SPRINGFIELD — Gov.-elect Bruce Rauner’s team on Tuesday released a memo that highlights the size of the task it must achieve if it is to right Illinois’ sinking economic ship.
And that task is big — big as in billions of dollars.
The memo from transitional budget director Tim Nuding to the governor-elect attempts to explain how the massive holes in the state budget grew to their current proportions and why Illinois must fundamentally change the way the state operates.
Although the Rauner team memo does not set forth specific proposals, some legislators and analysts on Tuesday said Rauner will almost certainly have to call for not only cuts in state spending, but for more state revenue.
Illinois has a spending problem — not revenue one, state Rep. Tom Morrison, R-Palatine, said.
“I hear people say the state has cut itself to the bone and then I walk through those $600,000 doors at the Capitol and I know they are wrong,” he said. “The state is taking in more revenue today than it has at any time in its history. We have a spending problem.”
The incoming Republican governor, to be sworn in Jan. 12, may be trying to lay the groundwork for what may be a fierce battle to bring Illinois’ spending in line with its income.
A three-page memo titled “Sins of the Past and Dishonest State Budgets” argues Illinois is in horrid financial condition because of previous legislatures’ and governors’ “giving away benefits they knew the state couldn’t afford, deploying fundamentally dishonest budget practices and kicking the can (or the bill) down the road.”
The memo points to spending based on heavy debt rather than on income, and it highlights several practices or habits.
It says the practice of using borrowed cash rather than actual revenue has been so bad it equates to driving a freight train through a loophole in a state constitution that nominally requires balanced budgets.
The budget memo says interfund borrowing will bring an estimated tab of $650 million. And that comes on top of another $760 million that state agencies are requesting.
The memo also addresses the need for $1.4 billion to pay only debt service on current pension bonds.
Finally, the memo discusses the state’s unfunded pension liabilities. Were Illinois to make only its required payments for active members of its pension system in the coming 2016 fiscal year, that “normal” cost to bring plan funding to 100 percent would be $2 billion.
But there’s also the amount to pay on pension liabilities incurred by not paid, and that comes to $4.6 billion. In all, the scheduled payment from general revenue for fiscal 2016 equals $6.6 billion.
The memo to Rauner concludes:
“When tough decisions are put off for another day, when the can is kicked down the road to be dealt with by a future generation, this is what happens.”
State Rep. John Cabello, R-Machesney Park, said the numbers should not be considered a surprise, and it’s time the state focus on what he calls the big five: the elderly, the young, the disabled, education and infrastructure.
All other state spending must be seen as optional, and Republican legislators must be willing to stand with Rauner, who has said he’s willing to take the heat for those cuts.
Fortunately, there are members of the General Assembly — both relatively new and experienced, and from both parties — who understand the size of the problem and who are willing to get after it, Cabello said.
“There are a lot of good people on both sides of the aisle willing to get the job done,” he said.
But given the enormity of the problems, Cabello had one word for how tough the coming year in the statehouse could be: “Brutal.”
Rep. Joe Sosnowski, R-Rockford, said he believes the state should look at big spending cuts and increasing efficiencies before considering any new revenue attempts.
“I’d expect many people on both sides of the aisle will be willing to work with the governor,” Sosnowkski said. “Certainly there are many approaches open, and I’m willing to look at anything the governor suggests.”
State Rep. Mike Smiddy, D-Port Byron, said while he understands the numbers, until the governor-elect puts forth some specific proposals he risks coming off as partisan and continuing his campaign after the election is over.
Smiddy said everyone should understand that coming votes will test a legislator’s resolve on behalf of all taxpayers and not just on popular standing.
“And I’m OK with that. In fact, we absolutely have to get back to that,” Smiddy said, stressing that leadership has to be about more than the next election.
State Rep. Frank Mautino, D-Spring Valley, a member of Democratic leadership who works on budget issues, said while he respects the governor-elect’s concern and focus, he wants to see some numbers on the table.
“Absolutely, the governor’s going to have a very big task,” Mautino said. “But more is possible if both sides take responsibility.”
Political analyst Mike Lawrence, a longtime statehouse journalist and former aide to Gov. Jim Edgar, said he believes Rauner is trying to ease way for the hard announcements ahead.
Still, Lawrence said, solutions to a crisis are often more reachable when political power is not concentrated as it was of late, with Democrats holding the governor’s office and veto-proof majorities in both chambers.
With shared power comes shared responsibility, Lawrence said. And lawmakers are more like to make difficult votes when there’s a perception that not only is responsibility shared, but so is political risk.
David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University, concurred.
“I have no doubt this is the opening salvo in a public relations effort by Rauner’s people, and they’re right to do it,” Yepsen said.
A lot is on the line, and the public has to be made aware of how bad Illinois budget problems really are, he said.
Mark Fitton is a reporter for the Illinois News Network.