"People don’t believe that the crisis is real, because we just keep muddling along.”
On this installment of Against The Current (ATC), Dan Proft sits down with State Rep. Jeanne Ives (R-Wheaton) and Chicago Tribune Editorial Board member Kristen McQueary to discuss the state budget (lack thereof), schools opening on time and the politics of it all.
If no progress is made before the November election, will voters cast a pox on all houses or will one party bear more of the blame? Can Rauner recover?
And McQueary explains why she is a Democrat that Illinois Democrats lost. All of this and more on this edition of ATC.
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Dan Proft: Thank you for joining us for another edition of Against the Current, coming to you from the Skyline Club atop the Old Republic building in downtown Chicago. My guest on this installment are State Representative Jeanne Ives, republican from Wheaton, and Kristen McQueary, Chicago Tribune editorial board member. Ladies, thanks for joining us, appreciate it. The big news after session ended in Springfield, where the General Assembly is housed, is no budget. So since Governor Rauner’s elected, now two sessions of the General Assembly, we have not had a state budget because Rauner refuses to sign in unconstitutionally unbalanced budget, and the democrats in charge of the House and the Senate refuse to send him a constitutionally balanced budget, so how does this end between now and November, or do you believe what Madigan and Cullerton, the respective chamber leaders, said that we’re not even going to have a discussion of a budget until after the November elections? Kristen. Kristen McQueary: That’s what they’re saying, so I would expect we’ll do what we did last summer, which is maybe have a couple special sessions, maybe lawmakers will get called down to deal with ancillary issues, or they’ll just sit around. Dan Proft: Play Candy Crush. Kristen McQueary: Perhaps, there’s evidence of that, but Madigan has been very clear. He doesn’t want to put his members on any controversial votes and the state scoots along under these court orders with the budget anyway, so I just expect nothing will happen before November. Dan Proft: But what does that say about the Illinois electorate, that, what Kristen said, doesn’t want to put its members on any controversial votes. The idea of not having a budget, or sending a 7 billion dollar unbalanced budget to the governor, that’s not a controversial vote, or doing nothing is not controversial, but potentially doing something, whether it’s a tax increase, or programmatic cuts, or restructuring, that’s controversial. Jeanne Ives: I think it depends on what district you live in. So, if you live in a district with a lot of state workers, you’re much more aware of what’s going down in Springfield than if you live in a district like mine, which, you know, our schools are largely funded with property taxes, we don’t require a lot of the state services in the same way, and so people are just uninformed, and that’s part of the problem. They don’t really see the effects of this. When they will see the effects of this, however, is if we don’t get a K-12 education budget, because we have a number of schools, something on the order of 100 schools, that literally only have 30 days cash on hand. They can’t open in August if they don’t get their general state aid August 10th. And so Michael Madigan is betting on the crisis coming to fruition and he getting what he wants, which is no reform agenda, and yet the spending will continue. So he’s going to wait out Governor Rauner for as long as he possibly can, until this crisis of the schools opening or not comes to fruition. Dan Proft: Well, isn’t that what they did last year? No budget, “Governor, are you going to agree that we need to appropriate money for the schools to open in August, or are you going to precipitate a crisis?” And last year, Rauner said “I’m not going to precipitate a crisis, we’ll do something temporary”, and so, we’re another calendar year away from that. And we’re in the same place we were last year. And so, people don’t believe that the crisis is real, because we just keep muddling along. Jeanne Ives: Last year they at least sent him a budget. It was deeply unbalanced, but Rauner was able to just sign the education portion. This year, they haven’t sent him anything, so I think we are in a different position than we were last year. Dan Proft: They haven’t sent anything and they also rejected his idea, which wasn’t always an idea he supported, but it’s an idea he’s supporting now, on a stop gap budget. Jeanne Ives: Right, they rejected a stop gap budget, which he was agreeable to kind of out of desperation on the last day of session. They won’t send him a clean education bill, which he’s asked for, which would just be education spending. So they’re just blocking him at every turn. This is the way it is. Dan Proft: So what about the idea, then? Is playing this game of brinkmanship with the Chicago democrat leaders of the House and the Senate to the point where if those hundred schools can’t open, or can’t stay open for more than 30 days, well, we need to precipitate a crisis to get everybody’s attention and hash this out once and for all. Jeanne Ives: I think that plays into Governor Rauner’s hands much better than Mike Madigan. I think then, when people do realize that the messaging gets across; look, the legislator has a responsibility to send a balanced budget - spending equals revenue - to the governor; that didn’t happen; I think it’s much easier to message that it really was Mike Madigan who held up education funding and not Governor Rauner. I think he wins on that issue, but it’s how far do you send that brinkmanship, because right now they happen to make decisions about schools. It happens in June, you’re starting to register your kids, you’re doing all sorts of planning, that’s actually school budgets actually happen earlier on. They all happen in February, March, so our budget year’s never been aligned with schools, which has always been a problem, but it’s even worse really not knowing what happens. And it’s not just 100 schools, Dan. 2/3 of the school districts in the state of Illinois deficit spend. There’s a lot of them that are in trouble, I’m just saying, for 30 days. Dan Proft: But there’s still a small percentage of schools that majority rely on state funding as opposed to local property tax dollars and federal grant money. Jeanne Ives: Yes, but it’s one thing for our district to have 91% of its money coming from property taxes, so we only need a little bit from the state and fed. We can make it through a school year. But a lot of these, even though they may not get the majority of the funding from the state, they can’t even open knowing that they’re only going to have 60% of their money. They can’t open. They literally can’t open. Dan Proft: What does that say about how schools at the K-12 level are managed generally