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Three ideas to break the gridlock

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During past showdowns between Illinois governors and legislative leaders, the problem usually wasn’t a short supply of solutions, but a lack of political will to reach an agreement. Where there’s a will, there’s a way.

Once again, I’ve seen little willingness this summer by either side to engage in truly fruitful negotiations to end the Statehouse stalemate.

Republican Gov. Bruce Rauner continues to say he won’t talk about the budget until Democrats in the Illinois General Assembly kill off some things near and dear to their hearts: no-fault workers’ compensation, union collective bargaining, prevailing wage, etc.

Part of the problem this year is that neither side appears to see a way out of this mess. Both sides have entrenched themselves so deeply that they are not considering new ideas. Here are three suggestions to get them going.

Click here and read the rest before commenting, please. Thanks.

posted by Rich Miller
Tuesday, Jul 21, 15 @ 10:06 am

Comments

The first two points RM makes are ideas truly worth serious consideration and could be done, or some form thereof, if both sides really wanted to- which they seemingly don’t.

The 3rd point on prevailing wage is something to throw out there to get the ball rolling but it seems a little vague to me to consider.

Comment by Federalist Tuesday, Jul 21, 15 @ 10:14 am
As usual, Rich, you’re spot on. Your workman’s comp suggestion makes sense. A way to gradually shift local pension costs to local government is needed. And I never understood the fixation on prevailing wage. First, construction constitutes a fraction of local government costs and labor is a fraction of that. Second, there’s other reasons local construction is expensive. But if compromise gets us out of this impasse, then why not.

Of course politics is seldom sensible.

Comment by Sir Reel Tuesday, Jul 21, 15 @ 10:18 am
Rich your comments seem to reasonable for Madigan and Rauner to consider. What fun would that be for them?

Comment by Very Fed Up Tuesday, Jul 21, 15 @ 10:19 am
Flood Madigan’s district with mailers etc etc and find an opponent; ie, beat Madigan at the polls in his own district and spare the state the drama.

Comment by Idea no. 4 Tuesday, Jul 21, 15 @ 10:22 am
Best thing you have ever written. Good job!

Comment by Anonymous Tuesday, Jul 21, 15 @ 10:23 am
Rich,
You wrote a very good article. Unfortunately, Rauner is still in campaign mode instead of actually wanting to actually do his job. The state leaders could budge on the prevailing wage rate, but on the flip side Rauner needs to be more truthful in his approach to collective bargaining. He shouldn’t announce that he has reached an agreement with the Teamsters in the city of Chicago, when he then files a bill to basically strip collective bargaining rights from all government employees in his pension reform agenda. He should also talk about what shared sacrifice actually is, what he is expecting from everyone, not just certain groups of people. Finally, he should quit using people who serve in public safety roles as an exception to various reforms- playing people against one another doesn’t work.

Comment by Anonymous Tuesday, Jul 21, 15 @ 10:25 am
===Flood Madigan’s district with mailers etc etc and find an opponent; ie, beat Madigan at the polls in his own district and spare the state the drama.===

Please send me your information so I can mail the “Fire Madigan, 2.0″ Catalog directly to you. Please.

To the Post,

Rich lays out the “3″. It’s thoughtful, it makes sense politically, and gives the “exit ramps” both sides keep passing at 112 mph.

Thanks Rich.

Comment by Oswego Willy Tuesday, Jul 21, 15 @ 10:26 am
Idea no. 4 - I’m sure the voters in Madigans district know how disliked he is throughout the state but until the pork stops flowing into his district they will keep voting him in no matter what.

Comment by Very Fed Up Tuesday, Jul 21, 15 @ 10:30 am
Idea no. 4, have you ever been to MJM’s district? You could spend $10 million there and not touch him.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:30 am
Rich, workers compensation values are already down by 25% to 40% because of a downward shift in awards from Arbitrators and the Commission. The Turnaround agenda is already being felt in the Work Comp arena. Rauner has done an excellent job of implementing the turnaround agenda at the Commission to the detriment of injured workers.

Comment by anon123 Tuesday, Jul 21, 15 @ 10:31 am
===workers compensation values are already down===

It’s not showing up in insurance costs.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:33 am
There is a Federal prevailing wage law called the “Davis-Bacon Act”. This is the prevailing wage law that must be used when federal funds are used in a project. Essentially, if there is $1 of federal money in a project, their rules govern.

