|
 Good afternoon:
President Cullerton
Speaker Madigan
Leader Radogno
Leader Durkin
Lieutenant Governor Sanguinetti
Attorney General Madigan
Secretary White
Comptroller Mendoza
Treasurer Frerichs
Members of the General Assembly
Ladies and Gentlemen:
“The occasion is piled high with difficulty, and we must rise with
the occasion… We must think anew and act anew.”
“We must think anew and act anew.”
Abraham Lincoln.
Two years ago, our first budget address began with these same words.
Though it’s taken us two years to get here, the events of recent
weeks make clear that together, Democrats and Republicans are now
thinking anew.
For the first time, legislators from both parties are standing
together to say that Illinois must have structural change to grow
our economy and create good jobs in every part of our state. That
budgets must be truly balanced for the long term – and that to
achieve balanced budgets, changes must be made to fix our broken
system.
On this, we all now agree. And that is real progress.
But it’s not enough to just think anew. We must also act anew.
For decades, our state passed unsustainable budgets, spent money we
didn’t have, borrowed and taxed to chase the spending… and drove job
creators out of state.
Citizens in every community of Illinois know that we have been on
the wrong track for years.
The numbers speak for themselves.
Since 2000, America added more than 14 million jobs – while Illinois
lost jobs. Our neighboring states of Wisconsin, Indiana, Iowa,
Kentucky and Missouri added an average of more than 100 thousand
jobs. They’ve been pulling ahead while we’ve been falling behind.
Our unbalanced budgets, our crushing tax burdens, our restrictive
regulations – they’ve held back the Illinois economy for decades.
For years now, families in Illinois have been voting with their
feet. In just six years, we’ve seen a migration loss of more than
540,000 residents. They’re leaving for jobs, higher wages and lower
costs of living.
If we had the right policies – if we’d made changes to fix our
broken system – if we had just grown our economy at the national
average, since 2000, we’d have 650,000 more jobs than we have today…
Think about that. Let me repeat that for emphasis. If Illinois were
more competitive, if we had just grown Illinois’ economy LIKE AN
AVERAGE state, today, we would have 650,000 more jobs here.
Just as important for our budget, if we had grown at the national
average since 2000, even with our actual historic spending, we would
have run budget surpluses, we would not have any unpaid bill backlog
now, and today we would have 8.5 BILLION dollars more in cash to put
into our schools and human services and to reduce our tax rates.
Think about that. We would have good jobs in every community. We
would have employers competing to hire workers. Our households would
have more income. And we could have the best funded schools in
America.
And let’s be clear, Illinois should never settle for being average.
We should be one of the ten fastest growing states in America. We
have the best people, the best location, the best agriculture, the
best transportation, the heart of America – we have every reason to
thrive.
We can do this together.
It’s why I ran for governor. To deliver a better future for our
children … To change the direction of our state… to put us back on
the right path – toward a growing economy, world class schools and
restored trust in government.
It’s why we’ve been working for two years to pass a truly balanced
budget, to create equal access to strong schools and good jobs.
For two years now, we’ve been asking the General Assembly to help us
unlock our state’s unfulfilled potential. And today, we finally all
agree that economic reforms must be part of a balanced budget
solution.
Now is the time to seize the moment – build on the progress made in
recent weeks – and right our ship of state. Together, we can make
Illinois more competitive and more compassionate. We can make the
necessary changes to fix our broken system.
Two years ago, our Administration proposed a balanced budget. It
contained more than $6 billion in cuts, spending only what the state
could afford at current revenue. But the majority in the General
Assembly simply ignored our budget proposal, didn’t discuss it,
debate it or vote on it – just passed their own $4 billion
out-of-balance budget. And so our current impasse began.
Then we offered to work with members of the General Assembly to find
common ground on a mix of cuts, revenue increases and reform. We
convened bipartisan working groups, doing our best to find a way
forward together. But the possibility of compromise fell victim to
partisan divides.
Last year, we proposed two paths to a balanced budget – two very
different financial plans under which expenditures would not exceed
available revenue. Our preferred option was once again to work
together to reach consensus on a mix of spending cuts, revenue
increases and changes to grow our economy. We offered more
compromises. We took things off the table in hopes of getting an
agreement.
Our Budget Director convened a bipartisan working group to craft a
balanced budget. Thank you to the courageous and principled members
of the General Assembly - Democrats and Republicans in both chambers
- who worked together to find a grand bargain. They nearly reached
an agreement last spring. But once again, the possibility of
compromise fell victim to partisan divides. By the end of the last
legislative session, the majority in the General Assembly couldn’t
agree on any kind of budget – balanced or not.
