"We’ve been in a cycle of financial mismanagement for decades. It has to stop."
Gov. Bruce Rauner joined Dan & Amy this morning to discuss the possibility of a state budget before time runs out in the legislative session and to discuss the possibility of agreeing on a new contract with AFSCME before his patience runs out.
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Dan Proft: Good morning, Dan and Amy, and so the governor and the General Assembly are on the clock. The possibility of getting a budget deal done before… Amy Jacobson: May 31st. Dan Proft: Yeah, before the end of the month, and the General Assembly adjourns. Boy, even liberals like Mark Brown – did you read Mark Brown in the Sun Times today? Listen to this: “As much as I disagree with major elements of Rauner’s Turnaround Agenda, if there is a Democratic plan to restore Illinois’ economy, I have not heard it articulated clearly enough to communicate to others”. That is a profound statement, coming from someone as left as Mark Brown, and the reason he hasn’t heard it articulated is because there isn’t one. Governor Rauner issued basically a statement to say, “There’s still time, let’s get a deal done, we can come to terms”. Here’s what he had to say yesterday. Gov. Bruce Rauner: The question is will the democrats stand up and do the right thing together for reforms? Most of them are unwilling to say much publicly because they don’t want to get retribution. Dan Proft: Well, last week Madigan was unwilling to say some things publicly at a rally of 8000 public sector union members. Mike Madigan took to the podium, did his Tommy Smith John Carlos impersonation from the 68th Olympics, and said this: Mike Madigan: Tell me how you feel! Governor Rauners wants to change workers’ compensation. How do you feel? Governor Rauner wants to change collective bargaining. How do you feel? Governor Rauner wants to change the prevailing wage. How do you feel? Dan Proft: And it went on like that for another 30 seconds or so and then Madigan had to go have the apples that Steve Brown had cut up for him. But you get the point. It doesn’t seem that Madigan is particularly interested in trying to figure out a way forward and making a deal on the budget. For more on that we’re happy to be joined by Illinois Governor Bruce Rauner now. Governor Rauner, thanks for joining us, appreciate it. Gov. Bruce Rauner: Good morning, Dan, good morning, Amy. How are you guys doing? Dan Proft: Good morning. So, I know that you are holding out the torch and you’re optimistic about the prospect of a deal yet before the end of the month, but when you hear what Speaker Madigan had to say last week at that rally, how does that impact your optimism? Gov. Bruce Rauner: The reason I’m cautiously optimistic is, while the Speaker may say things publicly that are contrary to getting a grand bargain and actually growing our economy and protecting taxpayers, members of his caucus, some democrats in the House are privately saying they’re sick of the status quo, they know we need reforms, they know we need to grow our economy, they know our property taxes are too high, they agree that the reforms that were recommended actually make sense and are reasonable, and they’re getting up the courage – they haven’t done it yet – but they’re getting up the courage to do the right thing and get a grand compromise and get a reform. So we’ve got a week to go. Amy Jacobson: But if they join together they should be so afraid of retribution from the party boss, Mike Madigan, right? Gov. Bruce Rauner: That’s right. It’s hard for only one or two to break away and do the right thing. That’s too easy for them to get attacked, but if they group, a meaningful sized enough group stands together – and I’ve heard some reports back that the group is becoming pretty sizeable – then the fear of retribution goes way down, and there’s a chance for a grand compromise that actually helps the people of Illinois. Dan Proft: Yeah, but wouldn’t this be the time for them to do it, because it’s not like Madigan is going to flip on them and support republican candidates in the state legislative districts. And many of these legislators don’t even have republican opponents in places like the city of Chicago, so what’s to fear? Gov. Bruce Rauner: There’s a lot of truth to that, Dan, that’s right. They were afraid that they could be hurt in their primaries, the way the Speaker took out Ted Dunkin who stood up and did the right thing on one single issue; he voted to protect taxpayers on one single issue and he was taken out in his primaries. But that risk is now gone. The primaries are over, so hopefully some of the folks are willing to stand up and do the right thing for the people of the