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What's on Tap for Illinois in 2012?

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    NEWSLETTERS

    Illinois eeked out of 2011 barely better than when it started. Will 2012 be any different? Doubtful.

    Legislators ended the year with a last-ditch attempt to keep a handful of powerful businesses in Illinois (Sears and CME) but punted on a number of important issues.

    But those issues haven't gone away. Pension reform, a balanced budget and payments for dozens of overdue bills will be top of mind in the new year.

    Despite needed reform, it's unlikely the legislature will coalese in 2012 to fix the state's budget mess and other pressing problems.

    According to an AP report, optimisim isn't high:

    Gov. Pat Quinn, in an interview with The Associated Press, said reaching an agreement to control government pension costs will be a major focus in 2012. But his top priority is job creation — by increasing the state's exports, helping returning veterans find work and emphasizing workforce training at high schools and community colleges.

    "We can't have folks dropping out. We can't have folks who are laid off giving up," Quinn said.

    That should be welcome news to Illinois business leaders. They won't be so thrilled with the Democratic governor's goal of paying for those initiatives by ending various corporate tax breaks, an idea he floated briefly in November but shelved when lawmakers balked.

    Quinn and the Legislature's Democratic majority — sometimes joined by Republicans and sometimes on their own — have tried to address some of the state's most stubborn problems over the past year or two.

    They raised income taxes and cut spending to help balance the budget. State government is still in a deep hole, but at least it's not digging deeper.

    State officials reduced retirement benefits for new government employees, but not current employees, to begin reining in long-term pension costs. Quinn also canceled raises guaranteed in state contracts and tried unsuccessfully to break a no-layoff promise.

    Officials lowered the costs of unemployment insurance and workers' compensation for Illinois businesses and, in response to complaints about higher taxes, approved a variety of tax credits. They approved a major public works program to create jobs while improving Illinois infrastructure and also tried to make Chicago's McCormick Place more affordable to major conventions.

    Whitley, from the Chamber of Commerce, called such steps positive but "incremental." Making Illinois an attractive place for business, he said, will require a truly sound state budget, further reductions in pension costs, more cuts in workers' compensation and more.

    The trick will be finding any agreement on where Illinois should go in a year when lawmakers face the uncertainty of running in districts that were redrawn after the 2010 census. Change tends to make lawmakers cautious about any votes that could be used against them in a primary challenge or in the fall elections. Compromise can anger people who vote based on ideology.

    Springfield is likely to be quiet until after the March 20 primary, and political concerns could harden differences all year long.

    "Especially during election season, we'll have negative ads and finger-pointing," said Glenn "Max" McGee, president of the Illinois Math and Science Academy and former state education superintendent.

    Take taxes, for instance.

    House Minority Leader Tom Cross of Oswego, along with many of his fellow Republicans, wants to roll back the increase in corporate income taxes that Democrats approved a year ago. They blame the tax, and its Democratic supporters, for driving up the unemployment rate. Whether they're right or wrong, the proposal to resume a year-old fight and potentially blow a $900 million hole in the budget shows how far apart the two parties are.

    Now imagine the two sides trying to negotiate the issue of reducing retirement benefits for employees, a move that many Democrats believe is unconstitutional and which would be bitterly opposed by unions.

    "None of these guys are going to get into a real, meaningful discussion of pensions this year with elections coming up. They're not," said Peoria Mayor Jim Ardis, a Republican.

    Next year, the state is supposed to come up with $6.9 billion for pensions, up from $5.7 billion this year, according to the Civic Federation. Without a change, either in the benefits promised or the state's timetable for providing the money, the cost will continue to leap from year to year, leaving little money for other government services.

    Quinn said the problem can be solved, despite the fierce differences of opinion on cutting benefits to people already enrolled in government retirement systems. He said his administration will bring interest groups and lawmakers together to hash out a plan.

    Despite Quinn's optimism, others fear Illinois will mostly spin its wheels in 2012 instead of moving forward. Partisan differences, a weak economy and a tight budget don't exactly encourage movement, they say.

    Do you expect anything but gridlock from the Illinois legislature?