in this state, though, that unlike a business, for example, that budgets and strategizes for a rainy day, for a downturn, or makes difficult decisions when there is – I’m not suggesting this is ideal or it should be precipitated for no reason – but it seems like – and we said the same thing at higher-ed – it seems like they want to continue to rely on ever increasing amounts of money in perpetuity, despite the fact that we all know, or should know, what the financial picture of the state is? Kristen McQueary: Well, I think there are some districts that spend responsibly, but I think if you look at, probably, the majority of districts, school boards are made up of people who are not accountants, who generally are cheerleaders for the teachers – they want to support the education system, so they approve pretty generous teacher contracts – and at the end of the day, most of your property tax revenue is supporting the teachers and the personnel and the healthcare and the benefits of the system, and not the kids in the classrooms. Dan Proft: Right, and we’re not even talking about poor districts, to Kristen’ point, you had the Palatine Grade School district sign a 10 year contract with the teachers’ union. 10 years! You don’t need to be an accountant or a lawyer – and there are a lot of accountants and lawyers in that school district, oh, by the way – to know that is insanity, to make that kind of commitment, not knowing where you’re going to be 10 years down the road. Nobody does it. Even most units of government don’t do something so reckless. Jeanne Ives: Well, you do it if the lead negotiator from the administrative side is the previous union president. That’s how you get that deal. Dan Proft: But isn’t that deal an extreme example, but yet a microcosm of Illinois, where you’ve got those people that have concentrated benefits and they can defuse the cost through a large population, they game the system then on both sides of the deal, which is why, essentially, 13 million Illinoisans are more or less used as spare economic parts for 2% of the population that’s a member of the public sector union. Jeanne Ives: There’s no doubt about it. That’s what we saw this year in Springfield, so sitting on labor and commerce committee, I’ll tell you what, the crisis in Illinois did not chasten Mr. Madigan in his membership; it actually emboldened them to go for stronger things. So we’ve had a number of bad bills that really hurt employees and economic development. One of them, which I think should be highlighted as, they passed through a bill that mandates that on any economic development commission, and even any chamber of commerce that takes in any amount of taxpayer money, you must have on there two union members and two minority members. So then you’ve got a board of five, your majority is definitely these minorities and union members. So they’re emboldened by this whole conversation. They’re pushing it, the conversation, with pro-labor anti-taxpayer measures. They’re not chastened at all. Kristen McQueary: Look at how many votes they gave to the AFSCME bill, which would have weakened Rauner at the bargaining table. No bill in Springfield gets 2, 3 chances at an override. I mean, if you ever doubt the grip that public employee unions have over Springfield, that was a prime example. There was no vote on school funding reform, or many important issues, there was no balanced budget, but they spent a lot of time and resources trying to jam that bill through. I’ve never seen a bill get that many chances at overrides. Dan Proft: Is it to the point you’ve got AFSCME, SCIU and the Teaches’ Unions, the main public sector unions, that are essentially business partners with Speaker Madigan and Senator President Cullerton? And this is one of the ways that you exercise control, is through the financing they get from the public sector unions, that’s one way, and the other way – and I recently had a conversation with the former State Senator Steve Rauschenberger about this, and this is an inside baseball thing – but in terms of the lay men out there trying to understand how Madigan has such control, the other way he has such control is actually legislative process in the House: which bills get called, what the calendar is, if your bill gets out of a committee you want, if your bill is ever going to see the light of day for a vote on the House floor. Madigan controls all that. Jeanne Ives: And that’s what the electorate doesn’t understand. Because you’ll hear at the door, or you’ll be in a conversation, “Can’t you guys just compromise? Can’t you just bring this to the table?” Why isn’t your bill accepted? I filed a bill that says, look, taxpayers get to see these contracts prior to a ratification and a vote. I’ve had it for 4 years. It’s always gone to committee just to die in committee. Dan Proft: Collective bargaining contract. Jeanne Ives: Yeah, collective bargaining, but I also included compensation of over 150,000, so it didn’t look like I was picking on unions. These bills never go anywhere by design. And so, people want you to get along, file the right bill, “Can’t you do some of our term limits? Can’t you do…” No, the process is broken and the process was even more broken this year. We never adopted a revenue number. We never worked in appropriations committees. We never set priorities. So everything that would happen in a normal legislative process completely failed this year. Completely. Kristen McQueary: That is really crazy, to think about the fact that even Springfield, in its dysfunction, has on occasion over the years passed a budget the way it’s supposed to, where agency heads come before appropriations committees, they ask for revenue numbers, they get quizzed, they get asked about various programs, there is some measure of accountability. And then there are years when the democrats pop a budget out at the last minute, and that’s what they did this year. So there was no back and forth. There’s no chance for republicans to even weigh in – or even democratic lawmakers, for that matter – when at the last minute they just pop a bill out like they did. Dan Proft: Well, and right, so this is a process thing, but it turns out to be really important, because this is different than other states where you’ve got one person that can control all of those things. A lot of other states know how their state legislators work. Give me four of five legislators get together and they want to move something, then it’s coming to the floor for the vote. Leadership is responsive. In this state – and you saw this highlighted with the exchange between Barbara Flynn Currie, who’s Madigan’s majority leader in the House, and Dwight Kay, who’s a republican backbencher from southern Illinois - wanting to go line item by line item through that 500 page budget that Madigan popped on everyone’s desk 2 hours before he wanted them to vote on it. And Kay said, “What’s this for?” “So, well, that’s a continuing appropriation.” “Well, what’s