state. I’m optimistic; we’ve got one week left, and if we focus and don’t get distracted with other issues, and we focus on a grand compromise, a bi-partisan reform, I think we can get some good things done. Dan Proft: One of the other issues, regardless of whether a grand bargaining gets done or not is the ASME contract – the state’s largest public sector union representing some 37,000 state employees – and it’s kind of a curious thing. The public sector unions have painted you as someone who is very anti public sector union, anti public sector worker, and yet you’ve successfully negotiated 17 collective bargaining agreements with different public sector unions, or unions representing different cohorts of public sector workers where they’ve recognized the state’s fiscal peril and haven’t even taken wage freezes and made other concessions. So if you can do it with all of those collective bargaining units, what’s the problem with ASME? Gov. Bruce Rauner: Well, that’s right. We’ve been able to negotiate it, and now it’s up to 18. We just signed another deal with another union. We have made a fair proposal. Some of the union leaders are just used to getting 100% their way; they’ve been able to do that in Illinois for decades and it’s been a big problem. You know what, the state employees, they know that the proposal that we make for them is reasonable. I believe if the union leaders allowed the work to be workers, the employers of the state to actually vote on a contract proposal, I think it would pass. It’s very reasonable, it does freeze wages for the next 4 years, because we can’t afford just these seniority increases when we’ve got such a brutal economy of jobs leaving as taxes are rising. But I’ve said, I’ll pay bonuses based upon taxpayers’ savings. We’ll give a percentage of every dollar we saved taxpayers to employees in a bonus. The employees love that idea. The union leaders don’t like it, but their rank and file members do, and it would be a win-win for everybody in the state. Amy Jacobson: Now part of your turnaround agenda is to reduce property tax release by giving local government more control on how and when to deal with unions. Could you explain that a little bit? Gov. Bruce Rauner: I’m a big believer that the government belongs to the people. It doesn’t belong to any special interest group, it doesn’t belong to some higher authority, to the federal government or the Springfield government; a city in Illinois, a village, a town, a county, it belongs to the people who live there. That government should respond to them, it should work for them. And the people in each community should decide for themselves. How do they do contracting in their city government or in their school district? How do they do competitive bidding when they’re constructing a new school or a town building? How do they handle collective bargaining? Do they want to bargain everything with a government union leader? If they do, fine. I’m not taking away anybody to do that, I’m not taking away anybody’s quest to bargaining rights, but what I’m saying is, each community should be controlled by its own residents, each members in each community should decide for themselves how they want to handle these issues. It’s fair, it’s reasonable, and democrats and republicans, both sides of the aisle, support local control. And if we get more local control, fewer dictates from Springfield, we could bring down our property tax burden and our cost in government over time, so our property taxes are not killing our home owners like they’ve been. Dan Proft: We’re talking to Illinois Governor Bruce Rauner, and Governor Rauner, previously you have said – just going back to the budget issue and the pending or lingering impasse – previously you said, look, if you don’t want to act leaders of the General Assembly to House Speaker Madigan / Senator President John Cullerton, then just empower me to act and I’ll craft a budget and present something for passage. Essentially I’ll do the heavy lifting that you aren’t willing to do. Is that still an offer that stands? Gov. Bruce Rauner: It is. It’s an offer I’ve made since day one. I’ve made that offer for a year and a half. But the democratic caucus has not been willing to make some of the cuts in spending that are needed to get a balanced budget. They don’t want to do it themselves and they don’t want to let me do it. They just don’t want some of the spending reductions that would be necessary. So I’ve said to them, okay, if that’s how you feel, I’ll live with that. That means we’re going to need to get a new revenue, in order to have a balanced budget. What we can’t do is this constant deficit spending, we’re going to end up looking like Detroit, or we’re