“We should have billions of dollars every year as part of our budget process … [to] maintain and expand our infrastructure,” Bruce Rauner said last week, according to the Chicago Tribune.
Rauner has been doing his best to woo the road builders all year, and he was speaking to the Illinois Farm Bureau, which has lots of members who rely on roads and bridges to get their goods to market. So I understand the practical politics of his bold promise.
But this stuff costs money. Lots and lots and lots of money. And infrastructure is only his second priority. His top priority is education funding. He wants to spend even more money on schools.
Yet, Rauner says he wants to slash the state’s income tax rate. Can he really do all that with lower revenues?
There are three ways to pay for these pie-in-the sky plans: 1) Gin up the state’s economy to North Dakota levels; 2) Stop making the full state pension payments; or 3) Increase state total taxation far above current levels.
Let’s examine all three, shall we?
1) Rauner has been saying all along that economic expansion is key to generating the revenue needed to pay for everything he wants to do. Yes, Illinois’ jobless rate is down considerably over the last year. That’s good news. But unless oil and natural gas “fracking” turns our state into another Saudi Arabia, there’s just no way Illinois can hit Rauner’s fantasy projections.
2) Resuming the state’s sad history of skipping or skimping on pension payments would likely result in a major bond rating downgrade, perhaps even to junk status. That’s really not an option. The other move would be to force local school districts to take over the state’s role of funding the teachers pension system. But Rauner has also proposed another amazing magical fantasy of capping local property taxes.
3) After assuring Republican primary voters that he’d slash taxes, the candidate now says he wants to gradually roll back the 2 percentage point, 2011 income tax hike over four years. That’s somewhere around $8 billion in lost annual revenue by his target date – about a 40 percent cut in current income tax receipts, and the personal and corporate income taxes account for a little over half of all state revenues.
Rauner’s proposed service tax would have to be ginormously bigger than the $450 million or so he’s advertised to cover a nut like that. And never mind that taxes on services will tend to drive down consumption, which reduces demand, which hurts economic growth, particularly at the middle and lower ends (see fantasy #1).
Say what you want about Gov. Pat Quinn, and I’ve said more than my share of negative things over the years, but at least he tries to live somewhere in the neighborhood of budgetary reality. In contrast, the new government spending that Bruce Rauner is proposing on the campaign trail transcends the political posturing we’ve grown accustomed to as Illinoisans.
• Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.