Why does the governor of Illinois say he wants jobs and prosperity and then do everything he can to prevent it?
Gov. Bruce Rauner has become the main agent of economic harm to the state. He has steered the state back toward fiscal calamity by not engaging with legislative Democrats in a spending compromise, causing a growing toll of human suffering. It’s all sending a terrible message to private enterprise. When looking to invest somewhere, companies care if a place can govern itself with policies that appear sane.
Last week, there was Rauner again, in oblivious majesty, strangely presenting a state budget for the next fiscal year when he can’t get one for the current fiscal year. He hit on the themes he’s known for — the state’s bad financial shape, the high cost of its bureaucracy and the need for reform ahead of new revenue.
But there was more vintage Rauner. Three weeks after a State of the State speech that barely acknowledged the budget crisis, he told lawmakers that the responsibility of compromise and of tough choices is on them, not him. He had not a word about the safety net of social services being shredded under his watch, or the state university system breaking under the weight of overdue state money.
Rauner is stuck on a dogma of union-busting that would sound good to his pals in private equity. To most others and to corporate executives, he sounds like a brawler you want to avoid. Companies will wonder if Rauner’s extremism means Illinois can’t right itself or be trusted to have stable tax and regulatory policies.
In my years of writing about business leaders and economic development in Chicago, I’ve never known of a company that obsessed over income tax rates (5 percent vs. 3.75 percent?) or workers’ compensation or tort reform when deciding to build here. Yes, some costs are higher here, but companies are more likely to be impressed by our real estate that’s cheaper than what’s on the East or West coasts. Illinois’ relatively low utility costs are a bonus, too. CEOs and CFOs might not care about partisan issues, but they do evaluate transportation networks, work force skills and the schools. All have suffered while Rauner risks economic ruin for a cause of his own making.
It’s just like his campaign that bad-mouthed the state in nightly commercials. By cherry-picking statistics, he made a lot of people think Illinois is a high-tax fiefdom that can’t stop bleeding jobs. In truth, taxes here are lower than they are in most of the Midwest. The difference is large enough that the nonpartisan Illinois Economic Policy Institute found that if Illinois merely mimicked the taxation policies of Wisconsin or Iowa, it would nearly erase its $9 billion annual budget deficit.
Jobs pose an inconvenient truth for Rauner. His 2014 ads ran during the fourth year of steady employment growth in Illinois. The winning streak started about the time a Democratic governor and a Democratic Legislature agreed on “temporary” tax increases to stabilize state finances and protect basic services. The streak ended in early 2015, around the time Rauner took his oath. The tax hikes ended because nobody could agree on anything else and the state suffered on the credit market. Call it coincidence or cause-and-effect, but even as the nation’s economy grew, Illinois lost nearly 3,000 jobs in Rauner’s first year. Our governor, the condemner-in-chief, has to wear the Carhartt jacket for that.
Most governors brag about their state’s business climate. Ours crisscrosses the state to denounce it before chambers of commerce. His rhetoric is more dangerous now that early-warning economic signals are flashing caution and economists are debating the odds for a U.S. recession later this year. If the economy backslides, how well can dysfunctional Illinois compete? Rauner is digging a deeper hole, for us and himself, every day.
David Roeder is a Research Fellow at Innovation Illinois, a nonpartisan organization dedicated to progressive public policies that advance equitable economic growth. He was a longtime business writer and columnist at the Chicago Sun-Times and served in the Illinois Department of Commerce and Economic Opportunity.
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