What Is At The Root Of Illinois Financialized Civil War?

politico  |  “Illinois is a real outlier in the most striking way. The sheer size of the state’s unfunded pension liabilities … just looking at the state’s finances, its habit of deferring payments from one year to the next, has created a vicious circle,” said Ted Hampton, vice president with Moody’s Investment Services. “Illinois has had a very large negative balance both in absolute terms and relative to its budget for many years.” 

What does the crisis all boil down to? It began with an ego-laden brawl between two powerful men: Rauner and Democratic House Speaker Mike Madigan. Rauner was elected in 2014 as the first Republican governor in Illinois in more than a decade, vowing to “shake up Springfield” in a campaign that demonized Madigan — the longest serving House speaker in state history — and targeted “corrupt union bosses.” 

Upon taking office, Rauner, a multimillionaire businessman, laid out a list of policy demands that initially included right to work elements as a condition of signing a budget into law. Rauner wanted changes to laws affecting workers' compensation, collective bargaining and state property taxes, among others. Democrats considered the agenda an attack on unions, which the governor had vilified, saying they had too much power in Illinois politics. Rauner called the measures pro-business and necessary to address decades of financial mismanagement.

But Madigan, who has served as speaker under governors from both political parties, was loath to condition the passage of a budget on the governor’s political agenda. Each side dug in, with unions rushing behind Madigan and Republicans — tired of being shut out for years by Madigan and thrilled to have a generous donor to their campaigns in the governor’s office — lined up behind Rauner. 

Today, Madigan’s Democratic-majority House and the Republican governor remain entrenched in the war to end all political wars. The exception is the Democratic-controlled Senate, which ultimately voted on a tax increase before May 31 adjournment. 

Both Rauner and Madigan counted on the other to cave. Neither has. Meantime, the state is drowning in debt, deficit spending and multiple bond-rating downgrades. 

It’s increasingly possible that Rauner — who promised that he carried negotiation credibility and the know-how to fix the state’s finances — could complete his four-year term in office without ever having passed a budget. At that point, economic forecasts indicate the state’s unpaid bill pile would soar beyond $20 billion. The bill backlog was at about $6 billion when Rauner first took office.

To put it into perspective, the Republican-dominated Kansas Legislature just overrode a veto by its governor from the same party that reversed the governor’s tax cuts and created $1.9 billion in revenue. Lawmakers there panicked after the state found itself $900 million in the hole — a drop in the bucket compared to Illinois.