CHICAGO – Gov. Pat Quinn will deliver a budget address this week that could be the most crucial of his career, as he grapples with a critical decision about raising the tax burden in Illinois at the start of one of the most competitive political campaigns nationwide.
Quinn’s pitch to lawmakers comes as the state confronts the major financial dilemma of whether to extend an income tax increase, and as he faces a serious re-election challenge from Republican Bruce Rauner, who’s already deemed him “the worst governor in America.”
The Chicago Democrat is expected to reveal his proposal for what to do when the temporary tax sunsets, leaving a roughly $1.6 billion drop in revenue and the need for deep cuts – the first major fiscal issue since Rauner won the GOP nomination. Quinn’s speech Wednesday in Springfield will also be his opportunity to deliver a message to critical groups, like unions, that have been disillusioned with him but that he’ll need come November.
“He’s kind of in a trick box,” said Chris Mooney, a political scientist at the University of Illinois at Springfield.
Quinn could let the tax increase expire and deliver bad news to education and public safety workers. “On the other hand, if he says we should make the increase permanent, then he plays right into Bruce Rauner’s hands in the fall,” Mooney said.
Rauner, a Winnetka venture capitalist, won a closer-than-expected GOP primary contest over state Sen. Kirk Dillard after spending and raising millions, including $6 million of his own money. Most of his first bid for public office focused on fighting “government union bosses” and curbing the tenure of career politicians.
Quinn, who easily won his Democratic nomination, has already set out to differentiate himself from Rauner.
He’s questioned Rauner’s business dealings, wealth and flip-flop on the minimum wage. But neither Quinn nor Rauner has offered specifics on the budget, which has been under election year scrutiny.
Quinn asked lawmakers to move his budget speech from Feb. 19 until after the primary, which Republicans deemed as political posturing so Quinn would know his primary opponent. But Quinn said he needed more time to develop a five-year spending plan.
He signed the last temporary tax increase after lawmakers approved it in the final hours of a 2011 legislative session with the idea that the approximately 67 percent increase would help fill a budget hole.
The tax sunset coming in January has set the stage for a fight as Republicans demand the increase be allowed to expire and top Democrats predict dire cuts. The issue erupted Friday during a tense committee hearing where the heads of several state agencies testified and Republicans accused Democrats of putting on a “dog and pony show” to justify another tax increase.
Universities are bracing for deep funding reductions which could mean tuition hikes, increases in student-to faculty ratios and fewer course offerings. Illinois Department of Corrections officials said a 20 percent cut would be “nothing short of disastrous.” Senate President John Cullerton has warned of a $3 billion budget gap – including the $1.6 dip in revenue – that would translate roughly into 27 percent across-the-board cuts, including teacher layoffs.
That worries unions.
Labor played a key role in the primary, with the largest unions backing Dillard and working to defeat Rauner. But now union members want reassurances from Quinn.
Quinn has typically had strong support from unions, and picked up a major endorsement Monday from the Service Employees International Union in Illinois. But many labor groups have been angry with him for withholding pay raises and a landmark pension overhaul that cuts benefits for employees and retirees. Savings from the pension law – which is undergoing legal challenges from unions – won’t be factored into Quinn’s budget.
“It’s a lot for him to do to win back the trust and faith of public employees,” said Dan Montgomery, president of the Illinois Federation of Teachers, who wants an extension of the tax increase, if even a partial one. “We start with that budget address and hearing what he says.”
He said the union hasn’t determined the role it’ll play in the general election, but it’ll work to defeat Rauner.
Rauner, who wants the income tax increase to expire, is sure to pounce on whatever Quinn proposes. Since he won the nomination, he’s amped up talk of working families. Rauner has faced criticism for being out of touch and initially saying he’d cut the minimum wage. He later said he’d raise it under the right circumstances.
“Families in Illinois are struggling. They’re suffering from the political leadership in Springfield,” he said last week. “That’s what we need to fundamentally change.”
Quinn’s other options could be to leave the tax issue up to legislators and focus his energies on other ways to generate revenue, such as supporting House Speaker Michael Madigan’s proposal to raise taxes on Illinois residents who earn over $1 million annually or institute a new tax structure based on people’s ability to pay. Almost all public-employee unions support a so-called progressive tax.
Quinn has declined to talk about the budget before his speech.
“I’ll lay out with specificity, with concrete details exactly what the budget’s going to be in the coming fiscal year,” he told reporters Monday.
However, Senate Republicans have outlined a list of conditions that must be met before they’ll sign off on a spending plan, including worker compensation reforms and a moratorium on new state programs or expansion of existing ones. They also want talk of a new tax structure off the table.
Senate Republican Leader Christine Radogno noted numerous GOP budget proposals have been “mocked” in past years.
“If they want us to work with them,” she said. “There are things they’re going to have to recognize and commit to.”