Pritzker promises a balanced budget in inaugural speech

Monday’s inauguration of J.B. Pritzker as the 43rd governor of Illinois comes after his entrenched predecessor, Republican Bruce Rauner, held the prairie state at an impasse, by withholding a budget, for nearly two years, as the state slid into financial disarray, to put it mildly, while the latter insisted on the Democratic legislature agreeing to a so-called “turn around agenda”, that included the weakening of public unions, and tort reform, for workmen’s compensation benefits.

In the end, the state assembly passed a budget over Rauner’s veto, and after the last glass of champagne was drunk, and the bands stopped playing, playing catch up will be the main task of the new governor.

In no small measure, it was duly noted, in Pritzker’s address: "Balancing the budget means lowering the cost of government while delivering the high quality services Illinoisans deserve," Pritzker said.

Taking both the high road, for social welfare advocates, and also to right the ship of state, he emphasized, “But be clear about this: I won’t balance the budget on the backs of the starving, the sick, and the suffering. I won’t hollow out the functions of government to achieve an ideological agenda – I won’t make government the enemy and government employees the scapegoats. Responsible fiscal management is a marriage of numbers - and values,” to great applause.

Some have suggested that if action is not taken then layoffs can be seen, of public employees, and a cap on some salaries, as well as combining benefits with cost of living raises, known as COLA’s; all  as possible solutions.

Beset by a nearly two year absence of a state budget, the state accumulated more than $14 billion dollars in unpaid bills, and sent incoming freshmen to out of state colleges, rather than face diminished resources at Illinois public universities; social service budgets were slashed, and some forced to close, or severely limit the services they provided.

The largest challenge is how to address the $250 billion of unpaid pension obligations to public employees, a great cause of concern, especially to rating agencies such as Moody’s which rated Illinois as having the largest pension debt in the nation, as a percentage of GDP and personal income.

As Bloomberg News reported in February: “$2.3 billion of deficit spending in the form of unappropriated liabilities held at state agencies as of Dec. 31; are also a significant hole.”

The road less traveled is the change in the Illinois tax system of which Pritzker ”vowed to work toward what was one of the main tentpoles of his campaign agenda: a progressive income tax system. Illinois is bound by its state constitution to a flat tax, meaning the change would need a constitutional amendment - a task more difficult than the passage and signing of legislation.”

A simple definition, provided by the IRS, is that “A progressive tax takes a larger percentage of income from high-income groups than from low-income groups and is based on the concept of ability to pay. A progressive tax system might, for example, tax low-income taxpayers at 10 percent, middle-income taxpayers at 15 percent and high-income taxpayers at 30 percent. The U.S. federal income tax is based on the progressive tax system.”

Nearby, neighbors, such as Wisconsin and Michigan, have progressive tax systems, and for the new governor, "The current tax system is simply unsustainable. Others have lied to you about that fact. I won’t," Pritzker said. "The future of Illinois depends on the passage of a fair income tax."

Others disagree, such as the Tax Foundation, which noted on its website that while “Policymakers may believe that more progressive rate structures will reduce inequality, however, there is relatively little evidence of this. In fact, states with more progressive tax codes have higher inequality, on average, than states with flat or no income taxes. Academic research by Raj Chetty and Emmanuel Saez (of Piketty and Saez fame) found that the progressivity of a state’s income tax had no significant correlation with upward mobility (though greater reliance on property taxes to fund local government apparently did increase economic mobility). Thus, policymakers may be adopting high tax rates that do real economic harm while doing little to encourage equality and upward mobility.”

"I’m not naïve about what it will take to do this. All who enter a discussion about our state’s budget and a fair tax system in good faith will be welcomed to the table. But if you lead with partisanship and scare tactics you will be met with considerable political will," Pritzker said, in recognition of the difficulties in adopting the change.

What we he do with the proceeds of a progressive system? His responses included, an update on infrastructure like roads and bridges, deliver high-speed broadband internet to everyone across the state, and more,” noted the Sun-Times.

Addressing threatened layoffs, as some companies move their headquarters out of state, and as of last September, “Multiple Illinois employers have recently issued layoff notices, warning of roughly 1,200 job cuts across the state. Those lost jobs are in addition to 1,000 jobs that will move to Boston as Deerfield-based Takeda closes its Illinois headquarters,” noted patch.com, and scheduled for this year is “Follett Higher Ed Group, Aurora: 81 workers affected, layoffs will happen between Oct. 26 and Feb. 28, 2019,” they added.

Still pending, this week, at least, is if Eddie Lampert can rescue Sears, the storied retailer, headquartered in Chicago, with an offer topping $5 billion dollars, and whose demise could send thousands more to the unemployment office.

Inaugural speeches have to include a near laundry list of favored items and, in keeping with tradition, he also vowed that one of his first acts as governor would be Illinois' joining of the U.S. Climate Alliance, to uphold "the goals and ideals of the Paris Climate Accord," the landmark international environmental protections agreement from which President Donald Trump withdrew the U.S. in 2017.”

Focusing on two of his campaign planks, in a vigorous campaign, Pritzker also highlighted his push for a $15 minimum wage and the legalization of recreational marijuana, (he says that he expects profits to be between $700 million to $1 billion a year) hallmarks of local progressives, and one part of his speech “that drew perhaps the loudest round of applause was his praise of diversity in government.”

"Thank you Illinois, for your faith in me," Pritzker closed. "I promise to live up to it every day. Together let’s go into this new century with enough faith to help each other out of our troubles, with enough foolishness to believe we can make a difference in the world, and with enough kindness to find the courage to change."