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Illinois and New Jersey - Closer than you might think

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* My syndicated newspaper column this week takes a look ahead at the governor’s budget address, both here in Illinois and in New Jersey…

Decisions made by a governor in a far away but strikingly similar state might actually influence our election right here in Illinois.

Just a week or so after Gov. Pat Quinn lays out his state budget blueprint next month, recently elected New Jersey governor Chris Christie will do the same.

Illinois and New Jersey have more in common than you might think. They’re not exactly alike by any means, but they’re both Democratic-leaning states that have elected Republican governors in the past. They both have unemployment troubles, although New Jersey is better off than us right now, and they both have horrible state budget problems.

Illinois’ budget crisis is somewhat worse than New Jersey’s, but they’re similar enough that the two governors’ budget plans will undoubtedly be compared. Illinois’ budget deficit for next fiscal year, which starts in July, is projected at somewhere around $13 billion. New Jersey’s upcoming red ink total will be about $11 billion. The two states’ operating budget sizes are about the same.

Christie, a conservative Republican, already has ruled out any tax hikes to solve the problem and has vowed to allow a corporate income tax surcharge to expire. The liberal Democratic Quinn, on the other hand, still is talking about raising the income tax so he can avoid as many cuts as possible.

A few days ago Christie issued an executive order declaring a “state of fiscal emergency.” He froze school aid to districts that were running at least a 2 percent surplus, ordered a state spending freeze and reserved for himself emergency powers needed to balance the current fiscal year’s budget, among other things. The result, according to Christie, was $2.2 billion in savings - which matches his current deficit.

Illinois’ current fiscal year deficit of $5 billion is much higher than New Jersey’s, but Gov. Quinn has not yet taken any dramatic public action - although the state has quietly shut off the money spigot to just about anything outside of employee payroll, general school aid and most Medicaid reimbursements. Almost nobody else is getting a check. That’s why universities are owed hundreds of millions of dollars, for instance, state workers are being forced to pay up front for doctor visits and legislators are discovering that their district office landlords are being stiffed.

So far, the reaction to Christie’s actions in New Jersey has been mixed. The local media has mostly gushed over Christie’s “bold” executive order, but the Democratic-controlled Legislature was upset that the governor made the move without consulting them, and various interest groups are beginning to speak out in anger.

What we are almost certain to get next month is a stark contrast in approaches. While Quinn likely will propose big cuts in his budget plan, including slashes to agency operating expenditures and the “suspension” for a year or two of a large number of state programs, new revenue sources will dampen the blow. New Jersey’s Christie, on the other hand, will probably rely solely on steep cuts, “reforms,” payment deferrals and borrowing.

So far, at least, Christie’s promises and rhetoric match up pretty well with Sen. Bill Brady, who appears to be the presumptive Republican nominee for governor here.

Brady has said if elected he would cut taxes by at least a billion dollars, “reform” Medicaid to save as much as $1.8 billion, cut pension benefits and make big state agency cuts across the board.

If Christie is successful in putting together a budget that isn’t horrifically Draconian, Brady can point to that example as something he could follow.

However, I’m not sure that Christie can actually pull it off without coming across as too severe. The projected New Jersey budget deficit is more than a third of the state’s entire operating budget.

But, hey, New Jersey isn’t Illinois, so I won’t even pretend to know how that state runs. Its population is about a third less than ours, yet its operating budget is just as big and it has more state employees, so there seems to be a lot more room to cut over there.

If Christie does somehow succeed, Quinn’s cut, defer, borrow and tax plan probably will come under fire. If, on the other hand, Christie’s budget is repulsively retrograde and doesn’t stand the test of time, Quinn can claim some justification for his own approach, and Brady’s promises could be undermined.

Thoughts?

posted by Rich Miller
Monday, Feb 22, 10 @ 9:37 am

Comments

The other benefit of Christie’s approach is that it gives you hope that you can avoid this sort of problem in the future.

Does Quinn’s?

Comment by Pat collins Monday, Feb 22, 10 @ 9:47 am
So, what is the Illinois legislature’s plan to balance the budget? Unless they start sticking their necks out instead of hiding behind Quinn, we will have no plan.
Senator Trotter said last week we don’t have a spending problem, we have a revenue problem. Isn’t it both? Where is the legislative leadership? Getting reelected is not a plan. It is more of the same.
Quinn can’t do this by himself. He has to get some cooperation. The Democratic legislators should agree not to criticize his Budget Address would be a beginnning. Then call a special session just on the budget, and actually meet to propose something as soon as possible. This should not be left for a May 31st vote.

Comment by Tom Joad Monday, Feb 22, 10 @ 9:52 am
very good column. good to see a journalist with a brain in Illinois. I am in favor of starving the springfield beast. the less rope they have the better.

Comment by shore Monday, Feb 22, 10 @ 9:55 am
I haven’t had a chance to read up on this, but does New Jersey have a similar debt as Illinois? It would be great to balance the budget here, but that doesn’t address the entire problem.