This isn’t about pointing fingers or assigning blame. We are where
we are. It’s not about the past; it’s about how we move forward
together. It’s not going to help us move forward if right after this
speech, Democrats run to the media claiming we’ve never proposed a
plan to balance the budget. And it’s not going to help us move
forward if Republicans run to the media to point out that the
Democratic legislature’s never passed a balanced budget.
People want to see us get something done – to get a balanced budget
to change our broken system. To grow more jobs and better support
our schools so they’re the best in America.
So today, we are here once again with our hand outstretched to the
Leaders and members of the General Assembly. Between ongoing budget
negotiations in the Senate and all of our leaders acknowledging the
need for change, there is good reason for optimism.
Now is the time to take the next step and get the job done.
Some people argue we should just cut our way out of our budget
problems. Others believe we should simply raise taxes and declare
the budget crisis solved.
But we can’t tax our way to prosperity. Nor can we just cut our way
to a better future. We must grow our way to the future we want.
Growth is the solution. Growth means jobs. Growth means expanding
revenues. Growth means the economy expands faster than government
spending. Growth means a sustainable future where job creation
surges and our schools are the envy of the world.
Some people think spending cuts are too hard, that economic changes
are too difficult. Just raise taxes and call it a day. Let’s be
clear. We cannot tax our way to a long-term balanced budget.
Illinois residents and job creators are already saddled with the
highest property taxes and the 5th highest overall tax burden in the
nation. We’ve tried raising taxes to balance the budget before,
without making structural changes to control spending and grow the
economy. It has never worked. Taxing our way to a balanced budget
would only hasten the exodus of jobs and families from Illinois – an
unacceptable option for members of both parties.
I’ve repeatedly said that I will consider revenue increases if we
stand together to make the job-creating changes we need. But
structural changes to spending are absolutely essential to balance
the budget, and to keep it balanced.
Today, over 60% of the state’s general revenues – roughly $20
billion – are locked up by statute. No Governor can effectively
reduce spending until we address automatic spending categories like
pensions, Medicaid and transfers out.
Ultimately, it’s all about jobs. Our future depends on offering
strong schools and vast job opportunities across our state. By
becoming more competitive with our neighbors. By creating good jobs
not only in Chicago, but in Rockford, Moline, Peoria, Decatur,
Galesburg, Quincy, Carbondale and every community in between. By
giving families and job creators good reason to come, and stay, in
Illinois.
If we do those things, if we grow our economy, if we become more
competitive, more attractive - Illinois will see immediate results,
and our state will be a destination for families and employers from
across the country and around the world.
Today we present you with a balanced budget that shows what is
possible if we all come together on a comprehensive approach to
state finances and job creation. Our proposal for the coming fiscal
year focuses on the future.
It shows how Illinois can be more compassionate if we become more
competitive. While proposing economic changes, it also focuses on
the fabric of our society – investing in schools, public safety,
criminal justice reform and human services.
We propose a record level of funding for our schools. We supported
our K-12 schools at an unprecedented level in the last school year,
and then we came back and did even more for this school year. Let’s
begin to implement the recommendations of the school funding reform
commission to make sure every child gets a shot at the American
dream, no matter where they live. Let’s increase our general state
aid and funding to other programs that benefit all schools.
Education is the cornerstone of our future and this investment will
pay great dividends in the long run.
We propose that for the first time since 2010, the state fully fund
regular transportation costs for schools around the state – enabling
them to get kids to and from career and technical education
programs. School districts shouldn’t have to scramble to find a way
to pay for transportation costs. Our budget ends this proration once
and for all.
Our proposal increases funding for English learners and early
childhood education. And it maximizes important federal dollars that
build technology infrastructure in our schools.
When it comes to higher education, we understand the hardship being
felt by students who rely on state assistance to go to college.
That’s why we’re proposing a 10 percent increase to MAP Grant
funding – so those students can focus on learning, and not their
next tuition bill.
Our budget prioritizes public safety and proposes funding for two
Illinois State Police cadet classes, adding new troopers to our law
enforcement ranks. Those officers will allow us to send more patrols
to the Chicago area expressways to counter the violence that has
spilled over on to the highways.
Today we are fortunate to be joined by Illinois State Police
Director Leo Schmitz, and Captain Chris Campbell and Lt. Freddie
Outlaw of the Illinois State Police Academy. Please join me in
thanking them for their great service to our state!
We recognize the growing danger of opioid abuse across our state.
