Wednesday, July 1, 2015

Facts about Illinois Budget Showdown

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The Illinois General Assembly failed to pass a balanced budget for the new fiscal year, which starts today. That means the state cannot spend money on any programs or services requiring an annual appropriation. There’s a lot of uncertainty about what this means, with predictions ranging from “most people won’t notice” to “Armageddon.”

Here are 10 things Illinoisans can expect as the state moves into the new fiscal year without a balanced budget:

  1. No matter what stays open and what shuts down, state lawmakers will still get paid. State lawmakers will receive their paychecks no matter what happens or how long this budget impasse lasts. That’s because in 2014, House Speaker Mike Madigan and Senate President John Cullerton worked together to introduce and pass a law ensuring legislator salaries and operating expenses would be paid even if a balanced budget was not passed on time.
  1. Without a state budget, there is the threat of a state government “shutdown.” But operations won’t halt immediately. For most state programs and services, funds must be appropriated by the state on an annual basis through a budget. Without a budget, these programs and services will not receive funds from the state. However, that doesn’t mean these programs and services will immediately cease. Most will be able to withstand missing a payment or two without too much of an issue, recognizing that the state will likely appropriate money for those programs or services eventually. And vendors that provide state services already are paid months behind schedule, so they will keep receiving checks for services provided prior to July 1.
  1. Schools will start on time. Rauner signed a bill on June 24 that ensures public schools are funded in fiscal year 2016, meaning students will be back in school on time even if the state fails to adopt a balanced budget.
  1. Pension and debt payments can still be made. Pension and debt payments are continuing appropriations and by law do not need to be appropriated on an annual basis.
  1. Essential services will continue. Services essential for the safety and welfare of the people of Illinois will continue. State police will continue working and state prisons will remain open and operational.
  1. Local-government operations will continue. Cities, towns and villages will continue to receive their share of state income, sales and motor-fuel taxes.
  1. Federal programs will continue. Programs funded or operated by the federal government will generally not be affected.
  1. State parks, museums and casinos will remain open in the short term, but could close eventually.
  1. Eventually, people who rely on state services will feel the pain. While some programs and services may be able to continue at least temporarily, the lack of state funding for some programs and services will have an effect on many Illinoisans. Funding for Medicaid, addiction services, child care services, rehab and the senior meal program funds will all cease. Providers of such services have been kept afloat by expedited payments from the state, and when such payments stop, these providers may choose to stop providing these services.
  1. Illinoisans will still have to pay taxes.


Jeffrey Schwab

Staff Attorney, Liberty Justice Center

What Scott Walker's Tenure Has Done to Wisconsin’s Workers

 

…..To what extent, then, did Walker’s crushing of the unions help Wisconsin’s “hardworking taxpayers”? The $3 billion he saved in his first term was certainly something. But that amounted to less than 1 percent of overall state and local government spending over that time period. Those savings came from the pockets of teachers and other public servants who are also taxpayers and whose compensation, by most measures, was not out of line. The law Walker signed didn’t contribute to the fiscal health of the state’s public pension fund. It provided management flexibilities that could ease school reforms down the road but that the governor himself hasn’t taken much advantage of. And, as we’ve seen, Walker could have won most or all of that $3 billion through tough negotiating without going for the jugular and virtually eliminating collective bargaining. Why, then, did he do it?

It’s tempting to portray the struggle over Wisconsin’s unions as a matter of high policy. In reality, however, it was the culmination of decades of increasingly fierce partisan wrangling that pitched the state’s Democrats, along with their union supporters, against resurgent Republicans and their allies in the business community.

In the previous 20 years, there had been other epic battles, but none was bigger than the 1998 campaign for State Senate District 27, located in a Madison suburb. The race pitched Democrat Jon Erpenbach, a former legislative aide, local radio personality, short-order cook, and truck driver, against Republican Nancy Mistele, a local business operator and prominent conservative activist. Both sides expected that the race would decide control of the Wisconsin state senate, which had been tilting back and forth and was then in Republican hands. With Republican Tommy Thompson in the middle of his 14 years as governor, the Democrats saw control of the senate as critical in regaining their power in the state—and Erpenbach’s race as critical to senate control. For the Republicans, it was their golden opportunity.