Comment by Small Town Liberal Monday, Feb 22, 10 @ 10:01 am
I’m an idiot, little too much to drink last night. Somehow missed the paragraph that you covered that.

Comment by Small Town Liberal Monday, Feb 22, 10 @ 10:01 am
I am getting increasingly frustrated with the lack of light you are willing to shed on Mike Madigan. The entire article assumes this will be Quinn’s budget. Mike Madigan has drafted each of the past 7 budgets and will draft this one. Until we find some media who will call out Madigan for ruining this state and educate the public that he is the man behind the curtain, Illiinois will continue to founder.

Comment by Anonymous Monday, Feb 22, 10 @ 10:02 am
Does NJ’s constitution grant its governor “emergency” powers that the Illinois Constitution doesn’t?

Comment by Secret Square Monday, Feb 22, 10 @ 10:05 am
It’s silly for the Repubs to talk about Medicaid reform until we have a better idea of how national health reform will play out this year. This is especially true since any major reform is unlikely to happen immediately in Illinois. Under the WH’s latest proposal there would be substantial increases in federal Medicaid payments to the states to cover proposed expanded coverage. Since Illinois already has substantial expanded coverage for families with kids, we need to know how this proposal might affect Illinois. Would we get more federal reimbursement for already-covered populations? Would it even make fiscal sense to move to managed care. And so on.

Comment by cassandra Monday, Feb 22, 10 @ 10:13 am
The worst thing we can do in Illinois is raise taxes - for two reason. One, tax increases are disincentives to businesses and families looking to live here. Doing anything that could remotely be perceived as anti-business in this economic climate is just another nail in the coffin.

Second, if we raise more revenue to fix this problem through a tax increase, we don’t address the fundamental debate over how big state government really needs to be and how much government we can realistically afford. Instead, we reward those in power that have brought us to this point. When Mom and Pop can barely afford to pay the mortgage, not only do they not go out and buy a flashy new car, they look at what they’re CURRENTLY spending on and figure out what can be cut out. Sometimes we have to give up things we really like, but if you can’t afford it, you can’t afford it. THAT is what Illinois politicians have lost sight of since the “bad” budget days of Governor “No” with Jim Edgar.

Comment by Amuzing Myself Monday, Feb 22, 10 @ 10:17 am
Saw Christie on one of the major talk shows. He indicated the fiscal deficit is twice what Corzine had indicated. At a per person, basis it was far worse than Illinois. He is being forced to consider simply not paying any current bills the state has. Essentially declare self-bankruptcy. Business Week had an article where cuts to NJ school districts would be no larger than the district’s existing revenue surplus. So if you ran a business operation where you saved money and paid your bills, you lose. Sounds reasonable?

http://www.businessweek.com/news/2010-02-11/christie-declares-fiscal-emergency-as-new-jersey-deficits-loom.html

Comment by zatoichi Monday, Feb 22, 10 @ 10:19 am
How many times are we going to have to remind tax-haters that Governor Edgar reaped the fruit of a tax increase?

Comment by Old Shepherd Monday, Feb 22, 10 @ 10:23 am
===the lack of light you are willing to shed on Mike Madigan===

Then you’re not paying attention.

Comment by Rich Miller Monday, Feb 22, 10 @ 10:25 am
Christie has four years before facing re-election. Quinn has now.

Quinn has to play politics with this year’s budget regardless of reality. So his budget will only reflect a view of political reality, not economic.

This sets our state a year behind New Jersey, although we share a similar budget crisis. AND that is a year, IF Quinn doesn’t get elected.

What do you believe in? A hard fall with a brighter tomorrow, or a soft fall without a brighter tomorrow? You pick the pain in 2010.

What is remarkable is the fact that New Jersey voted in a Republican to begin this task. Christie wasn’t a state senator from Cape May. He was seen as knowing the population centers of his state, and knowing where they stood politically and culturally. For Brady to be comparatively similar would be if Brady was from DuPage and had Hoffman’s record of cleaning up political corruption.

Brady is no Christie.

Comment by VanillaMan Monday, Feb 22, 10 @ 10:26 am
Rich, don’t we have enough problems to fret about to start worrying about New Jersey?

Comment by fedup dem Monday, Feb 22, 10 @ 10:56 am
“Brady is no Christie.

At least he’s no Pat Quinn either. This accidental Governor has been in office for over a year now, and has only inreased the state’s debt several times over. And now he’s buying into a scheme to pass a no tax increase budget just to get through the election? He’s practically guaranteeing a Brady victory in the fall once the general voting public sees this charade.

Comment by N'ville Monday, Feb 22, 10 @ 10:56 am
Secret, New Jersey governor is probably the most powerful state office in the country.

The governor is the only state, state-wide elected official and appoints the secretary of state and attorney general. All those jobs come in handy when dealing with your legislature.

