One down, 43 to go

BY HIS own admission Governor Bruce Rauner has not ticked off many of the 44 points on the “turnaround agenda” that four years ago the voters of Illinois, in their wisdom, elected him to pursue. If he were to give himself a grade for his first term in office, it would be “incomplete”, says the governor, sitting at a desk at his campaign headquarters that are adorned with pictures of Ronald Reagan and Abraham Lincoln. Running in a state that Hillary Clinton won by a million votes, he may be the most vulnerable Republican governor up for election this year. He squeaked through the Republican primary against a little-known state legislator and he will be the underdog in November, when he will face J.B. Pritzker, a billionaire businessman who comfortably won the Democratic primary. What went wrong for the successful private-equity investor, who ran for the first time for office in 2014 and managed to win the gubernatorial election by four percentage points in a Democratic state?

Governing Illinois is hard. Four of Mr Rauner’s seven predecessors went to jail for corruption. