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The peril of deliberate budgetary inaction

Friday, Mar 31, 2017

* CBS 2 interviewed University of Illinois at Springfield political science professor emeritus Kent Redfield about the impasse

Redfield said a lot of knowledgeable people in Springfield believe Gov. Bruce Rauner and Democratic lawmakers won’t settle on a state budget before the next election in 2018.

“It’s very, very difficult to be both in campaign mode; and then be trying to put together the kind of negotiation, compromise, sharing of the pain, and extending the kind of trust that makes these bargains,” he said.

The state’s current backlog of $14 billion in unpaid bills could balloon to $28 billion by the time the next governor and Illinois General Assembly are sworn in in January 2019.

“A new governor in 2019, whoever that is, could be in the middle of a fiscal year that has no budget, but would be looking at $28 billion of unpaid bills,” he said.

The Democratic candidates need to start talking more about this other than just yelling at Gov. Rauner. Surely, they don’t want to inherit such a fiscal disaster. The tax hikes and cuts needed to extricate ourselves would be beyond punitive. And it’ll be even tougher to accomplish if Illinois bonds are downgraded to junk status by then.

* Meanwhile, the Northwest Municipal Conference sent a bulletin to its members today about Sen. Bill Brady’s new budget proposals…

Two of these bills are of particular concern to local governments. Senate Bill 2181 (Sen. Bill Brady) includes a 10% reduction in the LGDF beginning on July 1, 2017. Senate Bill 2178 (Sen. Bill Brady), creates the Budget Management and Control Act and grants the Governor extraordinary emergency powers to transfer funds and dictate cuts. The legislation does not make any specific cuts to state collected local government revenues; however, provides that the Governor could transfer up to $1 billion from “any funds held by the Treasurer” to the General Revenue Fund. Consequently, the bill could subject critical local revenues such as the LGDF, Sales Tax, Use Tax, the Personal Property Replacement Tax (PPRT) and others to reallocation.

The NWMC strongly believes that state should not look to solve its budget problems with local revenues. Such an action would merely shift the burden to local governments. If these revenues are lost, local leaders will be left with difficult choices: defer infrastructure investments; further reduce services upon which our residents and businesses rely; or, raise revenues (although multiple legislative proposals seek to eliminate this option, leaving severe cuts and service reductions as only ways to respond). These are completely unacceptable choices to impose on fiscally responsible communities.

Look, if people are gonna get haircuts, then everybody should take one.

The problem here, of course, is that Gov. Rauner wants to take state money away from local governments while simultaneously imposing a permanent, or at least 5-year property tax freeze. That’ll be difficult, to say the least, without radical reductions to employee rights, pay and benefits.

- Posted by Rich Miller        

27 Comments
  1. - wordslinger - Friday, Mar 31, 17 @ 12:00 pm:

    Obviously, “radical reductions to employee rights, pay and benefits” is the idea. Squeeze the beast is an objective in and of itself, but it serves the long-term goal.


  2. - 47th Ward - Friday, Mar 31, 17 @ 12:12 pm:

    ===The Democratic candidates need to start talking more about this other than just yelling at Gov. Rauner.===

    Agreed. But let’s be clear: Governor Rauner tubed the only deal with a chance of bi-partisan support. Yelling at him reminds everyone that HE IS THE ONE WHO IS RESPONSIBLE for the current mess.

    Did he inherit a mess? Sure. But he has only made it worse, much much worse. That’s worth yelling about.


  3. - Juvenal - Friday, Mar 31, 17 @ 12:17 pm:

    “Giving everyone a haircut” is a politically expedient solution, but is part of what got us in this mess.

    Across the board cuts impact good and bad program alike. Until the good programs are so woefully underfunded that they are not any good any more.

    Set priorities. Identify the programs that most efficiently achieve those outcomes. Cut everything else 100 percent.


  4. - Shemp - Friday, Mar 31, 17 @ 12:18 pm:

    Local cuts would be a lot easier without mandatory bargaining for minimum manning, increased employee contributions for fire/police pensions, combined fire/police pension funds, sensible prevailing wage rules, eased engineering submittal requirements for MFT funds, freezing current limits for sewer effluent, easing IDOT enforcement of retrofits such as ADA compliance, and somehow restructuring interest arbitration so cities aren’t constantly having to keep up with the Joneses, even if the Joneses are in a different situation. There’s a lot out there, but it’s certainly not labor friendly stuff (nor IDOT friendly) where the savings would come from.


  5. - Lester Holt's Mustache - Friday, Mar 31, 17 @ 12:18 pm:

    ==wants to take state money away from local governments while simultaneously imposing a permanent, or at least 5-year property tax freeze==

    Why in the world would any local official support this guy in 2018 when he wants to make their jobs that much more difficult? Considering his poll numbers, even he can’t afford to fund primary challengers against every state AND every local official in the entire state along with propping up the entire party apparatus. As a republican, I’d let this guy sink - a democratic governor would at least let me to operate without trying to hamstring my operations.


  6. - northernwatersports - Friday, Mar 31, 17 @ 12:21 pm:

    IMHO, Every government agency below the State in hierarchy (County, Township, Municipal) better start planning (budgeting) for the massive cost shift already envisioned by Gov. R, AS WELL AS Dems. Financially speaking, in 2+ years, we’ve created a problem that will take 20+ to dig out from. This current episode only adds to the already dismal outlook on pension under-funding and direct services going forward. It will get more painful as the years drag on with the consequences of this stubbornness.

    Cost shifting pensions to local schools and community colleges…reduced or eliminated LGDF funds, as well as direct tax increases across the board are the most direct, effective and realistic solutions. I advocate for budget cuts as well, but some bitter medicine for sure.

    No finger pointing either. We crossed that line LAST YEAR. Doesn’t really matter who gets to wear the jacket. Voters have short attention spans. The party that ‘wins’ future elections (until about 2040) will be left to wear the jacket each year as the election cycles ramp up.
    Who in their right mind would literally ask for that headache by becoming a political candidate. Masochists only need apply.


  7. - Honeybear - Friday, Mar 31, 17 @ 12:35 pm:

    Thank you Shemp for elucidating EXACTLY who the Governor is trying to destroy and how he’s going to do it.

    You just totally made my case to leadership so much easier!

    And knowing how defensive you’ve been about tax incentives in the past I can now strongly advocate to labor leadership where we need to attack.

    Bless you!


  8. - Anonymous - Friday, Mar 31, 17 @ 12:40 pm:

    “Across the board cuts impact good and bad program alike.”

    What about spending required by the various court orders, consent decrees, etc. that the State of Illinois is party to? How much, if any, can they be included in any across the board spending cuts even if some of them represent ‘bad’ spending?


  9. - unspun - Friday, Mar 31, 17 @ 12:51 pm:

    —Look, if people are gonna get haircuts, then everybody should take one.

    The problem here, of course, is that Gov. Rauner wants to take state money away from local governments while simultaneously imposing a permanent, or at least 5-year property tax freeze. That’ll be difficult, to say the least, without radical reductions to employee rights, pay and benefits.—

    The state needs to be really careful about cutting distributions to local governments. The property tax freeze proposal is really challenging in and of itself. For smaller, more rural cities and villages a cut in LGDF could be devastating. Many are “landlocked” by farms, which are taxed at a low rate, and have little opportunity for growth. Most also rely heavily on LGDF due to their low sales tax bases. We don’t want to create the same problems in our towns that we’re trying to solve in school funding…


  10. - RNUG - Friday, Mar 31, 17 @ 1:14 pm:

    == What about spending required by the various court orders, consent decrees, etc. that the State of Illinois is party to? How much, if any, can they be included in any across the board spending cuts even if some of them represent ‘bad’ spending? ==

    You’re not going to be able to cut any actual consent decree spending in response to court ordered negotiations, because the State agreed to go that spending. Example of that would be the State having agreed to investigate reported child abuse within a specific period of time, or a specific level of manpower at a facility to ensure public safety.

    Same for a lot of Federal programs; if you want the Fed money you have to do certain things to get it, including some level of matching funds most of the time.

    Spending orders that exist as a result of not having a budget could be cut in an actual budget.

    So the Governor could order each agency to cut spending 10% across the board, but the actual cut by specific program may be anywhere from 0% (mandated requirement) to 100% (elimination of a program).

    Across the board cuts sound good, and can sometimes even more or less achieve the savings objective, but the actual impact can be uneven.


  11. - up2now - Friday, Mar 31, 17 @ 1:20 pm:

    “…radical reductions to employee rights, pay and benefits.” As far as Rauner is concerned, this is not the problem, this is the solution.


  12. - Living it daily - Friday, Mar 31, 17 @ 1:31 pm:

    Just bet he would love to spend the pension fund on his giveaways, maybe we could have another It program here simultaneously and really go in the hole, but if only he had the finger on the pension funds, oh I do mean all 5 of them Gers included. yummy!


  13. - anon2 - Friday, Mar 31, 17 @ 1:35 pm:

    === “It’s very, very difficult to be both in campaign mode; and then be trying to put together the kind of negotiation, compromise, sharing of the pain, and extending the kind of trust that makes these bargains,” he said. ===

    An irrefutable point worth keeping in mind when apportioning blame.


  14. - cdog - Friday, Mar 31, 17 @ 1:56 pm:

    The Gov accuses the opposition of being savage destroyers wielding rolls of duct-tape.

    Kind of a cute metaphor compared to the metaphors more appropriate to him…

    Rauner’s conscious choice to ignore reality and stay in creepy campaigning mode is truly beginning to weird me out.

    Ignore the strange man on TV with the invalid argument, the fancy veto pen, and the unlimited resources to ruin any who go against him! /s


  15. - Oswego Willy - Friday, Mar 31, 17 @ 1:56 pm:

    ===The Democratic candidates need to start talking more about this other than just yelling at Gov. Rauner. Surely, they don’t want to inherit such a fiscal disaster. The tax hikes and cuts needed to extricate ourselves would be beyond punitive. And it’ll be even tougher to accomplish if Illinois bonds are downgraded to junk status by then.===

    To this…

    Where you really can see how terrible the Illinois Democrats have been these past two years, look no further that ZERO groundwork to the messaging exists, and in reality, all Dem gubernatorial candidates, thanks to an inept Dem Party message, must build from scratch, with Rauner having a 2+ year head start.

    Ugh.


  16. - wordslinger - Friday, Mar 31, 17 @ 2:07 pm:

    It should be recalled that at the beginning of this misanthropic nonsense in 2015, Rauner vetoed the approp. of the previously agreed upon distribution of income tax revenue to local governments.

    It was only a threatened revolt by some House Republicans that made him give way.

    The game plan is transparent: take local income tax revenue, put on a property tax freeze, gut collective bargaining, abolish prevailing wage, get rid of fair share dues, allow for muni bankruptcy.

    Put them all together, add the supportive propaganda of shills like IPI and Katrina, and it’s an obvious assault on local public employee unions.

    What’s not to get? It’s clear linear thinking to the goal.


  17. - NorthsideNoMore - Friday, Mar 31, 17 @ 2:17 pm:

    Rauner will message as he has from the start. blame the long term issues created by previous Dem govs and the GAs have cretated a mess that has to be un-wound. The Guv has said it will be painful and not gonna be pretty….he wasn’t lying. Either way they need to do what is neccessary to solve this mess. raise taxes pass a few reforms make a few cuts move on. Oh and fund ALL Educational levels in Illinois !