And we highlight the need for a comprehensive strategy: prevention,
interdiction and treatment; education, law enforcement and human
services. State, local and federal partnerships. This is a crisis –
and we need to confront it head on before we lose more young lives.
[to top of second column] |
We look to build upon our recent
accomplishments with Criminal Justice Reform. We propose full funding for the
Kewanee and Murphysboro Correctional life skills and reentry centers so that
they can offer educational and job readiness courses to help better prepare
offenders to leave custody and find jobs, live on their own, and get a second
chance in life.
We fully fund mental health facilities in Joliet and Elgin…and provide the
necessary support for residential treatment centers in Pontiac, Logan and Dixon.
We know the challenges facing human services … that is why our proposal
increases support for Child Care and other programs that assist children, senior
citizens, and our other most vulnerable residents.
We continue to support our efforts to reduce childrens’ exposure to lead in
paint and drinking water and financially support those efforts.
We recommend full funding for home visiting and early intervention programs.
We propose a continued transformation of the Department of Children and Family
Services by hiring additional employees to work solely on child protection
investigations and compliance monitoring of programs.
And we look to strengthen services for the men and women who have put their
lives on the line for our nation by delivering start-up funding for a new
Illinois Veterans Home in Chicago.
Our transportation network is one of Illinois’ greatest assets, and it is a
primary reason why job creators choose to make our state home. This year we
propose increasing the road program at the Illinois Department of Transportation
by $200 million, so that we can continue to be a leader in moving people and
products throughout our nation and reinforce the message that Illinois is a
great place to invest and expand.
At the same time, we look to fund
long-overdue maintenance and repairs at state facilities…and invest in our
technology transformation to ensure that state government becomes more
efficient, responsive and transparent for the people we serve.
Our spending proposals are significant, but if we came together under our
proposal, if we came together on a grand bargain, we’d actually spend $3 billion
less than government is currently spending.
In order to achieve those results, we propose a number of changes inside state
government to improve services and save taxpayer money.
Pension reforms, in addition to President Cullerton’s consideration model, can
save us a billion dollars right off the bat. A new hybrid pension Tier III plan
could give new employees more options while saving the state money.
If we do nothing, we can expect our pension costs to grow by $1 billion in just
the next year. Those payments put an unsustainable strain not only on our
pension systems, but on the state’s ability to pay for our schools and other
critical services.
We must act, and time is of the essence.
We will continue to pursue improvements in our state employee contracts – to
make reasonable changes like moving state employees from a 37.5-hour to a
40-hour work week before overtime kicks in. And we’ll base employee pay on
merit, not just seniority. We have successfully negotiated contracts with
similar parameters with 20 Labor Unions in the state, and we’ll continue to seek
these common-sense changes throughout state government.
We must address the accelerating cost of state employee and retiree health
insurance.
Most Illinois families have seen their health insurance premiums skyrocket.
Business owners across the country are forced to make hard decisions to manage
soaring health costs. So imagine what Illinois families think when they hear our
state employees get “Cadillac platinum” coverage for barely more than bronze
rates.
We cannot continue to ask taxpayers to pay more to subsidize state employee
health care –when they’re seeing their own premiums go up and coverage go down.
Our state employees should have health care options just like everyone else –
and it is reasonable that they pay for those options in line with everyone else.
Bringing the state employee health insurance program more in line with the
private sector would save our state half a billion dollars.
There are other opportunities for budget savings. We need to cut the red tape in
how the state buys goods and services. It’s time to implement best practices and
take advantage of cooperative purchasing opportunities to ensure taxpayers get
the biggest bang for their buck. Procurement reform could save us hundreds of
millions next year alone.
Together, we can move forward with selling the James R. Thompson Center. The
JRTC occupies an entire city block of prime real estate in the Chicago Loop. For
years, the State has failed to properly maintain the building; and now we face
deferred maintenance costs in the hundreds of millions of dollars. Everyone
benefits from the sale. The city of Chicago stands to gain major new property
tax revenue, along with the jobs that come with a massive development. The state
could see a net gain of over $200 million from the sale, helping us close the
budget deficit in the next fiscal year.
Every day, we’re implementing efficiencies in education, criminal justice,
health and human service programs and information technology that improve
outcomes and save us money.
Those savings are significant. Those efficiencies will make a difference. But
NOTHING is more important than creating MORE JOBS IN ILLINOIS.
We’ve made our top priority clear from the beginning – driving real change to
move the needle on job creation in our state. The only way to keep budgets
balanced in the future is to ensure economic growth outpaces government spending
growth. Together, let’s look at each regulation we have, at every law we pass,
and ask ourselves a simple question: how does this impact job creators? Is the
benefit of this rule worth the cost in lost jobs? That’s the essential question
that can guide our decisions every day.