this for?” “Well, it wouldn’t be in the budget if it didn’t have value”. And then the next thing, Barbara Flynn Currie, the majority leader, said, “Look, no matter what you say, you want to go through with this, it’s a waste of time. I’m going to say the same thing with every single line item”. She doesn’t know what the line item’s in there are – nobody in the General Assembly can possibly know, because you can’t read a 500 page budget in 2 hours – and the response from legitimate inquiry, line item by line item of inquiry, where real money is being spent, is if it’s in the budget, then by definition it adds value, or it’s a continuing appropriation of something that adds value. And that’s all I have to say about it, and if you don’t like it, go pound sand. Jeanne Ives: You’re absolutely right. No process, no setting of priorities, even though I sit on one appropriations committee, at least if you had normal appropriations going on in the other committees that I don’t sit on, I can trust my colleagues to have done the due diligence, maybe prioritize it, maybe understand that this is the revenue number and these are the expenses, and the are – what? – in your area of expertise, maybe it’s higher-ed or general services, you know what you’re doing. I can trust that. There was none of that this year on any of the budget that was passed, so there was no conversation going on. Frankly, that is the problem. The state is broke. I don’t know how many times I can say that. The state is broke. We have got to get rid of all the nonsense and highlight that. Dan Proft: But people don’t believe it. You’ve got, whatever, 80% of the population that says Illinois’ on the wrong track; they get that part about it, because they’re living it, and they see their tax bills, and they see their job opportunities, or lack thereof, and they see what’s happening in higher-ed, and what’s happening in K-12, so they say, “This could be better. I’ve got friends in other states. I know it’s better. I’ve got friends that used to be here that are no longer in the state, and they tell me it’s better”. But they don’t believe it because we just keep pushing it along. Credit downgrade to the state’s bond rating… Jeanne Ives: Right, that happened today. Dan Proft: Another 15 billion dollars in unfunded pension liabilities for the city of Chicago. Kristen McQueary: We’ve been a deadbeat state for years. Our bill backlog – if you don’t believe we’re broke, why do we have a 8-9 billion dollar stack of bills that we can’t pay? Dan Proft: Ask social service providers. Ask vendors to the state. Kristen McQueary: Sure. The state does operate on what we think is 32 or 33 billion dollars of income that it doesn’t go to debt every year, but it’s spoken for. We wouldn’t have a pile of bills if it didn’t. And yes, the public is not as engaged as it should be. If the schools come to a crisis point where they can’t open, that’s when it’s going to have an impact. Just like teachers’ strikes usually are successful because you are disrupting the lives of every person who has kids in a school. Dan Proft: Right. Kristen McQueary: That will be the breaking point in the state if it happens. Dan Proft: Yeah, but are you suggesting that it will be a breaking point the way that a teacher strike is, where the person precipitating the crisis derives most of the benefit? I mean, if schools didn’t open in the fall, or a lot of schools, or they weren’t open for very long and there was this kind of disruption we’re talking about, how do you think that plays out politically? Kristen McQueary: Well, Representative Ives thinks that that would put Governor Rauner in a better position, because if the democrats never gave him a budget, I just think he’s not doing well as far as public relations and the messaging. I think he’s losing that battle. I think the democrats are winning in portraying him as an uncaring billionaire, and so I actually think it could be very, very bad for him. Dan Proft: Yeah, I tend to think that’s right. In terms of what Rauner has done messaging-wise over the last year, if we’re being honest with ourselves, even though I’m sympathetic to Rauner, you’re sympathetic to Rauner, you’re sympathetic at least to some of Rauner’s policy proposals, but he’s been non-existent north of I80. And he’s allowed himself to be put into this binary position of a conventional politician, another guy down there, he calls Madigan names, Madigan calls him names. He calls Rahm names, Rahm calls him names. Everybody’s friendly but they’re in a fight. And it’s just about them, it’s not over anything substantive policy-wise, or to the extent it is, it’s not decipherable to me. I think Rauner’s messaging has been non-existent or counterproductive, and I think if we’re being real honest with ourselves, he has been played like a Stradivarius by Madigan this session, in particular. Is that fair? Jeanne Ives: It’s somewhat fair. I think, when they passed the 7 billion dollars over budget, I think that there actually was some backlash there. And I think that’s why the senate didn’t actually approve it. I think you saw some of Madigan’s stallwork members not vote for it, because I think that they knew better. So I think that was a little bit of a turning point. Now, the stop gap budget that he has proposed I think is actually a great idea: you fund K-12 and you do the 6 months while we continue this conversation, and he got rid of his reform agenda, which we have to have reform. This state will not change unless we have the reform that’s necessary. Dan Proft: That’s not what Jim Edgar says. Former Governor Jim Edgar says that he needs to give up the turnaround agenda and just focus on the budget, like the two are in silos, juxtaposed one to another. Jeanne Ives: They’re not in silos. Dan Proft: One is a necessity of the other. If you don’t reform the structure of state government, that throws off obligations we can’t afford, then you can’t get balanced budgets. I don’t know why this evades the comprehension of Governor Edgar. Jeanne Ives: I don’t either, because Ray Graham Association sends out a 2 page letter, says “Look, we have an ankle injury turning into a 650,000 worker’s comp claim. We had our workers comp costs gone up triple in the last five years. We need workers comp reformed, and that is a knot for profit serving the disability community”. So the fact that that doesn’t impact budget is completely false. All of these things impact budget. Kristen McQueary: I think, too, Edgar oversaw the state in a very different time. You can’t even compare the unfunded pension liabilities that we’re in now, series of unbalanced budgets. Yes, he was a more moderate friendly to labor unions than Governor Rauner, for sure, but for the press to continually go to him as the answer to all these problems and to try to create this friction, it just doesn’t make sense. He oversaw the government when they were fighting over who was getting port projects and where in their districts. That was the big controversy under Edgar’s term. Are we going to have a Jack Benny statue or stain glass windows in a parking garage in Naperville? Dan Proft: How about both? Jeanne Ives: That’s right. Kristen McQueary: The state was flushed with cash. This was a very different time. I just don’t think his opinion should be held to the regard that it is. Dan Proft: I’m in complete agreement, but partly, unfortunately, he’s a creation of the Republican Party, because after he decided not to run for office in 1998, we put him in an emergency glass, and we were trying to break him out of that emergency glass for the next decade for every statewide office that was open during that period of time. And it completely prevented the Republican Party from turning the page and looking forward and ushering a new generation of leadership, which frankly, is just happening in the last couple of cycles. It’s more a been party from the demise of George Ryan to the election of Bruce Rauner, which is one of the reasons you have, in my opinion, republicans in a superminority position, despite the fact you had Chicago democrat hegemony in control of all three branches of government for two generations, and they’ve destroyed the state’s economy without any political consequences. So of course Madigan and Cullerton are going to keep doing the same things. It’s been working lovely for them. Jeanne Ives: That’s right, and so I’d be interested actually to find out exactly how did the legislature work back in the Edgar days. What did they do differently? How was committee work? What was the relationship? What happened back then, because it is completely broken now. Dan Proft: Yeah, but one of the things you had, you had the House republicans in charge for 2 years of his 8 years, 94 to 96. Jeanne Ives: You had tight majorities. Dan Proft: Well, you had the Senate republicans in charge for the entire decade, republicans in charge of the Senate. It turns out to make a big difference. And so, not all policy was being driven by the governor. You also had policy being leveled up from the general assembly to the governor. So that made a big difference. But, if we’re being honest with ourselves again, a little bit of equal treatment, it was Governor Edgar and republicans who ushered in the last 25 years of playing politics with pension funds. Because it was Edgar’s pension ramp that went from a 14 billion dollar unfunded liability in 94 a 44 billion dollar unfunded liability by the time Blagojevich took off, that’s a decade later, and then to the 120 billion it is today. It was Governor Edgar who said, “We’re going to push off our obligations tomorrow so that we can spend on all of these pet projects today”. Kristen McQueary: I’m a rare defender of that ramp, because I was down there when they passed it, and there was no… yes, we were looking out at 2012, but there was a belief that there will be growth, and that those numbers will be manageable. There was no set payment schedule at that time. They just paid into the pension funds whatever was left over after they decided the budget. So the idea of putting into statute a fixed amount was seen as a fiscally responsible thing to do. Now, the legislature, over the years, they didn’t even abide the ramp anyway. When they couldn’t make a pension payment, they just kicked the can. They skipped it, they changed the statute. But the idea of putting it in place in the first place did make sense at the time. Dan Proft: Yeah, but you still have to get the numbers right. You still have to use actuarially founded numbers and not these rosy 7.5-8% return in perpetuity. Jeanne Ives: Well, of course. Dan Proft: And they haven’t done that. Edgar’s time in terms of pension politics and when the state was lust with cash, and, frankly, tax increases. Jeanne Ives: I’ll be honest for you, I’ve no appetite for a tax increase, and I know what’s being negotiated behind closed doors. Dan Proft: Negotiated, but with whom? Jeanne Ives: You know, among themselves. Among the elite group of working folks, I guess, the budgeters, whomever. Dan Proft: Not legislative leaders and the governor. Just other legislators? Jeanne Ives: Well, other legislators that have been actually appointed to these working group committees. You know, they’re negotiating a tax increase; that entire tax increase goes nowhere but the pensions. So I’m done with that until we do pension reform. Dan Proft: Well, but also, I mean, let’s be honest, these working groups of legislators that are pretending… this is like model UN. This is like a student club down in the...“Oh, look, they’re having a committee meeting. Aren’t they darling?” What they do is irrelevant. Jeanne Ives: Is it? What do you think? Because I think some of these legislators really are… Dan Proft: Even if you have a good idea to write about. Jeanne Ives: They don’t think they’re irrelevant, though, which is kind of funny. Kristen McQueary: Do you think they’re irrelevant? Dan Proft: They should get in on the joke. Kristen McQueary: In the past, when personalities got to be a problem, even under Blagojevich, even under Quinn, they had budgeters go in a room and knock something together, because the personalities of the leadership were just not going to allow that to happen. And it did work in the past years. Dan Proft: Yeah, but when it was Blagojevich and Quinn you had democrats and democrats and democrats. Now you’ve got a republican and democrats want to control their supermajority, so they’re willing, I think, more willing to be put out there as Madigan’s Saturday night players and do their kabuki theater to set up, you know, making sure they get funded for reelection, making sure they keep their majority and supermajority, because it’s about being opposed to Rauner; it’s not about where democrats are in charge of everything, so they have to get something done. Jeanne Ives: So, regardless of what you think of the working groups; if you think they’re actually going to come up with something or if you think they’re a joke, which quite frankly, as somebody who sits on the pension committee, but isn’t on the pension discussions, who sits on labor and commerce isn’t in that discussion, who sits on an appropriations committee, I’m not involved in any of these discussions, I’m thinking, “Go ahead, you guys, go do what you want! I’m not interested in your result, quite frankly”, because, again, there’s no process here. So we have no process again to actually let other people know what’s going on, to let me have weigh in, or other members of the General Assembly, democrat/republican, weigh in on the things. So when you have these working groups, that means you have no process. And I don’t know what other states do, but we are the worst run state in the United States, for a reason: we’ve no process. Kristen McQueary: Well, there’s a two year budget, which would be so smart. Jeanne Ives: Smart, smart. Kristen McQueary: And when they convene in January, the first thing they do is pass their budget. And then they spend their next few months doing all the little ancillary things. We do it exactly the opposite. I mean, how many days were you in Springfield? January, February, March. Jeanne Ives: 90 days. Kristen McQueary: Okay, so then we try to cram everything in in the last week. Jeanne Ives: Well, there is a primary election to handle. Kristen McQueary: Well, of course, everybody had to go campaign. Nobody had time to govern. Dan Proft: But also, if you do the budget first, then you may not get to regulate the number of bobcats that people can kill in Illinois. And then what happens? Then you go out bob killing, saying, “Can I take one? Can I take two? I don’t know.” Kristen McQueary: Pumpkin pie is the official desert in Illinois, we would have missed out on that important part. Dan Proft: I like pumpkin pie. Jeanne Ives: At least we didn’t regulate yoga teachers this year. We decided not to do that. Dan Proft: They did not fall under profession reg? Jeanne Ives: That’s right. Kristen McQueary: But you did pass Healthy Puppy Day. At least the Senate did. Jeanne Ives: I didn’t pass that on. Dan Proft: Puppy Day? Kristen McQueary: Healthy Puppy Day. Dan Proft: Healthy Puppy Day. Kristen McQueary: That got a vote. Dan Proft: Oh, do we have a puppy lemon law too? Jeanne Ives: Yes, that was a couple of years ago. Dan Proft: Oh, sure, it was? Kristen McQueary: You were running. Wasn’t that the gubernatorial campaign you were running in when Bill Grady got tagged as the puppy hater? Dan Proft: That’s right. I ran on the puppy lemon. I wanted to pimp the puppy lemon platform and under the puppy lemon law banner, because why not? This is all so much fiction, so why not do these things, right? Jeanne Ives: Nonsense. Dan Proft: So let me ask you a serious question, not about bobcats and healthy puppies. But we have a divided opinion on if you, essentially, precipitated a shutdown of schools because they didn’t have their percentage of state funding, if that’s a bad idea for the governor and a bad idea for Madigan, and neither really wants that, what about this? What about this outstanding contract with AFSCME - since you brought it up, how many times they tried to pass that bill to cut Rauner off – what about the idea of 37,000 employees facing something on the order of a Patco situation, what Reagan did to the air traffic controllers? What about precipitating that short time, because here, unlike with education, Rauner has some moral high ground? Here’s what he can say: “I’ve negotiated 18 collective bargaining agreements in a year and a half with public sector unions who are at present smaller groups of state employers, and they’ve taken wage freezes, because all of these unions and the employees they represent understand the fiscal condition of the state, and they understand, well, I want to secure my employment, I want to be compensated, but I understand that everybody’s got to take a hit with where we’re at. I’ve done that. So I’m a reasonable guy, I’m a practical guy. I was able to do it 18 times. That’s some pretty good evidence”. AFSCME wants to continue to live in Neverland, and they want 28% salary increase over the life of a 3 year, 4 year deal. It’s somewhere between 2 and 3 billion dollar cost for the taxpayers that we obviously cannot finance, so here’s the deal. You can either accept my last best final offer, something that approximates the other 18 agreements that I negotiated, or we’re going to put your jobs to a market test. Now we’re going to see how many Illinoisans who are unemployed or underemployed would like to be a midlevel case manager in the Department of Human Services making 60 grand with a guaranteed seven figure pension. What about that? What about precipitating that? What about precipitating what essentially could be a state worker or majority state worker walkout or lockout? Jeanne Ives: I’ve always said, this is not going to get solved until somebody starts missing a paycheck. Then the reality hits home. So right now state employees are getting paid, because that’s the interpretation of the comptroller, that they should get paid even in this impasse, with no budget and no appropriations. Dan Proft: But Leslie Munger did put them in the cue. So they’re not first pass pose, they’re in the cue to get paid like everybody else. Jeanne Ives: No, I’m saying state employees get paid, legislators get in the cue, whatever. But state employees get paid, so until somebody misses their paycheck, whether it’s a teacher, in my district, whether it’s a state employee worker, they’re just going to keep trying to push this down the road to the next election, to the next cycle, until 2018, when you have a governor’s race. We’ll just see what we can handle on continuing appropriations. People have even said that even if the schools were getting close to a shutdown, it’s quite possible that, once again, the courts will step in and make a determination that this is something that you’d have to fund; letting everybody off the hook and not creating that pressure point. I don’t know that, I’m not a judge, but until someone misses a paycheck you’re not going to have a result. Dan Proft: Right, and if everybody else, the 98% who are not a member of a public sector union in the state knew the compensation levels; they make a quarter more than what their private sector counterparts, with guaranteed job security, essentially. If they knew the numbers and the deal and what they’re demanding at other people’s expense, maybe that’s the revolt that we need. Kristen McQueary: That’s the pressure point that I think the governor should have started with when he was sworn in and stuck with. Instead of going around and bad mouthing AFSCME and calling them AFSCAME, you know, trying to do prevailing wage and right-to-work on a large scale as soon as he sworn in. This is not Wisconsin. A lot of downstate republicans have lots of public employee union and family members. So the pressure point with Rauner, which he should have taken is where we are now, with negotiating the next contract with AFSCME. Not all this other bad mouthing public sector workers. As for a walkout, or forcing them, you do have to keep in mind they are running our prisons, you have DCFS case workers who are checking on abused children. You can’t just be gunning for a walkout or a force out of state workers. Dan Proft: Well, but at some point you have to draw a line and say which side are you on. And so, my point is not say to be Willy-Nilly about dismissing 37,000 people, but to say, “Last best final offer, I’m telling everybody now”, and this is what Reagan did with the air traffic controllers, “You have this amount of time to come back over and say you’re staying on the job”. And if you’re staying on the job, then you’re on the job and you’re going to get paid. And if you’re not, then you’re going to get replaced. We are going to move to replace people. That’s what’s going to happen. I mean, the predictions were it was going to paralyze air traffic in the United States. It did not come to pass, because if you do it right, it turns out that there are a lot of people that can do the jobs that people currently do in state government, and this is not to denigrate state employees. I was a state employee for a time. Kristen McQueary: How is your pension? Dan Proft: Didn’t last long enough to get a pension, because I… Kristen McQueary: Big mistake. Jeanne Ives: Yeah, it was. Dan Proft: Although by the time I would be ready for retirement, I’m not sure it’ll be there. Kristen McQueary: Oh, they think it’s going to be there. Dan Proft: Well, sure, but what about that? You can do this in a way that is responsible, and frankly, this is not eliminating people for its own sake, like you’re dismissing people. This is saying “I want people who are going to work and do these jobs, and if you don’t want to do them, we’re going to find other people who are capable, who haven’t had the opportunity, to do them”. What’s wrong with that? 37,000 state employees. This is their birthright to do the job they do in state government, on their terms? No. Jeanne Ives: So here’s what happens at local government level. You basically come up with a contract, you settle a contract, and in this case there’s quite possibly no contract, which means that then the governor sets the contract rules, because if that contract is expired and he’s is no longer offering that contract after all this has been negotiated with the lawyers and everything, you’ve got a contract. If their demands are so high that we can’t afford it, people get laid off. That’s what you do at the local government. Look, you want all these pricing increases, you want salary increases, a bump here, higher payments, less co-pays on your health insurance, everything else. Guess what? That costs real bodies, so we’re going to have to cut 3 police officers, 2 firefighters and 10 from public works. So in 2008 when the crisis hit and the tax money started to decline, city of Wheaton lays off 37 people. It happens all the time. That’s what you do when you can’t afford the contract. That’s why I said on the House floor, “You know what, I’m talking to the state workers here. Listen up! You need to get a hold of your leaders, because it’s your job at stake, not theirs. It’s your job”. That’s the problem. Kristen McQueary: Even Quinn, to his credit, at one point, when they sent him an unbalanced budget that included raises, he said “I can’t honor these raises for AFSCME workers”. Now that has worked its way through the courts. 64 million dollars of back-pay for AFSCME workers is in that House budget that Madigan co-passed; 64 million dollars of back-pay dating back to 2011 over the Quinn controversy. Jeanne Ives: So you just start laying off workers; completely not essential workers. Start with the secretaries. Managers, you don’t have secretaries. You just start laying off staff. That’s what you do. Dan Proft: Shutting down agencies. Jeanne Ives: Except the problem here is that they have such onerous work rules that if you wanted to make a move for 7 people, and in fact this is what one department had, who will remain nameless, said to me, “We need to back-fill and make moves for 7 people”. It took 42 moves with other state workers to fill the 7 positions that we want. And we don’t get to pick the people that we want, because it’s all based on seniority. That’s kind of what you do. Dan Proft: Here’s what I think is happening politically, and I think it’s paralyzed Rauner to some extent; it’s harder than he thought it was going to be. He thought that these people are people that are going to negotiate or people that are reasonable, or people that he was a member of a wine club with, and at the end of the day they’ll be able to cut a deal. And the democrats are very good at aligning interests and playing power politics, and they will not relent, and they won’t relent because they see republicans relent all the time. And the reason Rauner’s numbers are upside down now is not because he’s done anything wrong, but he has kind of been exposed to this point - and I think this is counter to who he is, perhaps bad staff advice and counsel – he’s kind of been exposed to somebody who’s not going to fight. And isn’t this the whole conversation, is when is somebody going to stand up and fight for my interests, come hell or high water against all of the entrenched interests? And the other challenge Rauner has is that’s precisely what he said he was going to do as a candidate. And however he’s fighting internally, and he is standing up against a lot of pressure to just sign off on another unbalanced budget – he’s not doing that, he deserves credit for it – but the perception is, we’re not moving forward; hopelessness is on the rise again after there was some renewed hope that change could come to Illinois with Rauner’s election. And he’s not being perceived as taking up that mantle to be the Maverick that he ran as, and so people just throw up their hands and say, “It’s just all the same again and nothing’s ever going to change in Illinois and let’s just join everyone else in plotting their exit strategy”. Jeanne Ives: Yeah, I think he thought he came in with a mandate where when he had these dueling press conferences with Madigan and Cullerton, which just happened again this week, that the public was just going to rise up and support him. And that just hasn’t happened. Dan Proft: Like we haven’t heard this rhetoric directed at Madigan and Cullerton before. Jeanne Ives: All the time. Kristen McQueary: Right. Dan Proft: Decades. Especially with Madigan, it’s been going on for decades. Republicans have been unsuccessfully trying to run against Madigan and make him the albatross around everybody, every democrat’s neck, from Zion to Cairo, for 20 years, since I’ve been in this racket. And it hasn’t worked, period. Kristen McQueary: Right, but that was kind of Rauner’s ace, that he thought he had coming in, sure. Dan Proft: Well, let’s talk about financial issues - continue to talk about financial issues - and the governor’s turnaround agenda. There are five component parts to it. So we’ve got to prioritize some of it in terms of term limits, redistricting reform, workers’ comp reform, property tax reform, and tax reform. Where do you think the priority should be, particularly as we’re still in this position of not having a budget for the current fiscal year? What is it that you think the governor should demand as a necessary element in any budget agreement, in addition to a balanced budget, but a necessary element in terms of structural reform of state government? I know you probably support all of it, but here’s the thing we’ve got to have. Jeanne Ives: I support all of it, but… the thing we’ve got to have isn’t on that list. That’s the pension reform. We have to have pension reform. Dan Proft: But that’s a thing that the governor supports, to be