Comment by wordslinger Monday, Feb 22, 10 @ 10:57 am
Quinn had his chance last year to be decisive on the budget and fumbled the ball. He since has quietly been not paying bills instead of cutting back. The legislature treated the issue as a hot potato and merely punted the mess in Quinn’s direction, an even worse action.

The proposed tax increase Quinn keeps pushing won’t solve the deficit which has been building over a period of 7+ years. Some long term solutions need to be employed on the spending end of things in this State. The fear is that the tax increase will embolden the spenders to keep on spending and increase spending. Based on past behavior, those fears are well founded.

Rearranging deck chairs on the Titantic is not the solution here. Nor is a quick fix. Governor Christie seems to have the right ideas.

Comment by Louis G. Atsaves Monday, Feb 22, 10 @ 11:06 am
“This accidental Governor has been in office for over a year now, and has only inreased the state’s debt several times over.”

This is so true, and this doesn’t bode well for Quinn as a fiscal steward or otherwise. I think you’d be hard pressed to find anyone who can successfully and truthfully argue against this key point.

Comment by Will County Woman Monday, Feb 22, 10 @ 11:13 am
I lived in New Jersey for several years. I would have to say that NJ and IL are much more alike in terms of income/education distribution highs and lows, school district results inequities, and historic conservative/liberal leanings–coupled with rampant corruption–than many outsiders may realize. NJ is suffering mightily from its proximity to NYC and the loss of financial and publishing industry jobs at all income levels, which has seeped into nearly all other areas of NJ business revenues, real estate, and has especially affected state tax receipts.

I still stay in contact with a number of friends and former colleagues who live in NJ. They are genuinely scared for their state’s survival and are generally supportive of Gov. Christie’s actions (so far) since he promised, and they voted for, a drastic course correction. JHis dramatic executive order is seen as both real and symbolic. It has been said that on a battlefield courageous leadership trumps all; soldiers’ politics and religion become temporarily immaterial when survival is the only thing that matters. It appears NJ. may have reached that point. Illinois, not so much.

Comment by Responsa Monday, Feb 22, 10 @ 12:06 pm
OK, then, how about some *evidence* that he “has only increased the state’s debt several times over”?

Comment by Ray del Camino Monday, Feb 22, 10 @ 12:10 pm
ray,

if i read understood n’ville correctly, for starters…

1.)the generous state bail out loan to the cta to help avoid $3.00 one fares, which would have hurt daley’s re-election prospects as angry cta riders would be simmering all year and chomping at the bit to vote against daley in 2012

2)the fy10 stopgap

3) quinn’s other borrowing

these acts of bad action/inaction on Quinn’s part will cost taxpayers more in the long run.

Comment by Will County Woman Monday, Feb 22, 10 @ 12:31 pm
With all do respect any analysis that consideres Quinn a major player in the budget is a falacy. Madigan is the only person that matters.

Second I take particular issue with the assertion we should not deal with Medicaid until the Healthcare debate is over. We have one pediatrician in the county where I live. She has had to stop taking Medicaid patients because the state is so far behind she was going to have to close her doors. I don’t like a lot of Government programs, but I don’t want to tell 3 year old kids to wait on Mr. Hope and Change to go see the doctor.

Comment by the Patriot Monday, Feb 22, 10 @ 1:00 pm
So,,,Patriot, your pediatrician friend would do better under the Republican proposal for shifting Medicaid to managed care?

Comment by cassandra Monday, Feb 22, 10 @ 1:21 pm
First, she is not my friend. Second, haven’t advocated the Republican position. Third, it isn’t about what is better for her. Ignoring the problem until the Feds fix it will mean no treatment for lots of low income kids for a year or more. I am may be the most conservative person on the planet, and I don’t believe that is acceptable.

Just to clarify, my kids have health insurance so it will not affect me personally. But are democrats really advocating we don’t even debate some Medicaid reforms until the Feds fix it? Really?

You see what democrats have lost is that when you promise everybody government programs, they all end up being underfunded and sinking. If you are a pro social program liberal, you are begging for a balanced budget. After 8 years of a completely democrat controlled state, we will have less social prgrams then we did when the Republicans were in charge, that is a fact!

I don’t care what they put in the budget. These programs can’t run on a budget, they need money which the state is not sending.

Comment by the Patriot Monday, Feb 22, 10 @ 2:21 pm
Well, a first big issue is that Illinois’ Governors have very few emergency powers when it comes to a fiscal crisis. We would always talk about it but never really got anywhere because the crisis would be reasonably dealt with and no one wanted to give the Governor emergency powers when there was no crisis.

Comment by steve schnorf Monday, Feb 22, 10 @ 3:24 pm
New Jersey is headed toward reform and just created the office of Lt. Gov. after having none all these years. Illinois is talking about gutting it because Democratic primary voters “chose wrong” this month.

The comparison was valid last year, but not this year.

Comment by T.J. Monday, Feb 22, 10 @ 3:25 pm
Rich, great column.

Comment by Steve Monday, Feb 22, 10 @ 4:15 pm