The partisan divide in Springfield seems wider than ever as Illinoisans brace for the start of another fiscal year without a budget. Lawmakers adjourned Wednesday without a spending plan. In this week’s Friday Forum, WNIJ’s Susan Stephens asked Rockford University Economics and Political Science Professor Bob Evans how we ended up here again.
Evans said the long-term answer to that question is hyper-partisanship, where “the two sides in a political debate seem to move further and further apart and are sort of standing on opposite sides of the Grand Canyon shouting at each other.”
Then there’s the conflict between the budget cycle and the political cycle. That’s magnified as we move into an election year.
“If you notice,” said Evans, “Democrats are maneuvering to portray Republicans disadvantageously, and the Republicans are trying to do the same thing to the Democrats … As much as they are trying to get a budget, they seem to be looking beyond the current fiscal year into the political year coming up in 2018. And when the political cycle and the fiscal cycle are out of whack, that can cause trouble.”
Evans said there is a small window when the political cycle is not so intense – a year to a year-and-a-half before an election. But lawmakers have to be quick. Illinois missed it. And now, said Evans, it seems that both sides are as far apart as they’ve ever been.
It’s not just the issues, according to Evans; it’s the approach. He says tactics and strategies separate the two parties. It comes down to how much they want to accomplish at one time.
Gov. Bruce Rauner has wrapped up what he sees as all the state’s problems into one big package. Open it up and you'll find tax reform, worker’s compensation, term limits, the education formula, and a lot of other non-budget issues.
Meanwhile, Democrats want to deal with the state’s problems incrementally, one piece at a time. They’re not buying into the governor’s “all or nothing” approach. Evans says that difference is an important part of understanding the deadlock at the capital.
Making things worse, according to Evans, “Almost nobody seems to feel a sense of crisis or emergency. It’s like we are in a slow-motion disaster. If state agencies shut their doors, if people just didn’t get the services at all, if there was some sort of visible emergency, then people might drive the legislature to do something. But what you hear is a shortfall here, this agency is laying off a few more people; it’s a slow-motion train wreck instead of a very visible disaster. That seems to reduce the sense of urgency.”
Evans sees the only thing that will make a difference is for citizens to take it into their own hands, to “vote the rascals out, vote some new rascals in.” But that hasn’t happened during this budget meltdown, and he doesn’t know why. Nor does he think that’s going to happen.
Spiraling credit rating
So how does this continuing lack of a budget affect the state’s economy and reputation? Evans points to the state’s credit rating.
After the latest failure to compromise in Springfield, S&P Global Ratings and Moody's Investors Service downgraded the state. That leaves state government debt just one step above “junk” status. And Moody’s is ready to go all the way with junk bond status, if the situation isn’t resolved by July 1.
Evans sees enormous consequences if that happens, even beyond higher interest rates when the state tries to borrow.
"More importantly,” he said, “This makes Illinois a bad place to come to do business, to raise a family, to grow a business. If you look at Illinois compared to the states around it, they have lower unemployment rates, higher growth rates, they have better rates of new business coming to the state, and retaining existing businesses. Illinois stands out like a sore thumb.
"We have a very visible comparison of what it’s like to have no budget, no promise of a budget compared to some sort of reasonable fiscal policy like the other states. So it harms the state as far as growth rates, unemployment, education, because education can’t get funded" he said. "And of all the things we need in Illinois is to improve the education system, to train workers to help get jobs into the state. It harms us in almost every way imaginable. You mention our reputation. It just looks bad, really bad.”
Backlog of bills
Illinois owes a lot of money. Agencies and service providers are owed billions, and the numbers balloon when interest is factored in. Who’s paying for it? Evans says everyone pays in the form of diminished services, and service providers find their businesses endangered while waiting for reimbursements from the state.
Evans says the focus on the crisis at hand also keeps the state from addressing other systemic problems, such as higher education costs and picking up a larger portion of public-school funding.
What’s (not) in it for me?
Evans says every Illinoisan will eventually suffer from the political standoff. He said it starts with people “not going to get some of the services from the state you would otherwise get. It means the citizens in your neighborhoods who need help from various social agencies won’t get the help they need. It means, very importantly, arrested or retarded economic development in the state."
"It will be hard to convince a business to relocate to Illinois under the current circumstances. Our unemployment rate could be lower, our growth rate could be higher, so we are paying a cost in diminished economic development," Evans said. "We’re paying a cost in terms of lower quality education, and we're paying the cost in the form of reduced or not having social services.
"It’s not like being hit with a pie in the face; it is not always a visible cost, but it’s a persistent cost. And it’s a cost that almost everyone in the state is paying," he added. "I mean, I can’t think of any group that’s benefiting from this situation.”
This week, protestors physically blocked the governor’s office to send the message that they want a budget deal, not a political standoff. Others have been practicing a quieter but far more devastating form of protest -- voting with their feet. Evans says recent census figures show people moving out of the state, especially in cities like Rockford and Chicago. “That’s really unfortunate,” he said, “because it just contracts the state, the economy, and dislocates people. I think finally the solution is to find the way to focus the attention of the governor and the legislature on addressing this problem.”
He said he'd like to think the end of the regular legislative session would have been enough pressure to cut a budget deal, when only a simple majority was needed to pass any agreement. But now it will take a three-fifths majority.
“By July 1, there will be an expiration of spending authority, so conceivably the state could shut down. That’s not going to happen," he said. “What they probably will do is fund as they did last year at this time by funding programs with what in Washington they call a continuing resolution. In other words, they’ll fund existing programs at two-thirds the current level, but not a long-term budget. But they’ll address education and health care, the really essential issues, with continuing resolutions, and we could limp into the fiscal year without a budget.”
Budget = Plan
Bob Evans says the lack of a budget is actually worse than it sounds. It means Illinois does not have a plan for its future. “How will we grow the economy?” he asked, “How will we raise taxes, if that’s necessary? How will we cut spending, if that’s necessary? A budget is a plan for managing. And if we can’t manage the state, then that’s a terrible admission on the part of Illinoisans that we can’t ‘put our house in order.' So we need a budget. Not for the magic of two columns of numbers, side by side, but we need a budget because that means that somebody has made a plan. And if we stick to that plan, then perhaps we can get out of this. But I don’t see it on the immediate horizon now.”
- Bob Evans is a regular contributor to WNIJ's "Perspectives."