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Rauner urges restraint on minimum wage — City Council ignores him

SPRINGFIELD — Gov.-elect Bruce Rauner criticized Democrats Tuesday for creating what he termed a “phony” and “fundamentally wrong” state spending plan he said would create budget deficits “far worse” than what’s been discussed — and urged Mayor Rahm Emanuel to hold off on his effort to raise the minimum wage in Chicago.

But the Chicago City Council took action anyway, voting 44-5 to raise the minimum wage within city limits from $8.25 an hour to $13 an hour by 2019. In his comments beforehand to reporters at the Capitol, Rauner refused to go into detail about how city government’s minimum-wage debate — as well as a lame-duck legislative proposal to raise the minimum wage statewide — would affect his plans to improve the state’s economy.

Emanuel moved up his plans for the minimum-wage vote out of concern the Legislature might craft a law that would pre-empt local governments’ ability to set the minimum wage within their borders. State Sen. Kimberly Lightford, D-Maywood, who has introduced legislation to hike the minimum wage statewide to $11 an hour by 2017, has inserted no such language in her bill, but there have rumblings about the topic.

Asked about the pre-emption issue, Rauner replied, “I can’t really comment on that issue. It’s complex. There’s different sides to that point. I wouldn’t address that right now. I recommend we do this after our administration comes into office. We have the new General Assembly. And then let’s really reform Illinois.”

Asked specifically about Emanuel’s minimum-wage ploy in Chicago, Rauner urged restraint.

“My recommendation to the mayor is he keeps in mind competitiveness for the city of Chicago,” Rauner said. “We do not want to increase unemployment in the city of Chicago and end up hurting many of the very families that we all want to help. I would encourage Mayor Emanuel to think about the minimum wage strategically in the same context that I’ve recommended for years, and that is: Let’s do it in the context of pro-growth reforms.

“Let’s help reduce the regulatory burden on businesses in Chicago. Let’s do workers’ comp reform, tort reform and a tax reduction on businesses in Chicago and raise the minimum wage as part of that.”

After the City Council vote, Rauner spokesman Mike Schrimpf said that the Republican governor-elect would have no additional comments on the issue.

Addressing reporters on the first of three legislative session days this week, Rauner said he plans to continue to meet with lawmakers on both sides of the aisle on Tuesday and Wednesday to discuss the state’s long-term fiscal picture. He plans to fly to Washington Thursday to meet with leaders there. On Friday, he will meet with President Barack Obama and five other governors elect, according to a report from Chicago Sun-Times’ Washington Bureau Chief Lynn Sweet.

Rauner teed off on Gov. Pat Quinn and the Democrat-controlled House and Senate, saying his transition team has discovered more than $1.4 billion in additional spending in the 2014-15 budget. Rauner, who is expected to outline his 2015-16 spending plan in February, said “accounting gimmicks” disguised those expenditures, including $650 million in “interfund borrowing counted as revenue.”

Quinn “used the budget to keep spending high,” Rauner said. “It will come home to roost in the 2016 budget.

“Every time we look under the hood,” he said later on, the problems “are more significant.”

A top Quinn aide fired back at Rauner.

“Gov. Quinn proposed a budget in March that all three bond rating agencies praised as a good way for the state to move forward, pay its bills and meet its obligations,” said Abdon Pallasch, the governor’s assistant budget director. “The General Assembly instead passed a budget that the governor said at the time was ‘incomplete.’ He has also made clear that it is important for the new administration to work with the legislature on the budget for this year and future years.”

Despite his assertion that state government’s finances are out-of-whack, Rauner continued to seem content to let the state’s income tax-rate drop as planned on Jan. 1 from 5 percent to 3.75 percent. “Our problems have not been created by the tax hike expiring,” he said.

Rauner wouldn’t discuss potential solutions to the state’s fiscal mess, saying, “Today, we’re focused on communicating with the voters.”

Contributing: Tina Sfondeles