It was a big-money campaign, at least for those times and for a state legislative race. Erpenbach raised $188,000, but Mistele vastly outspent him with the $307,000 she collected. She also had big help from Wisconsin Manufacturers and Commerce (WMC), the state’s chamber of commerce, which spent an estimated $200,000 in issue ads. But the state’s major public employee union, the Wisconsin Education Association Council (WEAC), jumped on Erpenbach’s side with an estimated $362,000 of its own issue ads. Issue-ad spending swamped the candidates’ own campaigns, and, as Erpenbach later told a reporter, “The campaign was totally out of my control.” In fact, he said, he felt like a “bit player” in his own campaign.

In the following years, WEAC and the WMC became stalking horses for the Democratic and Republican establishments, and the groups fought proxy battles for the parties on the state’s biggest issues.

Erpenbach may have lost control of his campaign, but with WEAC’s money he won the race. The Democrats controlled the state senate, the seeds were planted to make issue ads an unstoppable national force, and the fight between WEAC and the WMC became a blood feud.

In the following years, WEAC and the WMC became stalking horses for the Democratic and Republican establishments, and the groups fought proxy battles for the parties on the state’s biggest issues. WEAC was the most powerful voice of public employee unions in one of the most important swing states in the country. The WMC was determined not to let them set the state’s agenda. The two groups may not have invented issue ads, but their rivalry brought them to a fierce level not previously seen in the country.

But not all unions suffered the same fate. The Wisconsin Troopers Association, for example, escaped most of the changes in bargaining power imposed on the teachers and won a 17 percent increase for its members in its bargaining with the Walker administration. The state troopers guarded the capitol during the 2011 fracas—and supported the governor in his 2010 campaign, the 2012 recall election, and his 2014 reelection battle. The governor’s spokeswoman, Laurel Patrick, denied that there was a connection. “This is ridiculous. To say there is a pattern of favoritism is inaccurate.” Some local police and fire unions also backed Walker—and they also found themselves far better off than the teachers’ union.

Sharp-elbowed politics is part of the American tradition. James Madison warned about the “mischiefs of faction,” and what has happened in the Wisconsin city that bears his name surely ranks among the most mischievous. But it’s awfully hard to argue that it represents a pathology of union power or that the unions had a privileged place at the table. They found themselves in a nasty blood feud and lost.

What do Scott Walker’s actions as governor say about how he might act as president if he were elected? Do his experiences busting the state’s government unions, and the instincts that led him to do so, make him the right person to take on the management challenges of the federal government? He argues that the union battles show he’s tough enough to lead, but there are much deeper issues at play here.

To begin with, whatever problems Washington has, they don’t have much to do with union power, for the simple reason that unions at the federal level don’t have much clout. They represent only 19 percent of all federal employees (compared with 42 percent of local government employees and 30 percent of state government employees across the nation, and 31 percent of state and local employees in Wisconsin). Federal unions have no right to bargain over wages; Congress sets federal pay through appropriations. Federal employees don’t have the right to strike, and never have. (The 1981 air traffic controllers’ strike was illegal under federal law, and Reagan actually provided a grace period to give them a chance to think twice before being dismissed.)

Today, the biggest problem with federal employees is that there’s not nearly enough of them. As the University of Pennsylvania political scientist and former George W. Bush White House aide John DiIulio has noted, the size of the federal workforce today remains about what it was in 1960. Meanwhile, the U.S. population has more than doubled, the federal budget has quadrupled in real terms, and the number of pages in the Federal Register has grown fivefold, as the below chart shows.

Federal Workforce and Spending

Yahoo