  18. - RNUG - Friday, Mar 31, 17 @ 2:30 pm:

    == The Gov accuses the opposition of being savage destroyers wielding rolls of duct-tape. ==

    Every time I see that ad, my thought is what’s with pulling the duct tape? The audio / visual is just distracting.


  19. - Anon - Friday, Mar 31, 17 @ 2:34 pm:

    ===The problem here, of course, is that Gov. Rauner wants to take state money away from local governments while simultaneously imposing a permanent, or at least 5-year property tax freeze.===

    I’ve found it hard to put that into layman terms without using expletives.

    But it just looks like a billionaire thinks he doesn’t need government and therefore neither do you.


  20. - Lucky Pierre - Friday, Mar 31, 17 @ 2:42 pm:

    Shifting the cost of pensions for the portion of salary higher than the Governors back to local government is just the first step reigning in the excesses that have contributed to our worst in the nation pension funding

    It is much easier to be generous with someone else’s money than your own.

    If squeezed school districts will cut the fat first in terms of overgenous pension pickups Fortune 500 companies figured out years ago were unsustainable


  21. - Langhorne - Friday, Mar 31, 17 @ 2:59 pm:

    Words–i have a plan for a balanced budget.

    Deeds–Trench warfare is fun. Energized by the battle. Winning. Double the bill backlog?? So what, It will make the collapse all the more spectacular. Downgrade to junk? Bigger fees for bond houses. No paychecks wout approp? So pass an approp. Thats what vetoes are for.


  22. - wordslinger - Friday, Mar 31, 17 @ 3:10 pm:

    LP, call those Deloite cats for an ERP upgrade and get in the ballgame.

    Muni governments fund their own pension contributions to IMRF.

    The subject of the thread is muni govrernments, not school districts outside of Chicago and TRS contributions.

    Poor Boss Rauner, good bots are hard to find.


  23. - PDJT - Friday, Mar 31, 17 @ 3:31 pm:

    “It’s very, very difficult to be both in campaign mode; and then be trying to put together the kind of negotiation, compromise, sharing of the pain, and extending the kind of trust that makes these bargains,”

    And there in lies the rub. This Governor has never left campaign mode. He is trying to goad the Democrats into saying that taxes need to be raised, something his budget gooru even admitted. If they even hint that, as Madigan did about a year ago, he jumps all over them. But if Rauner really believes the budget can be balanced with cuts alone he’s not sayin’ where.

    We need someone who knows deals have to be made, and sometimes that means not using political ammunition in exchange for participation in that deal.

    Nobody believes this governor is capable of that.


  24. - Oswego Willy - Friday, Mar 31, 17 @ 3:35 pm:

    ===“It’s very, very difficult to be both in campaign mode; and then be trying to put together the kind of negotiation, compromise, sharing of the pain, and extending the kind of trust that makes these bargains,”===

    You run TV ads against your partners in comprising, you call them names, question their honestly, call them corrupt, even some that maybe on your own side…

    … you expect words not mattering?

    This isn’t just double-talk, this is paying millions for a narrative, then saying it’s just “idle political talk”

    Never worked before. Actually no one “tried” before they knew it wasn’t going to work.


  25. - jim - Friday, Mar 31, 17 @ 3:50 pm:

    You’re right, Rich. It’s an insane approach, one that Madigan doesn’t want the Democratic governor to inherit but one he’s willing to let the Democratic governor to inherit if it means he can say ‘no’ to everything Rauner has proposed. Politics always trumps policy in Illinois.


  26. - walker - Friday, Mar 31, 17 @ 4:29 pm:

    Easiest thing in the world for a state-level politician to run on a local property tax freeze. That political scam has been around for years.

    Been waiting for the local Republican office holders across the state to jump up and say “Wait. What?”


  27. - Truth - Friday, Mar 31, 17 @ 4:41 pm:

    Blah blah blah blah same story different headline don’t you get it these rich yes rich politicians could give a care less about the people at the bottom


Sorry, comments for this post are now closed.


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