state to actually lose population that year. Illinois’ population has shrunk every year since.
The next four years
In the absence of reforms, none of those long-term trends will change under Pritzker and Madigan.
And while it’s too early to know exactly what policies Pritzker will pursue, his first major act as governor offers a glimpse. He signed salary increases for AFSCME – reportedly worth hundreds of millions – ignoring the fact that Illinois state workers already get the nation’s second-highest pay, Cadillac health care and free retiree health insurance.
On the other hand, Pritzker has revealed no plans to the tackle the state’s twin retirement debt crises – state pensions ($234 billion shortfall) and retiree health benefits ($73 billion shortfall). In a recent NPR report that laid out Pritzker’s entire policy agenda, pensions were addressed only once. His plan for them? Borrow more money.
Which brings us back to Rauner’s exit.
With him and his roadblocks out of the way, Springfield politicians can now return to the same schemes that got Illinois into this mess in the first place – championed under Madigan by Republicans and Democrats alike.
Like “re-amortization” plans that shove Illinois debts onto future generations. Or pension obligation bonds promoted under the “stabilization” banner. And higher taxes, of course. Progressive and sin taxes are all in play.
None of those will fix Illinois’ problems. They’ll all just kick the can down the road, at best.
Exuberant Illinoisans can celebrate Rauner’s exit if they want, but they should still demand from Pritzker the spending and structural reforms Illinois so desperately needs – including a constitutional amendment for pensions.
The state is still on the same ugly path it’s been on for decades. Without reforms, expect Illinois’ financial free fall to continue and more of its sober-minded residents to flee.
Read more from Wirepoints about Illinois’ crises in the pre- and post-Rauner era:
- Ten trends dragging Illinois toward insolvency and what to do about it
- Moody’s vs. Illinois politicians: $100 billion difference in pension debts
- Illinois’ other debt disaster: $73 billion in unfunded retiree health insurance benefits
- Attorney General Filings Summarized: Illinois is Screwed (and Nuts)
- New Census Data: Record Illinois Population Loss, 5th Straight Annual Loss