fair. Jeanne Ives: He supports it, he completely supports it. He tries to leave it in with his property tax reform which came before our pension committee, to some degree. And he came up with a bill, I think it’s a little too complicated. I’m a supportive of it, completely supportive of it, but how about we just start moving people to it, to find contribution, instead of to find benefit. Let’s start there. Just everybody new employee, that would be huge. Just to start to not dig the hole any further would be great. Dan Proft: Just new employers, not existing employers? People that have not yet been hired. Jeanne Ives: Just start there. Believe it or not, in the state of Illinois, it’s a heavy lift, which is, to me, incredible. It’s eating up 25% of our budget. Why do you think we can’t fund disabilities? Why do you think the school support comes more from the local than from the state, where it’s actually the opposite in almost every other state? It’s because pensions eat up such an enormous amount of our state budget all the time. And we’re not going to have money for infrastructure until we solve this problem; because they’re all just working around the edges. We’ll do infrastructure with some sort of a capital program and then designated revenue stream, and what’s that going to look like, and should we go to a per-mile gas tax, with everybody having a monitor on the car, or something. They’re just coming up with crazy schemes, when all you can do, the pension reform, and you did it right, and you started to have people believe that you’re really going to dig out of this. I don’t know. I think all of those are important. Look, he’s already whittled down his list to these five. I think all five are important. Dan Proft: But he’s not going to get all five. Realistically, he’s not going to get all five. If you were the governor and you were willing, as it seems like Governor Rauner is, to say, “I will broaden the sales tax to include services” – so that’s a revenue play – “And in exchange I want at minimum this thing, or these things: pension reforms”. What would your demand be of Madigan and Cullerton, the democrat legislative leaders? Jeanne Ives: Workers comp reform, but real workers comp reform, just for example, not for profit. They serve the disability. How does a broken ankle turn into a $600,000 worker comp plan? Dan Proft: I don’t know, how does it? Jeanne Ives: It happened. Dan Proft: It happened where? Jeanne Ives: I won’t give the details. We’ll be putting that out more, but I want to get more details and more follow-up, but that’s a real true story. Dan Proft: For a non-profit social service provider. Jeanne Ives: For a non-profit social service provider. Dan Proft: And so, what is it about the system that allows for something like that to happen? Jeanne Ives: You’ve got multiple lawyers involved in these workers comp cases; you’ve got a worker comp system where it doesn’t have to be 50% the cause of the employer or the workplace. It didn’t have to happen there. It just had to be a participating factor. So you’ve got really easy ways to get worker comp through, or worker comp injury compensated. Dan Proft: The democrats say we passed workers’ comp a couple of years ago and it’s working. What about that is untrue? Jeanne Ives: And then they want to tell you it’s because those evil insurance companies that are holding all of the savings and they’re not passing them onto the actual employers. And that’s not true; we have over 300 insurers in the state of Illinois. They’re not all in collusion here and rate fixing. They’re not doing that. Dan Proft: But for those who are not familiar with the workers’ comp history, this is a phrase that’s thrown around. What does that mean? What’s the problem with the workers’ comp system? Is it how injuries are determined? Is it employer responsibility for injuries that didn’t occur on the job? What is it about it that makes Illinois different than its surrounding states. Jeanne Ives: So causation is one of the main things, and that is that we have a standard where if the injury occurred on the job and the job was part of the causing injury, just a part of it, any percentage, 1%, doesn’t matter, then they can get a worker comp claim. Dan Proft: So, for example, what you’re suggesting to me, just to make a hypothetical, to make this concrete, I’m a week-end Warrior, I play in the basketball league on Sunday nights; I twist my ankle playing basketball on Sunday nights, I go to my job on Monday morning, I fall down and I say, “I twisted my ankle lifting this box, or whatever, on the warehouse floor”. Now that’s a worker comp claim where the employer’s responsible for 100% of the… Jeanne Ives: That’s correct. Dan Proft: And so this is part of the problem. This is what drives rates higher than in Indiana or Wisconsin or Missouri or Iowa or anywhere else. Jeanne Ives: So we’re down 10,000 manufacturing jobs in the state of Illinois in the first 9 months of the year already, and you can cite case after case where they moved specifically form workers’ comp cost. And they’ve moved across line to Indiana, where it’s sometimes 4 or 5 times cheaper for the same type of job for workers’ compensation. This is not small manufacturers. People are saving millions of dollars a year on worker comp alone. Dan Proft: All these issues. Jeanne Ives: They’re all big issues. Dan Proft: They’re all big issues; we have all these big problems. The good news is they’re all manmade problems. We did this to ourselves. But they seem to be very difficult to drive to some kind of substantial and long term improvement of the situation, so K-12 education, how we treat the disabled in terms of social service providers and the costs that they encumber and the state support for social service providers, which is not particularly strong. Jeanne Ives: No, it’s not. Dan Proft: Tax policy, all of these other related issues that drive quality of life, that drive business climate, what is the short term/medium term/long term prognosis for Illinois, in your estimation? Jeanne Ives: We have so many natural advantages; our transportation network, you can’t necessarily rebuild that; even in a couple decades, you just can’t; resituate O’Hare Airport, or our miles and miles of track and our freight. We’ve got more freight that comes here; we’re the second busiest rail hub in the United States, every day. You can’t rebuild some of our natural advantages. You can’t do that. I think we continue to decline and we lose the good middle income jobs. The manufacturers will move still out of the state, and with them, the people that need a job. I think that’s going to continue to happen until… Dan Proft: So they’ll continue hollowing out of Illinois? Jeanne Ives: Yeah, absolutely. Dan Proft: But we see press releases about corporate titans moving their headquarters and some jobs to downtown Chicago. We saw, just recently, ConAgra, they’re going to move from Omaha to Chicago. Are those indications that we’re