Eliminating the prevailing wage law for those government projects that do not use federal funds would create confusion for not only the contractors but the local governments.

Having dealt with projects with federal and non-federal funds, it is confusing enough without adding another source of problems.

Comment by Huh? Tuesday, Jul 21, 15 @ 10:34 am
Thanks for trying to kick-start things with some thoughtful proposals. I hope the right folks are reading.

Comment by Agricola Tuesday, Jul 21, 15 @ 10:34 am
===would create confusion for not only the contractors but the local governments===

Meh.

Not a good enough reason.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:36 am
Rich your five year wage and benefit freeze for public sector employees seems like an immediate solution. Except given the outlook for our state it will be followed by additional freezes in order to keep costs down because the pension debt is not just going to disappear. In year 6 public sector workers would be looking to make up lost ground from the freeze.

Eventually it going to have an impact on the quality of public sector employees if it lasts long enough.

Comment by Rod Tuesday, Jul 21, 15 @ 10:37 am
You are absolutely correct. Profits are rising for the insurance companies because costs are down.

Comment by anon123 Tuesday, Jul 21, 15 @ 10:38 am
#1- makes sense to everyone but Rauner, #2- apparently he doesn’t need because he negotiated 0% raise for 4 years with teamsters, #3-not sure how this would work with home builders doing so many different building functions and how they would account for their salaries.

Comment by The Colossus of Roads Tuesday, Jul 21, 15 @ 10:38 am
Could you explain what are the Blagovich work comp changes that could be dumped?

Comment by Redeft Tuesday, Jul 21, 15 @ 10:38 am
The third point on prevailing wage is spot on. I have been suggesting this to our state representatives for 2 years now. Give the locals the ability to go to open market on say jobs less than $100,000 or even $50K. It would give the locals so much more to work with and the unions barely pay attention to these small jobs. I had a small job - painting interior offices. It was about a $5000 dollar job. It had to go prevailing wage which made it $8000. I was not even able to hire a local painter because he could not pay the wages regularly, the taxes on the wages regularly, therefore I could not hire a local small business that was right in town. It makes no sense. Put some limits on it, whatever those limits are and see the results. The opponents fear something like that would be the start of a slippery slope and I get that but sheesh I have money to spend with small mom and pop businesses and can’t spend it because of prevailing wage.

Comment by allknowingmasterofracoondom Tuesday, Jul 21, 15 @ 10:38 am
===five year wage and benefit freeze===

I didn’t say freeze them, I said cap their growth.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:38 am
===#3-not sure how this would work===

You exempt projects from prevailing wage based on some sort of TBD multiple of county median new home prices. Below that TBD multiple, no prevailing wage. Above that, prevailing wage.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:43 am
Excellent column. But, as you say, there is not yet a will to compromise. When they get to that point, as they eventually will, this is a good place to start… if not the specific ideas, at least the mind-set of looking for ways to get to “Yes” instead of looking for ways to stay stuck on “No”.

Comment by Harry Tuesday, Jul 21, 15 @ 10:43 am
Your three points would appear to take money from public employees, construction workers and injured workers.

Do you have any evidence that these are the causes of the state’s budget problems - and not, say, a broken tax system that doesn’t capture growth, especially in the service sector and at the upper end of the income spectrum?

Comment by Reality Check Tuesday, Jul 21, 15 @ 10:46 am
===what are the Blagovich work comp changes ===

https://capitolfax.com/2015/06/12/more-workers-comp-thoughts/

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:47 am
===Do you have any evidence that these are the causes of the state’s budget problems===

First, they are “a” cause.

Second, what I’m trying to do here is find some way to bridge the two sides. Without that, we’re just sitting around waiting for the inevitable meltdown.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:49 am
Rich,

What Rod said.

You are the truth and the way for Illinois politics.No other source of information can compare to this blog. That said I feel that the issue of a temporary wage freeze for State of Illinois employees is misguided and unfair. Management positions (especially those at a lower level have not had a decent raise since Blago took office. Contrary to studies funded by Koch brothers front groups (see Reboot Illinois) and the Tribune, Illinois employees at most levels are not richly compensated. For you to suggest the 5 year wage freeze seems to be conceding too much veracity to the 1 percent crowd. Generally if you say it I believe it, but in this case I think that the wage freeze is not a good idea

Comment by Niblets Tuesday, Jul 21, 15 @ 10:55 am
I am pretty certain that a deal could be worked out between Madigan/Cullerton and the business groups that satisfies all parties, perhaps based on some of these ideas.

But in my mind the obstacle to a deal lies with Rauner. First, it should be pretty clear to everyone by now that the only reform he wants is to pretty much take out public sector unions, and that he will compromise only on the method used to take them out.

Second, Rauner’s interests are his own interests and beliefs and they don’t necessarily match what the business community wants — or, at least, the business community’s bottom line. So while I think the point about the business community living with (what they think is) over-regulation as long as taxes were low is a good insight, it’s also a point that really doesn’t matter in this dispute. Rauner doesn’t believe that low taxes can compensate for certain regulations.

Last, Rauner has two blind spots. First is his cartoonish belief that Democrats like to vote for higher taxes, or that Democrats like to raise taxes for the sake of raising taxes. That’s just not true — it’s the services that can be provided that they desire. The other blind spot is that Rauner, like anyone who takes over a position of authority who is new, thinks he can do things better but has no understanding of why things are done the way they are done in government. Now, I think it is valid to say that Madigan (and to a lesser extent Cullerton) did not get the message sent by voters in November to change things clearly enough. But just like raising taxes for the sake of raising taxes is a bad idea, changing things just for the sake of changing things is a bad idea. Since Rauner can’t identify what needs to be changed and distinguish those areas from what is change for the sake of change, the discussion of “shaking up Springfield” is not going to go well.

Comment by the Other Anonymous Tuesday, Jul 21, 15 @ 10:55 am
Sir Reel says - “And I never understood the fixation on prevailing wage. First, construction constitutes a fraction of local government costs and labor is a fraction of that. Second, there’s other reasons local construction is expensive.” (emph added)

Perhaps you don’t understand it becomes you’re thinking about prevailing wage in the context of construction and labor.

When you think of prevailing wage in terms of how it helps unions stay in business (by helping their members afford union dues) then this fight becomes crystal clear.

Rauner seems to have a deep-rooted animus for hard-working middle class folks who exercise their 1st Amemdment rights to freedom of speech and freedom of assembly - ie, he really. really doesn’t like unions.

Comment by Ghostbusters Tuesday, Jul 21, 15 @ 10:55 am
Good ideas…especially the workers comp idea. I just doubt Madigan wants to make a any sort of compromise. I’ve seen nothing to this point to suggest otherwise.

“What the governor may not understand is that without a budget his government is extracting billions of dollars every month from taxpayers without putting much of that back into the economy via spending. If this impasse continues too long, the state’s budget deadlock could do more damage to the economy than anything allegedly caused by unions.”

I would wager that the VAST majority of those whose tax dollars are being “extracted” voted for Rauner for the very purpose of changing the way things are done in Springfield - particularly with the budget. Sure, sure there are many who pay taxes that oppose the governor. My point is that if you believe the average taxpayer is tiring of the showdown, I think you’re mistaken. Most of them don’t see it at all in their everyday lives. They will care when their taxes go up, they can’t get something they want or someone they’re close to is affected. Until then, it’s only the relatively small percentage paid by the government or dependent on government assistance that will pay any attention at all.

Would be a good exercise to get on the street and ask regular people some basic questions about what’s going on with the state budget. I’d bet many here would be shocked how few are not only not paying attention but are completely unaware - and likely prefer it that way.

Comment by Anon Tuesday, Jul 21, 15 @ 10:55 am
===For you to suggest the 5 year wage freeze===

I didn’t suggest a freeze. I suggested a cap on growth.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:56 am
This is good stuff and I believe the GA could come to terms, except for one thing: Rauner’s obsession with taking out the unions and collective bargaining. He won’t let it go. That’s why we’ll be here ’til Halloween.

Comment by Wensicia Tuesday, Jul 21, 15 @ 10:57 am
When the turnover due to resignation in state employees is higher than it is in the private sector, we will know when public sector wages are too low. And it probably varies with job classification…some are more competitive than others.

Comment by Six Degrees of Separation Tuesday, Jul 21, 15 @ 10:57 am
Got it. I thought you wanted to calculate wages, but a gross dollar amount makes sense. I change my vote on #3 to O.K.

Comment by The Colossus of Roads Tuesday, Jul 21, 15 @ 10:58 am
===He won’t let it go===

You might be surprised.

It’s not like I wrote this thing in a vacuum.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 10:59 am
The Governor also wants to move current Tier 1 employees into Tier 2. Why not a discussion on an ERI. All new employees would be hired as Tier 2 and at lower salaries. Pension would take a hit at the beginning, but the new Tier 2 employees could not draw their pension until age 67, their annuity is less (3% or one-half of the Consumer Price Index, whichever is less), and there is no rule of 85. State Employees taking an ERI have to pay for the years they buy, it’s not free. And yes the state will survive.

And it is legal, no constitutional issues.

Comment by SME Statee Payroll\Timekeeping Tuesday, Jul 21, 15 @ 11:00 am
===move current Tier 1 employees into Tier 2===

He hasn’t conditioned the pension stuff on the budget. So, it’s not a Turnaround Agenda item and therefore is ignored.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 11:01 am
First, they are “a” cause.

Do you have any evidence? For example, here in Illinois, public sector compensation is less than private sector compensation in comparable jobs. And if one wants to lower business costs for workers comp, why should it be taken out of workers instead of insurance companies?

Second, what I’m trying to do here is find some way to bridge the two sides.

In other words, there may be no evidence for it, but Rauner wants a pound of flesh?

Comment by Reality Check Tuesday, Jul 21, 15 @ 11:01 am
“Compared to their counterparts in Indiana, a neighboring RTW state, Illinois workers earned 12.8 percent more in average hourly wages in 2014. There is also no evidence that higher unionization rates are associated with slower income growth across Illinois. Moreover, if half of Illinois’ counties adopted RTW regulations, total labor income in the economy would fall by $1.3 billion throughout the state.

http://illinoisepi.org/countrysidenonprofit/wp-content/uploads/2013/10/The-Impact-of-Local-Right-to-Work-Zones.pdf

Comment by Liberty Tuesday, Jul 21, 15 @ 11:02 am
===if you believe the average taxpayer is tiring of the showdown===

Never said that, so it’s beside the point.

I’m not talking about campaign type stuff here, so you shouldn’t either.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 11:02 am
===Do you have any evidence?===

If you believe they are not “a” cause, when they absolutely do drive some costs up for both state and local governments, then I can’t help you, dude.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 11:04 am
My apologies. I was extrapolating on your “…doing more damage to the economy…” in a way you apparently didn’t intend. Forgive me for mistakenly getting the impression politics were involved in the discussion here!

Comment by Anon Tuesday, Jul 21, 15 @ 11:10 am
1. Convert DCEO grants to provide matching funding to companies that want to improve workplace safety and thereby reduce their work comp costs.

2. False canard. Republicans are even more opposed to the freeze than Democrats, even though it will send Chicago’s finances into a tailspin. And mayors don’t want a wage freeze, which probably wouldn’t be legal any way, as it would violate numerous collective bargaining agreements. Promise locals more money in the long run, like a share of the income tax and sales tax hikes, and you might find middle ground.

3. Prevailing wage: if local governments want to forego prevailing wage, 1) require them to pass an ordinance/resolution, 2) taxing body has to agree to forego all state revenue.

Comment by Juvenal Tuesday, Jul 21, 15 @ 11:17 am
Rauner may not have it all 100% correct or figured out to where it will work with a DEM controlled congress, however, He has the correct IDEA for turning Illinois around from being the worst state in the union to one moving up the line, bringing businesses back to IL that will in the long run help everyone in IL through economy growth and job creation.

Comment by Allen D Tuesday, Jul 21, 15 @ 11:17 am
and I would like to add, that I liked the Article too Rich.

Comment by Allen D Tuesday, Jul 21, 15 @ 11:18 am
===Rauner may not have it all 100% correct or figured out to where it will work with a DEM controlled congress, however,…===

Slow down, Speed Racer, we have a General Assembly, not a Congress. You’re welcome.

===He has the correct IDEA for turning Illinois around from being the worst state in the union to one moving up the line, bringing businesses back to IL that will in the long run help everyone in IL through economy growth and job creation.===

And those are?

- Allen D -, just spouting the Raunerite talking points like a Raunerbot, that’s not making any point.

Comment by Oswego Willy Tuesday, Jul 21, 15 @ 11:22 am
Oswego, you are correct, a GA not a Congress … but 6 of one — half a dozen the other… they have the same job. I was just discussing federal politics a few minutes ago with a Navy buddy.

Comment by Allen D Tuesday, Jul 21, 15 @ 11:26 am
Excellent column. All three suggestions seem quite reasonable. I hope Madigan thinks so too, and I hope someone reads it aloud to Rauner.

Comment by Robert the Bruce Tuesday, Jul 21, 15 @ 11:26 am
Allen D

“worst state in the union” Have you ever been to Mississippi?

Comment by very old soil Tuesday, Jul 21, 15 @ 11:33 am
===Oswego, you are correct, a GA not a Congress … but 6 of one — half a dozen the other…===

No, it’s really not. See how the bodies are constituted, elected, staggered, let alone the governance.

We don’t have a Congress, we have a General Assembly. It’s not up for interpretation or discussion.

===…they have the same job. ===

The Illinois General Assembly can vote to declare war? New one on me. How about sticking with General Assembly, k?

===I was just discussing federal politics a few minutes ago with a Navy buddy.===

I hope you weren’t telling your buddy the GA is the same as Congress, lol.

Not. The. Same.

Comment by Oswego Willy Tuesday, Jul 21, 15 @ 11:36 am
Funny

Comment by Allen D Tuesday, Jul 21, 15 @ 11:41 am
You put him in his place Oswego. Atta boy. We had no idea what he meant.

Comment by Anonymous Tuesday, Jul 21, 15 @ 11:43 am
Pretty. Your turn.

“- Anonymous -”, I think if someone is calling the GA and Congress “6 of one…” I don’t think they really know what either body does.

I guess believing what isn’t true, but what is “close” is the Trib’s Edit Board’s mantra too?

Comment by Oswego Willy Tuesday, Jul 21, 15 @ 11:46 am
Things may be different elsewhere, but unless you have your union card, you don’t do any work in my place.

I rely on that card to show the tradesman has been trained. I will pay more for that assurance.

So no, I don’t view that suggestion as beneficial.

Comment by Gooner Tuesday, Jul 21, 15 @ 11:58 am
We need another area for compromise. When the gov was campaigning, he wanted term limits. I suggest term limits for the top four leadership positions plus appropriations chairs, of six years. After that, the legislator could still serve in the chambers but not be in a top leadership position for another four years.
Speaker Madigan is no kid, and Senate Prez Cullerton is looking burned out — any such law would only apply into the future, so they would have up to six more years in power if they wanted it.
Such a change therefore has no personal impact on the current Dem leaders, but would look good to the guv who is still campaigning and would give new life to many “mushrooms” who may be wondering why they stick it out.
Get it going, as a first step towards working with the guv on governing.

Comment by Capitol View Tuesday, Jul 21, 15 @ 12:11 pm
I too agree with Term limits… political service was never meant to be a permanent job, yet that is what many of these aspire as a career… it is preposterous. If there is a term limit on the highest office then the offices that have the most power should also have term limits “GENERAL ASSEMBLIES” and Congress.

Comment by Allen D Tuesday, Jul 21, 15 @ 12:15 pm
Allen D:

You, better than I, have demonstrated why compromise with the Rauner administration is not currently possible.

The administration is held hostage to an ideology - whether it is Rauner’s personally or he is merely representing those like Allen. In that view, guys at the top like Rauner or his czars making $250,000 a year are justly compensated and worth every penny, while the workers on the front line who do the actual work are all slovenly, overpaid miscreants.

Comment by Juvenal Tuesday, Jul 21, 15 @ 12:16 pm
===The administration is held hostage to an ideology===

No, it isn’t.

Again, it’s not like I wrote this column in a complete vacuum.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 12:20 pm
@Juvenal I beg your pardon, but I am not in the higher class nor have I been… you would probably be surprised to know that I only make …. wait for it…. $42,500 a year as an Office Assistant, not a glory salary, but that still doesn’t change what I feel is right and fair.

Comment by Allen D Tuesday, Jul 21, 15 @ 12:28 pm
“The administration is held hostage to an ideology. In that view, guys at the top like Rauner or his czars making $250,000 a year are justly compensated and worth every penny, while the workers on the front line who do the actual work are all slovenly, overpaid miscreants.”

“No, it isn’t.

Again, it’s not like I wrote this column in a complete vacuum.”

Or in a seat at AFSCME contract negotiation table.

Comment by Anonymous Tuesday, Jul 21, 15 @ 12:39 pm
I see the points 1 and 3. But Rich, the Property Tax Extension Limitation Law (PTELL) has been around since 1992. It caps local government levy growth at 5% or the CPI in dollars, not rate. So if one year the Village of Greenacre levies $10,000,000 and the next year the CPI is 1% (let’s just keep this simple), it can increase its levy to $10,100,000. That $100,000 barely pays for motor vehicle fuel costs for a city police fleet, not to mention the rising costs in insurance, paper, computers, and everything else, like CBAs.

That law has had a huge impact in keeping village, school district, park district, and other levies low.

Don’t ignore the fact that property taxes pay for services. In my work, we help cities and counties all over the US. None have what we enjoy. Few have the services that Illinois local governments provide. Freezing property taxes means roofs that fail close a building, grass doesn’t get cut, fewer cops are on the street, response times for fires get longer, streets don’t get swept, sidewalks don’t get maintained as often, and parking lots must last longer between facelifts.

I’ll add that sometimes costs for locals rise because of Springfield initiatives. I’ll close by noting that not every entity can have a sales tax. Cities and villages can. School districts and park districts do not have that authority, and please, let’s not create it. PTELL works just fine, as Lee Daniels intended it to do so.

Number two, although appealing, would be a disaster.

Comment by Mongo Tuesday, Jul 21, 15 @ 1:07 pm
===PTELL works just fine===

Cullerton has agreed to a two-year freeze. The question is how they control costs during that freeze, ergo my idea. I’m not advocating for a freeze, just posting my idea about how they can get there.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 1:10 pm
To me a recent situation in Springfield seemed to show the fallacy that there would be great savings by dumping prevailing wage.

Recently an out of state developer proposed a downtown multi-story housing project geared towards students from UIS. Their contention was that it would need an influx of TIF money to the tune of six figures to be viable. The TIF money would have amounted to about ten percent of the multi-million dollar cost. That money would have been the only trigger for prevailing wage. The City Council passed on the request.

Going by what many seem to want us to believe, they should have been able to skip the TIF money and done the project with the savings in wages. Those savings are supposed to be in the 20 to 40 percent range, right?

As to the idea of tying the need for prevailing wages to the cost of median housing in an area, not an idea I would support. Residential and Commercial Construction are almost apples and oranges. Prevailing wage determinations show that to some extent now.

My big problem with using residential numbers to determine anything is that there is substantial misclassification of employees in the industry. One way to beat workers comp cost is to list what should be an employee as a sub-contractor. Like speeding and texting while driving there is lax enforcement of the wage and safety laws in residential. If you talk to residential contractors you will most likely hear they are upset with the recent interest in them by regulatory agencies. IDOL is supposed to enforce the laws against misclassification but they are highly understaffed and view it as a low priority. I won’t go into the studies that show how many of these “Sub-Contractors” fail to pay taxes. All this adds up to a good deal for the consumer but perhaps not so much for the state.

Comment by Bemused Tuesday, Jul 21, 15 @ 1:21 pm
I like Rauner’s stand against unions in government, and education for that matter.

It will take Illinois hitting rock bottom, then some, before any deals can be worked out. We’ve been kicking the can for so long it has dang near become policy in and of itself.

Madigan is for winning the battle, at all cost, and Rauner is determined to change the way it has been done for years. Perhaps the bottom will serve to help resolve the impasse.

Comment by Sunshine Tuesday, Jul 21, 15 @ 1:23 pm
=== Perhaps the bottom will serve to help resolve the impasse===

Careful what you wish for.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 1:26 pm
==however, He [Rauner] has the correct IDEA for turning Illinois around from being the worst state in the union to one moving up the line, bringing businesses back to IL that will in the long run help everyone in IL through economy growth and job creation. ==

I don’t think that anybody is against economy growth and job creation. There is just a difference of opinion on what works in accomplishing that. There is little concrete evidence that Rauner’s ideas actually work to improve a state’s economy or create jobs.

