Rauner’s “turn-around agenda” cheats taxpayers and businesses

When Republican Governor Bruce Rauner delivered his 2017 budget address to the Illinois legislature, Feb. 17, his message to lawmakers could have been summed up as, “Punish the people, or I’ll punish the people.”

At least Nero fiddled while Rome burned. Rauner does nothing. While Illinois is engulfed in flames and taxpayers are being cheated out of services, there’s not even danceable music.

The galling irony of Rauner delivering this ritualistic address is that now into the ninth month of this fiscal year, he has yet to sign and implement a budget for 2016-and he has yet to negotiate seriously with the Democratic-majority legislature. With no budget, agencies that provide vital services to Illinois citizens have received no monies this year and are shutting down, and the very existence of the state’s public higher education system is threatened, as none of the state’s higher education institutions of have yet to receive the state appropriations they need to operate. Yet citizens are still paying their taxes, which he is holding hostage, and receiving nothing in return.

Thus, while Rauner claims to be protecting the Illinois taxpayer, he is in fact defrauding taxpayers who pay taxes to ensure their children are educated, to receive childcare assistance so they can work, to help their children with autism, to assist the homeless, the disabled, the infirm, and the elderly, among other services their taxes support that help them take care of their families so they can be productive citizens.

While he campaigned on his bona fides as a businessman, claiming he would create a business-friendly environment and a functional economy, he has failed miserably at both. While defrauding the ordinary taxpaying citizen, it’s not even clear he has served those 2/3 of Illinois corporations that pay no state taxes!

At this point, Illinois citizens might most benefit from Rauner acting rationally and pursuing a course of governing that is evidence-based and data-driven-because so far his supposedly “pro-business” agenda seems hardly conducive to creating a fertile environment for business or people-unless good business means destroying what was left of Illinois’ economic health.

The business environment is hardly friendly, as evidenced by the fact that General Electric, which had been eyeing the possibility of relocating to Illinois, recently decided against it, citing the many economic uncertainties in the state as the reason.

And overall, Rauner’s inaction is wreaking havoc not just on Illinois’ economic present but on its economic future. Moody’s and Fitch’s rating agencies have downgraded the state’s bond and credit ratings, respectively, making it more difficult and more expensive for the state to borrow money and raise revenues. Similarly, Rauner’s recent vociferations about wanting to enact an emergency state take-over of the Chicago public system and to declare bankruptcy resulted in the school system having to pay a higher interest rate for a bond offering. Several state universities just had their credit ratings downgraded by Moody’s.

Far from exhibiting astute and responsible economic stewardship, as one might expect of a successful businessman, Rauner’s behavior is making the task of properly resourcing and governing the state less efficient and more expensive.

Tim Libretti’s article, which continues after the video, was discussed on this episode of the Thom Hartmann Show, starting at minute 4:12.

So, while The Washington Post accurately reports that Rauner “has tied passage of the $36 billion budget to changes in collective bargaining rights for public employees and worker compensation, business-friendly moves he says will help turn around the state’s flagging economy,” we have to ask if his “turn-around agenda” has any basis in reality.

Is there any evidence or data to suggest that weakening unions or curtailing collective bargaining rights are effective strategies for creating a healthy economy or a pro-business environment?

Studies show that states with a heavily unionized workforce enjoy healthier economies, as organized workers bargaining collectively command higher wages and richer benefits. While one might argue workers earning higher wages is bad for business, in fact, providing workers with purchasing power to fuel spending actually impacts the economy for all, creating a net-gain for businesses. As David Madland and Karla Walter argue in their 2009 study conducted during the recession, “One of the primary reasons why our recession endures is that workers do not have the purchasing power they need to drive our economy.”

Rauner also wants to institute right-to-work-zones, or what he calls “economic empowerment zones” in which local communities could vote on whether or not workers had to join a union or pay fair share dues as a condition of employment.

Again, though, the evidence that Rauner ignores indicates that workers in states with right-to-work laws earn less in wages and benefits and that the state economies themselves suffer.

Since Rauner is merely seeking to replicate Scott Walker’s union-busting strategies, we don’t have to guess at the outcome. Under Walker’s reign, Wisconsin has its highest poverty rate in 30 years, ranks 35th in the nation with its anemic job growth, features a cost of doing business higher than the national average, and has slashed spending on education. Only those like the Kochs seem to benefit. The policies aren’t good for business or people overall.

Likewise, Rauner seems not to serve business by creating a healthy economy and climate for business, but only to serve the wealthy, like himself. He urged the Illinois legislature not to renew a 1.25% temporary tax increase that was expiring just before he took office. By letting this increase expire, the multi-millionaire Rauner saved himself $750,000 in taxes, while those who earn on average $50,000 per year save only about 50 bucks per month. So you guess who is benefiting most from lowering taxes and destroying revenue for the state as Illinois schools crumble and basic services that make life possible disappear.

Meanwhile, Rauner has also peddled two other very damaging lies. He continues to assault state workers for Illinois’ budget problems, claiming they are overpaid, when in fact one study indicates state workers with bachelor’s or graduate degrees earn 32 to 40 percent less than they would in the private sector. Moreover, according to this same study, public workers account for just over 13 percent of the state’s workforce while generating 16 percent of the state’s gross domestic product. “That means,” the study concludes, “if Rauner were to cut state spending and trim the workforce, that actually could slow the Illinois economy.”

To add salt to Illinois’ wound, Rauner increased the salaries of his staff 24% over what previous governor Pat Quin paid his staff. And he recently hired a chief of staff for his wife Diana, who has no official duties, at the cost of $100,000 annually to taxpayers.  What happened to state workers being overpaid?

The other damaging lie he tells is that Illinois’ taxes are unduly burdensome. Yet, as mentioned 2/3 of Illinois corporations pay no taxes, and as the Illinois Economic Policy Institute indicates, Illinois’ state taxes are far less burdensome than those in the surrounding states of Iowa, Missouri, Indiana, and Wisconsin. If it had tax structures on a par with any of these states, Illinois could take in billions more in revenue each year and not be in the fiscal crisis it is.

But just as Rauner cares as little about business as he does the people of the state, he cares as little about the truth. Evidence-based and data-driven governing doesn’t interest him, nor does the public good. He has chosen to plunder the state for his own private interest and those of his cronies. That seems to be his only rationality.

This article originally appeared at PoliticusUSA. Follow Tim Libretti on Twitter.

On April 1, a coalition of K-12 teachers, college faculty, staff, students, union and community members will protest both state and local attacks on K-12 and higher education.

Photo: Illinois Gov. Bruce Rauner  |   AP


Tim Libretti
Tim Libretti

Tim Libretti teaches in the English Department at a public university in Chicago where he lives with his two sons.