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Democrats Tue Dec 08 2015

"Fiddling While Rome Burns"

A downstate lawsuit filed shortly before Thanksgiving sums up what's wrong with Illinois government right now. Hitting local radar via a press release suggesting an action by SEIU Healthcare, the request for a temporary restraining order against the State was brought by more than a dozen public employee unions, including lead plaintiff AFSCME Council 31, nurses, and police officers, over the State of Illinois's failure to pay for health insurance for state employees.

The suit may have been overlooked here due to more sensational events, or because lawsuits against the State over its fiscal mess are no longer news; half a dozen have been filed, and court orders are part of how Illinois keeps spending money despite no budget in place. However, unusual in this case is the judge's language used in granting a TRO. In his order, Judge LeChien wrote on Nov. 25 that the inability of "the Governor and the General Assembly to perform duties makes essential services and assistance headed for a chaotic bust." The court charged both the executive and legislative branches of Illinois government with adopting a "fiddling while Rome burns posture" that forces the courts to act.

These are strong words with which others agree. Illinois may not be blazing but is heading into the ditch. My state senator, Democrat Daniel Biss, advised that the standoff is doing "untold harm by destroying the state's vital human services network, by worsening its already bleak financial picture and by marring its fiscal reputation so severely that it will take years to recover." Fiscal conservatives, too, are correctly "concerned about the destruction of our social service infrastructure." The state's bond rating is headed toward junk status, and each day of inaction increases the problem. The meeting between the governor and legislative leaders was termed a "waste of time" by House Deputy Majority Leader Lou Lang. Appropriations are occurring piecemeal and without assurance that funds even exist to cover the amounts approved. Why is this occurring?

Governor Rauner says that the legislature - where the Democrats hold large majorities theoretically able to override a veto -- never gave him a balanced budget. Democratic leaders counter that the governor is holding the budget hostage to unrelated issues that are part of his "turnaround agenda." Who's right? Actually, both, and both are presenting only part of the picture, and avoiding their own responsibility.

The governor has the duty under state law - specifically, Article VIII, Section 2 of the Illinois constitution - to prepare and propose a balanced budget to the legislature. Gov. Rauner never did that, submitting a budget that relied on pension reform savings that most observers (correctly) thought would not be realized.

The governor, however, only proposes. The legislature's role under the same constitutional section is to pass a balanced budget, implemented via an appropriations bill. The legislature never did its job, either, sending the governor spending bills admittedly billions out of balance. In other words, Gov. Rauner proposed a budget that depended on unicorns; the legislature responded by insisting that those unicorns be ridden by flying monkeys.

Normally, negotiation would lead to a more realistic menagerie, but unrelated issues have stalled the process. The governor has been insisting that Democrats yield on some issues that are part of his so-called "turnaround agenda," most prominently making Illinois workers compensation claims harder, capping lawsuit awards, and making labor law changes that would weaken unions' ability to collectively bargain. Characterizing these requests as "extreme," the Democrats have refused to put them on the table, and accuse the governor of wrongly holding the budget hostage to political agenda.

On this last point the Democrats are correct. Let's be clear: Illinois's fiscal problems are not primarily due to public sector labor organizing, private lawsuits, or workers compensation. I've represented businesses and worked with them for decades, and while there are many complaints against Illinois government, rarely if ever have I heard these issues highlighted in business's struggles or as reason to leave Illinois. Nor do they relate, except indirectly, to the Illinois budget.

Rather, the public and press need to realize that these are political volleys aimed at specific groups. Labor, especially public sector unions such as the plaintiffs in the health insurance lawsuit, is the largest organized Democratic-leaning constituency, at least in terms of campaign contributions. Although unions can and do back Republicans, overall they skew blue. Similarly, the "trial lawyers," by which is meant not all litigators, but those who mainly represent plaintiffs or workers, are consistent Democratic supporters in Illinois. Workers comp hurdles and so-called "tort reform" take money directly from the injured, and, because such suits are typically compensated on a contingent basis, from the pockets of the plaintiffs' bar.

