Wednesday, November 5, 2014

What Mr. Rauner should have said to Mr. Madigan last night and other unsolicited advice to the Governor-elect

We have about 24 to 48 hours to digest the results of last night's election results before the mayoral race swings into high gear....

Photo of Mr. Rauner voting yesterday,
taken from the Glenview News website.
Bruce Rauner's own campaign workers booed during his victory speech last night when he mentioned that he had called House Speaker Michael J. Madigan and Senate President John Cullerton. The TV Talking Heads were quick to praise Mr. Rauner's gesture, unpopular as it may have been in the hotel ballroom, pointing out that Mr. Rauner, who had until that moment put Messrs. Madigan and Cullerton on a par with Beelzebub in all of his public pronouncements, will need their cooperation if he is to have any chance to accomplish anything in his gubernatorial term.

But the Talking Heads didn't speculate, at least on the channel I watched, about what Mr. Rauner may have said.

Don't you wonder?

Here's the gist of what I imagine Mr. Rauner might have said: Since I know you are bound and determined to have the General Assembly make the "temporary" 5% income tax rate permanent, could you please get this done before I'm sworn in? Yes, I know Mr. Rauner expended millions on commercials prophesying that Gov. Quinn would do just this were he to be re-elected. And Mr. Rauner swore he'd insist on the rollback -- but that was never realistic. He simply does not have the votes in the legislature to accomplish this. Messrs. Madigan and Cullerton could wait until the new year to make the 5% tax rate permanent, forcing new-Gov. Rauner to veto the plan -- he absolutely would have to -- but a veto override, though it would render Rauner an irrelevancy at the outset of his term, may not be so sure a thing, even in a supposedly veto-proof General Assembly. Legislators who barely survived tight reelection races may be understandably skittish. Were the veto of the 5% income tax rate to somehow succeed, the plutocrats who run the credit rating agencies, Mr. Rauner's natural allies, would have no choice but to further downgrade the state's already terrible bond ratings. On the other hand, if a lame duck General Assembly makes the tax rate no-longer-temporary, Mr. Rauner can fulminate to his heart's extent from the sidelines, but without necessarily incurring potentially fatal damage to his credibility.

But that's just my imagination. Mr. Rauner may not have asked. But Mr. Rauner has stated ambitions for school funding, for property tax freezes, and other things that will cost money. Putting the income tax rate back to 3%, as much as he says he wants to, would presumably deprive Mr. Rauner of the opportunity to do much of anything except cut and prune spending and services. As an experienced corporate takeover specialist, Mr. Rauner may feel he knows all there is to know about cutting and pruning. But he may find that the lessons of the private sector do not readily translate to the public sphere.

If Mr. Rauner's budget plans remain somewhat nebulous, Mr. Rauner nevertheless packs for Springfield with two fully-formed ideas, both of them stinkers.

Even last night, Mr. Rauner was plumping for his term limits plan. Actually, we have a perfectly good term limits plan in place in this country already. It's called an election. Elections don't work very well as a term limits plan in Illinois most of the time -- but the problem here is not with elections per se, the problem we have is that Speaker Madigan is such a gifted map-maker. He has redrawn legislative districts in such a way as to prevent meaningful election contests just about everywhere, maximizing the strength of the State's Democratic voters, minimizing the impact of the state's Republicans. This does not make Mr. Madigan bad or evil; he is merely taking advantage of what the current law allows him to do. Mr. Rauner's term limits plan would, if it could be enacted (which it can't), force Mr. Madigan to give up the post of House Speaker. But it would not take the map-drawing pen from Mr. Madigan's hand. A truly non-partisan map drawing commission, on the other hand, just might succeed. The recent attempt to put a constitutional amendment allowing just such a commission failed in court, but the court may have provided a road map showing how the defects in the proposal can be cured.

The other truly bad idea Mr. Rauner floats is his service tax proposal. Basically, he would extend the sales tax on tangible goods to intangible services... like attorney's fees or hospital bills. Maybe some of the big law firms could absorb such a tax -- it might require only a software tweak -- assuming that well-heeled corporate clients are still willing to pay whatever Big Law requires, but a service tax would be a disaster for small service businesses generally (and small law firms in particular). Good Lord, we have enough trouble getting clients to pay bills now -- and Mr. Rauner would have us try and collect an extra 5 or 6 or 9% for the benefit of the State? Impossible.

And, of course, a service tax, like a sales tax, is just about as regressive a tax as one can imagine. That means it impacts poor people far more harshly than rich folks. If Mr. Rauner wishes to buy a new Timex to replace the one he wore out in his commercials, the sales tax on that item is a negligible portion of his vast income. But the poor person who buys the same watch pays a far greater share of his income as sales tax even though he pays the same sales tax as does Mr. Rauner.

Please, Mr. Rauner, drop this talk of term limits and service taxes.

No comments: