Illinois state Senate overrides Gov. Rauner's veto of spending plan, tax increase
The Democrats in Illinois have won the war against Republican governor Bruce Rauner. It took two years, eight bond rating reductions, $15 billion in unpaid bills, and wails of pain from every constituency dependent on government spending in the state for them to achieve their victory.
But it was a hollow triumph. The first state budget in two years was made possible only with a whopping $6-billion personal and business tax increase. Democrats refused to cut the budget any further. And some Republicans, terrified by a negative reaction by voters to the ongoing paralysis in state government, broke with the party and voted for the tax increase.
So after both houses of the legislature passed a $36-billion budget with a 32% increase in individual taxes and a top business tax rate that rose from 5.2% to 7%, Rauner vetoed the plan, only to see the state Senate override that veto in less than half an hour. The Illinois House will take an override vote at the end of this week, handing Rauner a defeat that he may not recover from in time to win re-election next year.
Lawmakers say it's beyond late for more bickering with Illinois having already entered its third fiscal year without a budget.
Legislators – including 15 Republicans in the House who broke from the governor – say they want to end a crisis that turned Illinois into a national disgrace, drew the intervention of a federal judge, sent university enrollments plummeting, threatened to close K-12 schools in the fall and resulted in a staggering eight bond rating downgrades.
"We are in a moment in time," state Sen. Toi Hutchinson, among the Democratic leaders in negotiations said on Tuesday. "We are faced today with the fierce urgency of now."
The state hasn't had an operating budget since Rauner took office in 2015, after the Republican locked horns with a Democratic-dominated legislature. Rauner vetoed a 2015 budget, saying it was out of balance. He has demanded his own policy changes be implemented as a condition of the budget. Democrats opposed his changes, calling them "extreme" and anti-middle class.
The protracted political clash caused unpaid bills to pile up to $15 billion and left an operating deficit at $6 billion this year alone.
The veto override could put Rauner in a perilous position politically. The blue-state Republican is already viewed as the most vulnerable incumbent in the nation. He had vowed to "shake up Illinois" but now must run for reelection without having advanced his legislative agenda and unable to stop a 32 percent income tax increase – a tax hike for which many in his own party had voted.
But there are possible political benefits of a veto even with a legislative override. Rauner stands to enjoy the revenue from more tax money to avoid a full state shutdown and at the same time gets to say he tried to stop the bill.
"Illinois families don't deserve to have more of their hard-earned money taken from them when the legislature has done little to restore confidence in government or grow jobs," Rauner said in a Facebook address.
So it appears that the state will avoid the humiliating prospect of having its bond rating reduced to junk status. But at what cost? Rauner came into office full of ideas on how to reform state government, including putting public employee pensions on a sound footing while targeting favored Democratic constituencies for cuts. But unfriendly judges and a solid phalanx of Democratic legislators in opposition scotched his reform plans, taking the state to the brink of fiscal disaster rather than changing the way the state does business.
Rauner is a failure as governor. But what of the future of state finances? Does anyone really believe that increasing the state income tax will bring in the revenue proponents say it will? The state has already been losing residents at a record pace, and businesses have been fleeing the state in droves. That exodus will now get worse, leading to far less revenue than the tax increase was designed to generate.
It's seems a cliché, but a propos in this case: will the last person leaving Illinois please turn out the lights?