Illinois Governor Backs Away From No Tax Hike Pledge; Clueless Rauner Has Few Ideas

It's par for the course for politicians to back away from campaign pledges. But one might have at least expected that Republicans would not consider tax hikes.

Unfortunately, even that modest assumption is suspect as Governor Rauner Set to Inherit Illinois' Sea of Red Ink.

Illinois faces a sea of red ink because shrinking income tax revenue will fail to keep pace with rising pension and health insurance costs, according to outgoing Gov. Pat Quinn's latest three-year budget forecast.

The projections from the Office of Management and Budget warn that the estimated $4.1 billion bill backlog expected at the close of fiscal 2015 could grow to $9.9 billion in fiscal 2016, $15.7 billion in fiscal 2017, and reach $21.3 billion at the close of fiscal 2018.

At the same time, a general funds deficit of $180 million this year will rise to more than $5 billion in the coming years.

Quinn, as he unsuccessfully pressed lawmakers last year to make permanent the 2011 tax hike, warned lawmakers that years of progress would be reversed if they expired.

Facing an election, lawmakers balked and adopted a fiscal 2015 budget that is now $750 million short of the actual funding needed to support costs.

The task of balancing the current budget that runs through June 30 and dealing with skyrocketing red ink falls to Gov.-elect Bruce Rauner, who has warned that state finances are in even more dire shape than he thought. He has, at least temporarily, backed away from his campaign pledge not to extend the higher rates.

Rauner, who defeated Quinn in November, takes office Monday and his budget is due Feb. 18 unless he asks for a delay. The Republican faces veto-proof Democratic majorities in the General Assembly.

Rauner has so far offered only general ideas for balancing the state's books. A 10-point fiscal blueprint released during the campaign called for trimming $1 billion in spending, cutting state purchasing and cracking down on Medicaid eligibility, among other ideas.

Clueless Rauner Has Few Ideas

Clearly Rauner has few solid proposals.

But instead of forcing Democrats to override his veto of a tax hike bill, Rauner appears ready to throw in the towel already.

Reflections on "Progress"

Former governor Pat Quinn "warned lawmakers that years of progress would be reversed if tax hikes expired."

Progress for Illinois democrats is tax hikes, followed by tax hikes, followed by more tax hikes simply to cover inane benefits of public unions while taxpayers and businesses flee the state.

And now Rauner appears ready to go along with tax hikes because "state finances are in even more dire shape than he thought."

Pathetic.

Our only hope is to shame Rauner into a position that displays a backbone rather than a wet noodle.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Posted in: