Rauner will need to be a miracle worker to make financial plan work

Written By By Mark Brown Posted: 07/19/2014, 08:29pm

Republican candidate for governor Bruce Rauner has a scary talent for telling people what they want to hear, but what’s most frightening is that voters will keep believing him.

Rauner finally offered some specifics this week on how he plans to pull Illinois out of its financial problems, and I don’t doubt that his blatant pandering was well received by many.

In addition to rolling back the state’s income tax increase, Rauner now says he will freeze property taxes, too, while still delivering more money to schools—which would be a mean trick even for the great Bruce Almighty.

Some would go so far as to call it a mathematical impossibility, but they must be unfamiliar with his miracle of the jobs and fishes.

If people are determined to give Pat Quinn the boot to send a message to Illinois Democrats, there’s not much I can say, but please don’t fall for this illusion that the rich man has the secret pain-free formula to save us all.

Setting aside for a moment the reality that under his own proposal Rauner would actually have to increase, yes INCREASE, income taxes before he could cut them as much as he claims under his phaseout plan, the promise I found the most stunning was the property tax freeze.

Where did that come from?

If he’d brought it up during the Republican primary season, at least we’d have had the benefit of some of the other GOP candidates calling him out for irresponsible posturing.

In fact, I’m unaware of any major Republican in Illinois having suggested such a thing recently, especially not the legislative leaders who were quick to publicly endorse his overall plan.

Nobody likes to pay property taxes. Nobody likes higher property taxes. But property taxes are the primary method by which we fund our schools in Illinois.

If you reduce the state income tax while freezing the local property tax, the effect is to put a chokehold on the public school system in your community.

That’s why there had been a push for many years to increase the state income tax: to get more money to schools and in the process take pressure off property taxes.

Unfortunately, because of the state’s financial mismanagement (feel free to blame the Democrats although Republicans played a role, too) and the recession, we dug ourselves such a deep hole that too little of the increased revenue has made it to the schools.

But make no mistake: if the $4 billion from the income tax increase goes away next year as scheduled, that creates a real hole in the state budget, and something’s gotta give.

The only way I can imagine it might be possible to take in that much less revenue and still give more money to education is to make truly radical cuts somewhere else such as social services. I’m talking elimination of major functions. And Rauner hasn’t proposed any radical cuts or even admitted that would be necessary.

Remember that Republicans have maintained all along that extending at current levels the “temporary” 2011 income tax increase due to expire in January would actually amount to another tax increase, and I think that’s a fair argument because it requires another legislative vote, even though the tax rate would actually remain the same.

With Rauner leading the charge, however, Republicans forced Democrats to back down from extending the tax, and it will expire on schedule January 1–reverting from 5 percent to 3.75 percent.

Given the political realities, that’s not going to change, even if Quinn is re-elected, although he undoubtedly would come back in the Legislature’s lame-duck session in January and try again, at which point it really would be another tax increase.

For Rauner to phase out the tax increase completely over four years, taking the tax rate for individuals from 5 percent all the way back to 3 percent as it was prior to 2011 (and losing another $3 billion in revenue in the process), he also would necessarily need to start by passing an income tax increase.

Although he can’t bring himself to say the words, that’s an indirect admission by Rauner that he’d need the revenue from the income tax to keep the government running while waiting for his job growth miracle to take effect.

In a nod to the fact government needs money to operate, Rauner proposes to begin charging sales tax on some services, which is a decent enough idea that has been kicking around for years but would only generate $600 million a year under his formulation.

Republicans have never wanted anything to do with taxing services, which is why Rauner didn’t propose the idea during the primary season, when it might have prevented him from sneaking through to the general election.

Now that Rauner is starting to open up, maybe people will start questioning what he has to say.

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