Republican Gov. Bruce Rauner in his first State of the State address laid out a broad agenda to revitalize Illinois’ economy that focuses significantly on stripping the power and influence of labor unions.
Rauner in his 40-minute speech to state lawmakers Wednesday afternoon called his proposals “bold” and “aggressive” but “necessary and very doable” to repair the state’s deep financial troubles, and make Illinois more competitive with other states.
“The time is now for all of us, Republicans and Democrats, to do big things — the right things — for the people of our great state. Now is the time for bold and decisive action. It is make or break time for the Land of Lincoln,” Rauner said.
But while Rauner preached the need for bipartisan cooperation to stop what he repeatedly called on the campaign trail the state’s downward spiral, he almost certainly will find a number of his proposals, especially those blunting organized labor, a very hard sell to Democratic lawmakers who hold House and Senate supermajorities.
He outlined some of his proposals in his address, and others in an accompanying list of priorities he called “The Illinois Turnaround.” He told lawmakers they should consider the plan as a whole rather than a list of separate initiatives, and that while they would find things they don’t like, they will find a number of things they do.
Among his top priorities for economic growth are implementing more significant workers’ compensation reform, tort reform, implementing true competitive bidding for public works projects while limiting prevailing wage requirements, and allowing local voters to decide by referendum whether or not local government employees should be forced to join a union or pay dues as a condition of employment — Rauner dubbed the localized right-to-work areas “employee empowerment zones.”
"Employee empowerment zones will increase jobs for residents, increase economic activity for local businesses and generate more tax dollars for local governments. It’s a win-win-win proposal,” Rauner said.
Rauner also seeks to limit organized labor’s influence by extending the existing ban on political contributions for businesses with state contracts to all organization with a collective bargaining agreement with state government, and organizations funded by entities receiving state Medicaid funds.
In exchange for the business reforms, Rauner said he supports a plan to increase the state’s minimum wage from $8.25 to $10 an hour, but phased in over seven years.
While Rauner in his speech did not address the state’s $111 billion unfunded pension liability — a 2013 reform bill is awaiting an Illinois Supreme Court ruling regarding its constitutionality — his priorities list included a proposal to move state employees into a new tier of benefits or into 401(k)s while protecting the pension benefits they have accumulated to date. Another proposal seeks to give state government employees merit-based raises.
A number of Rauner’s proposals are aimed at the local level, such as lowering the property tax burden on Illinois homeowners. Besides the right-to-work and prevailing wage reforms that he said will decrease local government’s costs, he wants a two-year freeze on property taxes and an increased emphasis on consolidating local units of government — Illinois at almost 7,000 has far more than any other state.
“Our property taxes are out of control and are crushing middle-class families. Illinois’ high property taxes have skyrocketed because state and local governments have been unable or unwilling to control their own spending. We must empower taxpayers to take control of their property tax bills by giving them greater ability to control local government spending,” Rauner said.
Rauner also echoed previous calls for constitutional amendments for term limits and merging the offices of treasurer and comptroller.
Lawmakers will meet again in two weeks when Rauner delivers his proposed 2016 budget, which will give a more complete picture as to how he plans to pay for initiatives such as increased funding for K-12 education, and at the same time what needs to be cut. Besides a multi-billion-dollar backlog of unpaid bills, the state faces a $6 billion budget shortfall for the next fiscal year beginning July 1. A much-criticized 2011 increase in the state income tax was allowed to expire Jan. 1 as promised.
While Rauner said he wants to keep income taxes “low and competitive with other states” and keep the state’s flat tax over a progressive one based on income, he wants to extend the state sales tax to include a number of services. He likely will find pushback from members of his own Republican caucus, some of whom oppose any attempt to find more revenue over cutting spending.
Local lawmaker react
Rauner’s speech earned high praise from local Republican legislators and even received positive words from the other side of the aisle.
Illinois Senate Republican Leader Christine Radogno, R-Lemont, said she’s encouraged by Rauner’s early signs of bipartisan leadership.
“It’s exciting to have a governor who wants to work with lawmakers on long-term solutions to the state’s problems,” she said.
Radogno is particularly intrigued by the governor’s plan to freeze property taxes.
“As a suburban resident, I know many property owners will share my interest in his plan to provide property tax relief. Gov. Rauner cited property tax rates as ‘one of the biggest impediments to growth,’ explaining the average property tax rate has increased nearly 33 percent over the past decade.”
State Sen. Michael Connelly, R-Lisle, believes Illinois is now on a path to re-emerging as the “economic engine of the Midwest.”
“Clearly Gov. Rauner was elected to make bold moves and take swift action to put Illinois back on the path to fiscal solvency and get our state’s economy going again,” Connelly said.
Rauner’s commitment to government consolidation tapped into a major talking point for many local officials. State Rep. Ron Sandack, R-Downers Grove, hopes the state can mirror the success witnessed in DuPage County.
“The DuPage County model has achieved an estimated $100 million in taxpayer savings,” Sandack said, “and I hope to see that effort extended statewide so that taxpayers everywhere can experience tax relief.”
State Rep. Deb Conroy, D-Villa Park, said she was “especially encouraged” by the governor’s pledge to consolidate units of government after she was part of the bipartisan effort in DuPage County.
Conroy also agreed with Rauner’s focus on the state’s fiscal crisis. She said she’s committed to working with Republicans to pass a “fiscally responsible budget while preserving funding for education and other vital services.”
“I look forward to hearing the specifics of Gov. Rauner’s plan and will continue to work with my colleagues in the House and Gov. Rauner to find balanced solutions to our state’s fiscal problems,” Conroy said.
Managing editor David Good also contributed to this report.