Job creators and relocation firms tell us that rooting out fraud and abuse from
the worker’s compensation system and getting highest-in-the-country property
taxes under control are two of the most important ways to make Illinois more
competitive. Very high workers’ comp insurance costs in the private sector
continue to drive businesses out of state – and in the public sector, they
contribute to higher property taxes. Changes are necessary to attract employers
and create new jobs.
And we will never stop working to get term limits and redistricting on the
ballot in Illinois – to send a message to job creators across the country that
our state is doing things differently than we have in the past.
These changes are necessary to producing long-term balanced budgets and
long-term financial stability. They are THE items that can ensure Illinois not
only survives, but thrives, for generations to come.
As we’ve said repeatedly, there is no one single bullet, no one single “must
have,” for our Administration. But for the future of our state, change must be
real, not just a newspaper headline.
Senate President Cullerton, Leader Radogno and Senate lawmakers have shown
tremendous leadership in bringing all parties together to find common ground on
a combination of spending cuts, revenue, and changes that will create jobs and
ensure long-term balanced budgets. Standing here three weeks ago, I encouraged
them to keep working, to never give up…and they have done just that.
We’ve made a point of letting the Senate move forward… trying not to disrupt
momentum. But I’d like to take a few minutes to help guide the negotiations to a
place where Democrats and Republicans can reach agreement, and I can affirm my
support for the package.
First and foremost: the final result must be a good deal for taxpayers and job
creators: a grand bargain that truly balances the budget once and for all, and
really moves the needle when it comes to job creation.
A good deal for taxpayers lays the foundation for balanced budgets for years to
come. The budget must truly balance by the end of Fiscal Year 2018 – and it must
balance in a way that doesn’t send us right back into deficit a few years from
now.
That means a hard cap on spending that forces state government to live within
its means, balance the budget and pay off the state’s debt. Spending reductions
in the budget need to be real – not smoke and mirrors. Long-term pension reform
needs to maximize savings in all pension systems.
As for revenue, we’ve always said that we’d consider revenue if it comes with
changes that create jobs and grow the economy.
The current Senate proposal calls for a permanent increase in the income tax
rate but offers only a temporary property tax freeze in exchange. That’s just
not fair to hard-working taxpayers across the state.
We need a permanent property tax freeze in Illinois, just like the one the House
passed last month. Over time, as our economy grows and revenues expand, any
increase in the income tax could be stepped down – dedicating future surpluses
to taxpayers, not more government spending.
The current Senate proposal would expand the state’s sales tax to cover everyday
services, and raise taxes on food and drugs. We’re open to a broader sales tax
base to mirror neighboring states like Wisconsin, but let’s make sure it’s best
for the people of Illinois, not for the lobbyists in Springfield. We cannot
raise taxes on people’s groceries and medicine – just as we cannot tax people’s
retirement incomes. We can find a way to balance the budget without hurting
lower-income families and fixed-income seniors.
We must all support raising the earned income tax credit to help low-income
families. And we must support making the research and development tax credit
permanent to encourage innovation and job creation.
MOST IMPORTANTLY, a good deal for taxpayers comes with economic and regulatory
changes that are significant enough for job creators to get excited about the
future of Illinois.
Term limits get job creators excited. Passing term limits is one of the most
important things we can do to send a positive recruiting message to job
creators: “it’s a new day in Illinois, we’ve turned the corner.”
Workers comp changes get job creators excited. We must get our worker’s
compensation costs in line with other states. We’re asking for a worker’s
compensation system that matches Massachusetts. Massachusetts is a blue state
with a strong middle class--and it’s growing.
Now, those parameters aren’t controversial– they’re right in line with what
Democrats and Republicans have said they agree with. And while the Senate
package is still evolving, it wouldn’t be that hard to reach a good deal for
taxpayers.
I firmly believe that we can come to agreement on these issues. And I pledge to
you that I will sign that good deal for taxpayers the minute it arrives at my
desk.
This is now a question of political will. I’m know I’m willing-- I hope you are
too.
As we discussed last month: Illinois faces incredible challenges. But those
challenges also provide unprecedented opportunity.
We are at a crossroads. If we work together and make the right decisions now,
the potential of our state is unlimited. Let’s put Illinois back on the road to
prosperity. Let’s do what we were sent here to do.
Thank you. God bless each of you, God bless our great state of Illinois and may
God continue to bless the United States of America.
[Office of Governor Bruce Rauner] |
