Who has the answer to Illinois' budget woes? Speaker Madigan, Gov. Rauner or Ted Dabrowski? Cable/Web

And, if you miss tonight’s TV show with Dabrowski on balancing the State budget with no new taxes  (See, below), you can watch it 24/7 here.

Dem Narrative

The State of Illinois is at a crossroads, so to speak. It has now gone two years without a budget.  The Democratic Party narrative is that when the 2011 income tax increase sunsetted, in part, in 2015, from 5% to 3.75%, the State of Illinois lost about 4 billion dollars in revenue, and was driven into deficit spending.  Their solution, raise the income tax rate to generate a ton of new revenue.

Although the Democrats had supra-majorities in the State Senate and State House, they wanted Republicans to join them in supporting a tax increase, so voters wouldn’t vote the Dems out of their majority positions.

Rauner-Republican Narrative

The Republicans, under their fearless Leader, Gov. Rauner, argued that with reforms, spending cuts and spending caps, the budget could be balanced, without massive tax increases. They also argued that by keeping taxes lower, the State would stop losing population and businesses, which would increase state revenue.

Nevertheless, Gov. Rauner, despite his philosophical opposition to tax increases, said he would accept some new revenue and tax increases, if the Democrats would agree to some of his reforms.

But Speaker Madigan, to the tune of “What’s love got to do with it, anyway,” sang “What do reforms have to do with a budget, anyway,” and he said “No, to reforms,” especially to significant reforms.

Without a budget for FY 2016 and FY2017 (which ends in 11 days), the courts became involved in ordering the state to spend in certain areas, irrespective of the lack of appropriations and supporting revenue.

Illinois’ Deficit Spending

So, the state for the last two fiscal years has run implicit deficits of about 7 billion dollars each year, spending about 4 billion dollars more this past year than it did in FY 2015, it’s last “Almost balanced budget year.”  And, it’s revenue was about 3 billion dollar less during the last fiscal year than in FY2015.

And, the state now has unpaid bills of about 14 billion dollars. Oddly, even with that “Enormous boost in spending and unpaid bills,” it appears that many real needs of the poor and vulnerable are not being met.

Grand Bargain, part 1 and tomorrow’s Rauner speech to the State

About six months ago, Senate President Cullerton  (Democrat-Chicago) and Senate Republican Leadar Radogno (Republican- Lemont) began working on a Grand Bargain, reforms for tax increases, or so they said. But, in the end, it appeared heavy on taxes and light on reforms, so the Republicans, led by Rauner, backed away.

Recently, The Governor and House Republican Leader Durkin and Senate Republican Leader Radogno said they would support a variant of the defunct Grand Bargain discussions.  And, the Governor has called the General Assembly into special session, starting this Wednesday and extending to and including June 30, 2017 to work with him on a Grand Bargain, Part 2.

The Governor will kick off this Wednesday’s special session by speaking tomorrow night to the people of Illinois at 6 pm from the Old State Capitol in Springfield in what will perhaps by carried live by several Chicagoland TV  stations.

The Governor’s office said he will stress unity and a balanced budget.  That sounds nice but Rauner has a long way to go before he can persuade the Speaker to sign on to 3 or 4 year property tax freeze that the Speaker’s union friends vigorously oppose. And, the Speaker himself will go to great lengths to avoid giving Rauner a “Win.”

Finally, Rauner’s base vigorously opposes the income tax hike (See, below).  Rauner knows this and perhaps he plans to continue to blame the Speaker as the evil force that prevented and prevents him from achieving a balanced budget. Maybe the Governor views this “As one big acting role” that will help him win over, in 2018, moderate Republicans and Democrats.

Grand Bargain, Part 2

At the core of the Grand Bargain, Part 2 proposal is the Senate Democrats’ increase in income taxes of 5.4 billion dollars per year that the Dems had passed in the Senate, raising the individual income tax rate to 4.95%, just short of its 2014 level of 5 %, and extending the IL sales tax to certain services.  Rauner says he now can support that.

Ted Dabrowski, VP, Policy, Illinois Policy Institute, discussing proposals for IL criminal justice reform at a program last fall at "1871" in the Chicago Merchandise Mart in the Chicago Loop

Ted Dabrowski, VP, Policy, Illinois Policy Institute, discussing proposals for IL criminal justice reform at a program last fall at “1871” in the Chicago Merchandise Mart in the Chicago Loop

But, in exchange for that income tax increase support, Rauner and the Republican Leaders want the Democrats to agree to a 4 year property tax freeze.  Also, they want the Democrats to continue to support the modest pension reform and workers’ comp. reform that the Senate Democrats had previously supported.  And, there are a few other, more minor matters, to be worked out.

After May 31, IL state legislation requires a 60% vote, not a simple majority. That, and the fact that the Democrats don’t want to “Wear the collar alone,” for a tax increase means that to pass the tax increase most Democrats want, they will have to get significant legislative Republican support, as the Dems surely will not get all Democrats in the General Assembly to support the tax hike.  I mean, some of the Democrats face real, general election opposition.

Revenge of the Republican Party Base (Tillman, Proft, Uihlein and Griffin)   

Further, another problem that Governor Rauner faces is that the base of the Republican Party may fight him on the Grand Bargain, Part 2. The base is led on the economic side by (1) John Tillman and his Illinois Policy Institute, (2) Dan Proft, conservative WIND media personality, and (3) such big time funders as Dick Uihlein (who backs Proft in his efforts to turn the IL State Legislature red) and Ken Griffin (who backs Rauner, so the billionaire Governor does not have to deplete his entire net worth to win legislative seats and gain re-election in 2018).

The Republican Party base argues that freezing the highest property taxes in the nation at those high levels in exchange for imposing massively higher income taxes with almost no real reforms, spending cuts or caps is neither a bargain nor a long term solution to the State’s problems. It will drive, they argue, even more people and businesses out of the state.

Speaker Madigan, playing coy, as usual, until the climax

Further, Speaker Madigan has not indicated how the State House and he will vote on the newly proposed Senate-Rauner Grand Bargain, part 2.  Indeed, the proposal is, so far, only a Rauner proposal, with Senate President Cullerton yet to commit.

The Illinois Policy Institute, to the rescue, or a Spoiler?

So, with all the above problems in the possible Grand Bargain, the State turns its lonely eyes to the Illinois Policy Institute, which is trying to be the Joe DiMaggio of the 21st Century.

And, Illinois asks if Illinois Policy Institute CEO, John Tillman, has real ideas behind his bluster. That is, can the Illinois Policy Institute truly balance the budget with no tax increase and yet be a compassionate state for the needy? Gov. Rauner is quick to argue, “We can’t be compassionate if we are not competitive.”

The Answer

The Answer, despite what Dan Proft would say, is not always found at Proft’s daily (WIND, M-F, 5 to 9 am, 560 AM Radio program).

Nope, if you live in the City of Chicago, tonight you can get the answer to that question about balancing the IL budget with no new taxes by watching Ted Dabrowski, VP, Policy, Illinois Policy Institute, debate and discuss the key budget issues with Jeff Berkowitz at 8:30 pm or midnight on Cable Ch. 21 [CAN TV].       

And, if you miss tonight’s TV show with Dabrowski (See, below), you can watch it 24/7 here.

And, if you like, you can watch Proft argue the issues with great foresight, from the August, 2015, show, here.  

Speaker Madigan? Senate President Cullerton? Governor Rauner? Six other Democratic Party Primary Candidates? We hope they will all have the courage of their convictions and appear on Public Affairs, soon, too.

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