Illinois, the famed Land of Lincoln, known for its glistening Chicago skyline and endless fields of corn, is in a lot of trouble. The Great Recession was a black-eye to the economy, and the recovery hasn’t been as strong as people had hoped. Taxes are sky high, which has sparked many companies to leave for greener pastures. The state’s decline is especially evident when you look at the raw numbers. The population is continually shrinking as people migrate to places with more jobs, a smaller tax burden, and a lower cost of living. The state of Illinois is a train-wreck. While economic trends have not been favorable, many blame politicians and unions for its downfall.
Illinois’ political establishment never got the memo on the importance of good governance. State lawmakers have used every accounting trick in the book just to make the budget look good each year, in effect hiding structurally unsound finances. Long-used fiscal schemes have included unsustainable borrowing, neglecting infrastructure, and not calculating the cost of new legislation.
For years, politicians mortgaged their future to assure their next electoral victory at an alarmingly steep price. Imagine living in a state where there’s a 100 billion dollar plus hole, from IOUs that have been promised to public sector employees’ pensions. This dark cloud over Illinois’ financial future has been damning. In fact, too many years of a sketchy budget have led the state to a credit rating that’s steadily fallen to a couple of notches above junk status.
Eventually, the day came when the well-heeled business elite in Chicago grew tired of watching their state descend into a profligate banana republic controlled by powerful union interests. They drafted one of their own to run for governor, a fabulously wealthy private equity mogul named Bruce Rauner. A group of some the wealthiest people in the United States pumped ungodly sums of money into Illinois politics (including the future governor himself) to help turn the state around, and get Rauner elected. Since the governor’s win, he’s helped advance a policy agenda that’s rattled the Democratic establishment to its very core. The governor has been quoted as saying: “If Illinois were a corporation, it would probably need to file for bankruptcy.”
The Republican governor’s revolution to make Illinois more business-friendly and fiscally sound ignited a war that continues today. His ambitious “turnaround” agenda of reforming the pension system, weakening unions, and establishing term limits has naturally created some bitter foes in the Democratically controlled-legislature. The legislature and the governor have reached an impasse, and have yet to settle on a budget. As the one of the most populous states attempts to function without a working budget, each side is blaming one another for not willing to compromise.
The governor has only recently caved to some concessions to help the state keep its lights on. Critics say the governor, who had previously advised Democratic Chicago mayor Rahm Emmanuel, is holding the budget hostage to a list of unrealistic demands. These improbable demands include redistricting and making Illinois a right-to-work state.
As the partisan war rolls on in Illinois, Rauner and his allies continue to make it rain money to coax politicians to get on board with his “turnaround” agenda. Even if the budget crisis ends, look for Illinois to be ground-zero in the battle between those loyal to unions and those who want to make the state attractive to business once again. Only time will tell if the Governor’s revolution will succeed in Illinois and help restore fiscal discipline and economic growth to a state that desperately needs it.
Photo by Steven Vance
David is the Editor of Bold. He's especially passionate about millennial economic empowerment. A former local news reporter, David is originally from the Little Havana area in Miami, and later became a pioneer resident of the Disney-inspired town of Celebration, Florida. David holds a Master’s in Public Policy from the Harvard Kennedy School.