Thus, Rauner's insistence on his "turnaround agenda" amounts to asking, as a precondition of negotiations, that the Democrats throw some key allies under the bus, and agree to weaken themselves as a party for the next election. Obviously, the Democrats will never do this, and Rauner knows it, and to continue to insist on it is pointless, naïve, phony, or all three. This refrain has legs only so long as mainstream media treat it as normal politics or a legitimate bargaining approach. Be clear: the "turnaround agenda" precondition is not a viable bargaining tactic. It is a non-starter deal-killer.

At the same time, it is hard to extend sympathy to the Democrats because the fiasco is also due to their putting politics first. Illinois in 2011 staved off fiscal shipwreck by a so-called "temporary" income tax increase from a puny flat 3% , one of the nation's lowest, to 5%. The additional revenue went almost entirely toward paying down pension shortfalls. Everyone who paid any attention to this issue knew that, and also knew that if the income tax increase was not extended and/or made permanent by 2015, Illinois either would once again fall further behind on its pension obligations, or would have to divert the equivalent of the tax increase to pensions, forcing large, unprecedented cuts in state spending that it could not responsibly do. Again: everyone knew this. So, most expected that the Democrats, in 2014 when they not only controlled the legislature but also the governor's office, would extend or make permanent the 5% rate, even though no one wants to have voted for a "tax increase" in an election year.

Instead, the Democrats, despite holding overwhelming legislative majorities that included a number of legislators not even running for re-election, first failed to do so during the 2014 session, and then, to the shock of many, also failed to do so after the election. The buzz in Springfield with respect to the latter failure was that the Democrats did not want to shoulder blame for the higher rate while giving the incoming governor enough funds to work with, and so would insist that the Republicans, who presumably also knew that the 5% income tax rate was necessary to balance the budget, contribute some initiative and votes for the necessary revenue.

How anyone could have imagined that the incoming governor, who for all of 2014 had used the spectre of a tax extension as a cudgel with which to pound Pat Quinn, would suddenly change his tune, is a mystery. Did the Democrats, who argued to the public for months that Bruce Rauner was the Illinois avatar of Scott Walker, secretly think that Rauner once sworn in would turn pragmatist and promote the very increase he railed against? Rauner himself called his victory a mandate for lower taxes. Given the chance to effectively defund government without the necessity of a vote such as California's Proposition 13, Rauner and some conservatives leapt at it. The Democratic gambit, if that was what it was, was unsound, and the current wreck is what one expects when two drivers play a game of chicken and no one flinches.

Any lawsuit between parties to a relationship - a contract, a marriage, a lease - is a statement that the relationship has broken down. Here, however, the suits by thousands of State employees symbolize that the wreckage extends beyond the parties involved. More like a plane crash landing on the Kennedy Expressway.

Governor Rauner for the good of the state needs to stand down. Adding ornaments to a Christmas tree violates fundamental principles of traditional conservative lawmaking. If ideas have enough merit on their own, let them be introduced, debated, and voted up or down by the legislature in session. To hold a budget hostage to non-budget issues is admission that such ideas can't pass on their own. While the tactic has become common in D.C., it's part of the reason Congress is detested, and it is wrong, immoral given the stakes, to use extortion putting the entire state in jeopardy, to try to ram through proposals that lack popular or legislative support.

The Democrats, in turn, have the obligation to pass a balanced budget and present it to the governor. Moreover, they must use their majorities. Not one Democratic seat was lost in 2014. What is the point of exhorting the rank-and-file to elect "veto-proof" majorities if they are not used? The state party does not hesitate to deploy political muscle, even in primaries where any winner would still be a dependable Democratic vote. Lawmakers every year jump on command to pass rules and shell bills that strengthen leadership's hand. What is the point of party if it does not enact legislation that reflects its brand? Extension of the income tax to preserve vital programs reflects overwhelming Democratic principles. Democrats, rather than running from fear of voter backlash, need to do what must be done, own it, and expend political capital and actual capital on explaining why they did the responsible thing.

Governor Rauner, stand down. Democratic Party, step up. Do what you need to do before other events and actors, beginning with more court orders, force you to step aside.

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steve yokich / December 8, 2015 11:13 PM

Very well done Jeff. Of course, I am biased because I handled the SEIU Health Care suit and suggested to the judge that he needed to act because the political system was broken. Keep on doing this.

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