Furthermore, Rauner’s budget and proposals in the spirit of keeping taxes low - cut the state’s higher ed budget by 31%. That is not a way to attract businesses, create innovation, and spur growth. Spending more money on education, not less, is a key to growth.

Comment by Joe M Tuesday, Jul 21, 15 @ 1:54 pm
Good ideas Rich, but I would like to add one thing to that consideration #3. The projects that are small and not fitting under prevailing wage (and need to be free of Fed Money as already expressed here) should, by statute, go to minority contractors. I know there will be ‘hootin and hollerin’ from some quarters, but if BVR wants to put some muscle behind his efforts to find a wedge between the minority caucus and the unions, that would help things along and might be the ray of hope all are looking for. Also, yes, cap GROWTH not wages — like we had property tax CAPs on increases. Otherwise you end up with 5 years of no raises.

Comment by Not quite a majority Tuesday, Jul 21, 15 @ 2:03 pm
===should, by statute, go to minority contractors===

LOL.

Nice idea. Seriously.

Comment by Rich Miller Tuesday, Jul 21, 15 @ 2:05 pm
=That law has had a huge impact in keeping village, school district, park district, and other levies low.+

Actually, in many cases, just the opposite. Those that can never lower their rate which serves, in turn, to keep the extension higher than necessary.

Poor communities do not equal poor school districts. In some cases yes, in others not even close.

Wages for downstate educators have been stagnant by and large.

How about start with the state meeting it’s statutory funding requirement before we get into capping the one dependable source of income for most schools? We would better understand the condition of schools and their level of fiscal responsibility. Year after year for the last 6 years we have had to guess at what we were going to get in terms of funding. In some cases like FY 15 cuts came after the original cuts. You cannot budget that way.

Comment by JS Mill Tuesday, Jul 21, 15 @ 2:29 pm
How about term limits for the governor & first time legislators. Madigan and Cullerton would support term limits for newcomers.

Comment by Mama Tuesday, Jul 21, 15 @ 2:32 pm
JS Mill I was trying to be brief. But of course the State has not met its funding expectations for local education agencies. Nor has the federal government for that matter. So who, in communities that can, pick up the slack? The local taxpayer. And in communities up against the tax cap…they can’t pick up the slack.

Each type of entity likely requires a carefully crafted solution that addresses revenue and expense. The one-size fits all approach of an across-the-baord freeze hurts more than it helps.

Comment by Mongo Tuesday, Jul 21, 15 @ 3:34 pm
Worth the endless Crain’s spam I know re-registering will incur!

I think Rauner gains politically by pushing the political reform items and being sure he gets *something* (even if it’s just a vote) included in the compromise. The irony is that the political reforms seem to be the ones the Democrats are most adamant against, yet they don’t cost workers a cent (at least directly…)

Comment by lake county democrat Tuesday, Jul 21, 15 @ 4:35 pm
Superb column, Rich.

Comment by Formerly Known As... Tuesday, Jul 21, 15 @ 5:19 pm
Rich -

You are brilliant, without question.

I don’t think you could find ten republicans who would vote to:

1) freeze wages and benefits of teachers, firefighters and police in their district, and
2) freeze their mayors’ ability to spend money and
3) raise the income tax by $3 billion and the sales tax by $1 billion.

A deal that does not get atleast 36 GOP votes in the house is DOA, and a deal that cannot muster atleast 40 GOP votes for the turnaround agenda and the Rauner Tax is unlikely to pass.

Democrats just paid at the polls for the last tax hike, it is the GOP’s turn to buy a round. They keep trying to figure out how to get more money to spend so they don’t take any blame for massive cuts, while still avoiding even the risk of loss at the polls.

Sorry guys, that’s just not the way it works.

Comment by Juvenal Tuesday, Jul 21, 15 @ 5:32 pm
A couple thoughts:
1) re the idea to require minority contractors, how is that going to work in the rural areas across the State where there probably aren’t very many minority contractors?
2) instead of a property tax freeze maybe amend PTELL instead. If a government has kept the same levy (or reduced it) for at least 2 years then if necessary the levy can be increased above the CPI. This way there is an incentive to keep the levy as low as possible and governments aren’t unnecessarily handicapped with a flat out freeze.