starting to rebound, or is that so much kind of papering over this howling out you’re describing? Jeanne Ives: A lot of those jobs, those sea-suit sorted jobs, tech jobs, fine. The young people, they do want to be in Chicago. They like the night life, it’s a very robust downtown area. Don’t look underneath the planters too far, but it’s pretty robust fun place to be for that age group, but if you have a family, you’re moving out of the suburbs, Chicago’s not going to really benefit from that. And those jobs are not your middle income jobs that you need to sustain a robust economy. They’re not your manufacturing jobs, for the most part, they’re very few and far between, and they don’t need as many as those jobs, so what can I say? We have to bring back manufacturing, we have to do it. We have great energy resources here. Dan Proft: What do we have to do to make the Republican Party – I understand, again, this celebratory climate within the Republican Party, because we elected a republican governor for the first time in nearly decades – but what do we have to do to reinfuse the Republican Party with more meaning to win state legislative races that we’ve been losing, districts that Governor Rauner won in his gubernatorial election, but that we lost at the legislative level, and frankly, it kind of handcuffs Governor Rauner, preventing him from doing some of the things at the state level that Governor Walker did in Wisconsin, or Mitch Daniels and now Mike Pence did in Indiana? What is it the Republican Party is not doing politically, communication-wise, policy-wise, the fights they’re taking up or not taking up? What is it that we should understand about where the Republican Party is versus where it should be, so that at some point we can get on the path to being a majority party and give Governor Rauner some reinforcements for some of these issues? Jeanne Ives: I think people are afraid to make the arguments. They’re afraid to be challenged, and then they may not even know. Some of our candidates, some of our incumbents, they don’t want to talk about collective bargaining if they’re in a downstate republican district, necessarily, because they have prisons that are unionized. The school districts are the largest employer, yet the normal taxpayer understands how much these… you can’t be afraid of the argument, you have to put it out there. You have to tell these people, “We have to have collective bargaining reform, because your school boards can’t afford to provide the education, given these rules that they’re forced to work with”. That’s why the property tax freeze is such a difficult issue; because the democrats have been passing the fake property tax freeze bills without the collective bargaining reforms. You can’t tie the hands of those local boards when they’re forced in the contracts that they can’t afford. So you have to have one with the other, which is what Rauner is rightly doing. He’s combining the two together. But people are afraid of the argument. Maybe they don’t know the facts behind it, but I think also they don’t want to challenge their neighbors. Here we have to have an honest conversation about where we’re going as a state, because we’re going nowhere right now. Dan Proft: Has the climate in the Republican Caucus and the General Assembly changed at all as we’re all watching the presidential race and we see 3 people who’ve never held office before as the leading 3 candidates representing the majority of the Republican primary electorate vote currently in the presidential race? Has that said, “Gosh, it seems like my party is sending its elected officials a message, and maybe it’s a message I should get hipped to?” Jeanne Ives: No, they’re not hipped to that message. They’re listening to the people that e-mail them every day, that are providers of states services. And they’re saying, “We need our money, we need money, we’re going to shut our doors; my medicate reimbursement rates are too low”. Or you can’t change our school funding formula, or you can’t freeze my property taxes, or anything. They’re listening to them; because they’re the interest groups. Dan Proft: These are the people who e-mail them and say that you cannot freeze my property taxes. I want to pay higher property taxes! Jeanne Ives: Well, no, these are not the people that are doing it. These are the schools that are doing it. Dan Proft: The organized advocacy groups. Jeanne Ives: Absolutely. Dan Proft: So we have this classic problem of concentrated benefits and diffuse costs? Jeanne Ives: Yes. Dan Proft: And so, what is your feeling about continuing to serve the General Assembly? You’re a West Point grad, your husband’s a West Point grad, as I mentioned at the outset. You could do a lot of different things, being a member of the General Assembly. It may not be the most that you can accomplish in life. I suspect it’s probably not. So what’s your sense of optimism about the future and your continued service here? Or are you going to be kind of another casualty of a bad public policy and find yourself visiting your children at colleges outside of Illinois and living outside of Illinois in the not too distant future? Jeanne Ives: Well, I certainly like my home town. I like Wheaton a lot. It’s a great place to raise kids, I’ve got wonderful friends, great relationships, fabulous community. And so, I don’t want to leave Illinois, we’re not certainly planning on leaving Illinois. But it is very frustrating. I feel like, you know what, I’m not afraid to say what needs to be said down there, that’s why I think there’s still some usefulness to that. At some point you’re called upon to be a witness to the truth. And I feel like I’m called upon to be a witness to the truth, as to what’s going on, what are the facts. A witness to the truth with my son’s story, and I feel that as long as I’m useful in that way, where I feel like I am maybe encouraging new members to speak up, because there’s definitely, “Oh, you’re new, be careful how you vote on this issue, don’t speak up on that issue, careful what you say in committee”. No. You need to represent your people, and I think people want somebody who says what needs to be said. And I’ve heard it from a number of people, and for those people I can’t quit. I won’t quit until I decide that I want to do it. But I enjoy making an argument. I enjoy actually representing all sorts of interests, whether you're a public school – which I actually have your best interest at heart, because I’m trying to do the right thing for you as well – whether you’re a private school parent. Whether you’re a small business or whether you’re a big business, I want a leveled playing field. And I like doing the research, and I’m more about policy than politics, which is why I’m not in leadership, obviously; because I won’t do that. Dan Proft: Someday that may change. Witness to the truth, State Representative Jeanne Ives, thank you so much for joining us on this edition of Against the Current!