going to end up in bankruptcy and more employees are going to leave and incomes will fall. We have to stop the deficit. I’ll look at some new revenues; I don’t want to, but I will. That should only be done, we should only talk about the revenues in the context of taxpayer protection and more efficient effective government, so that our taxpayers actually get value for their dollar, so that money isn’t wasted; and we also grow our economy, because frankly, if we don’t grow more jobs and get rising family income, nothing else matters. We’ll never fix our problems. What matter is growing economy, more jobs, higher incomes, and that can lead to long run balanced budgets for the state. Dan Proft: And to your point, yesterday the Truth in Accounting non-partisan think tank released numbers on Illinois’ fiscal picture. $45,000/taxpayer is the debt/taxpayer in Illinois. Compare that to New York State, which is not exactly a state with reputation for great governance; it’s $20,000 in New York; so kind of 2.25 the times of New York in terms of the debt/Illinois taxpayers. These are big numbers and it kind of speaks to what you’re saying about the need for structural reform. This is not strictly a revenue problem, as some will have you believe. Gov. Bruce Rauner: No, that’s exactly right. We have been deficit spending, spending too much and then borrowing to cover it, and then eventually raising taxes to help pay some of the debts. That cycle of financial mismanagement has been going on for decades, and we’ve got to stop it. We’re going to end up going the same way as Detroit with the job losses, the tax hikes, the devastation for the government and the economy. We’re going to end up just like Detroit. Look at the nations around the world that have done the deficit spending for decades. Puerto Rico is virtually bankrupt. Greece is virtually bankrupt. Financial mismanagement in Illinois has been going on. Stopping it is hard – that’s why this battle, these negotiations have been so difficult for the last years, but we’ve got to stop it; we need financial discipline, we need the deficits to end, balanced budgets, we need spending reductions, and we can have some new revenue. I’ll live with that – I don’t like it, but I’ll live with it. But we’ve got to become pro-growth, pro-job creation, pro-taxpayer protection, we’ve got to get a handle on our property taxes – they’re too darn high; we’ve got to bring our property taxes down. If we can do that without reforms, then we can get balanced budgets. Amy Jacobson: Yeah, but you’re being painted as an out of touch republican who doesn’t care about education and the children because a lot of our administrations on our school – we’re going to have 1.3 million cut, and now I’ve just received an email, Lane Tech’s going to be out 8.5 million dollars. I feel like our administration, their hands are tied, but they need money. They need money released to the Chicago public schools. Dan Proft: Yeah, because CPS has been so well run. Amy Jacobson: I know, but it’s going to affect the kids. They say we’re not going to have enough textbooks; we’re not going to have AP courses. How can you address that? Gov. Bruce Rauner: Oh boy, it’s very straightforward. If democrats have cut school funding four times in the last 10 years from the state, I am fighting to increase school funding. Increased it the last year, I’m increasing it again this year. Our kids in our schools should come first. The democrats have said, “We want a different formula and we want a bailout for Chicago so we may not even allow schools to open. We may hold up all school funding this year.” These threats, these posturings on their part, it’s just the wrong thing. What we need to do is get a balanced budget, increase state’s support for schools, and get reforms to grow our economy and protect our taxpayers. We can do this. It’s scary for some folks, for the changes in status-quo, and there are folks who love the status-quo in Illinois; they like the way we’ve been going. The reality is we’ve been devastating working people, we’ve been devastating the middle class. We’ve got the highest property taxes in America. We’ve got jobs leaving the state. The status-quo is failing. We’re going to change it, and I’m optimistic. We’ve got one week to go, we’ve got some good bills on the table, and we’ve got democrats and republicans working in good faith right now as we speak to get reforms to protect taxpayers and grow economy. That’s what I’m excited about. I think we can get this done. Dan Proft: Alright, good luck. He is Governor Bruce Rauner. Governor Rauner, thanks so much for joining us, appreciate it. Gov. Bruce Rauner: Thanks Dan, thanks Amy, take care. Amy Jacobson: Thank you.