Comment by MyTwoCents Tuesday, Jul 21, 15 @ 6:13 pm
What makes Rich’s column so incredibly good?

The wonky responses to its merits and the understanding why its imperfection makes it perfect.

Great stuff Rich.

Comment by Oswego Willy Tuesday, Jul 21, 15 @ 7:59 pm
The idea that prevailing wage will improve the state economy is mathematic, financial, nonsense.

PEOPLE pay income and sales taxes that increase state revenues. Corporations pay ONLY income taxes as state revenue since all other taxes are a cost of doing business.

Suppose you remove prevailing wage and get a 20% drop in wages. That 20% drop is a direct drop in revenues to the state. The materials in a government project do not generate sales tax revenues. The wages portion to people generate the income and sales revenues. When prevailing wage is dropped, much more of wages will go ‘out-of-state’ which is a total drop in state revenues.

That’s why changing the prevailing wage is nothing but a race to the bottom both for individuals and the state. Both have lost revenue.

Comment by IL17Progressive Tuesday, Jul 21, 15 @ 8:08 pm
God bless you all for coming up with great ideas. I don’t think they give a crap. Blood is in the water.

Comment by Honeybear Tuesday, Jul 21, 15 @ 8:32 pm
=I suggested a cap on growth.=

I struggle to understand why the state, which provides a 25% share of funding for our schools would have a 100% say in our staff compensation or growth in their compensation. Particularly given the ILGA and executive branch penchant for granting sweat-heart compensation deals to their special friends

Our salaries are modest by any standard, particularly for professional employees. We participate in an annual compensation survey and our overall compensation, by employment category, is always in the lower half. We have been judicious. Particularly when compared to the running of the state government.

They can work out many different “compromises”, but these are fixes of their gross failure over the course of decades. We do not suffer the same malady.

I would support a pension cost shift, particularly one that leaves it to the local body to determine how to pay the costs. Local governments are generally far more responsive to the needs of the communities they serve than the ILGA.

Cost shift takes just under $2 billion of the books for the state. It is their job to figure out how to get the rest of the revenue and pay the states bills.

Comment by JS Mill Tuesday, Jul 21, 15 @ 10:32 pm
IL17Progressive =Suppose you remove prevailing wage and get a 20% drop in wages. That 20% drop is a direct drop in revenues to the state. The materials in a government project do not generate sales tax revenues. The wages portion to people generate the income and sales revenues. When prevailing wage is dropped, much more of wages will go ‘out-of-state’ which is a total drop in state revenues.=

The concept on the prevailing wage is that the 20% savings you quote would be spent on additional projects, here, locally by governments. You seem to think the lower wages will only attract out of state workers?

Comment by allknowingmasterofracoondom Tuesday, Jul 21, 15 @ 11:37 pm
Clearly AllKnowing… you are not terrific at mathematics.

Suppose $100m is to be spent on infrastructure projects. Then, X can represent the portion of the total expenditure paid in wages under ‘prevailing wages’. Which means (X * 0.0375) becomes state income taxes and (X * 0.07 * 0.5) for sales taxes). (0.5 factor represents not all spending is on taxable items. 0.07 is a common rate since sales tax varies by location).

Now remember, AllKnowing.., x represents the $ wages with prevailing wage from the total projects.

Next, suppose removing prevailing wages results in a 30% reduction in wages paid on projects out of the same $100m. Thus for the 2 revenue factors above the amount received by state for income taxes becomes (X * 0.7 * 0.0375) and for sales taxes becomes (X * .7 * 0.07 * 0.5).

Use value you desire for X and the result after removing of prevailing wage is ALWAYS lower.

Now, here’s the really difficult part, AllKnowing…

It does not make any difference if the total is spread to 1 or 1000 projects. The end result of removing prevailing wages is (X * .3 * 0.0375) + (X * 0.3 * 0.07 * 0.5) in LOST state revenue.

Doing another project with the wage reduction DOES NOT change the FACT the total wages from the spending is DOWN thus state revenues will be DOWN!

Comment by IL17Progressive Wednesday, Jul 22, 15 @ 10:39 am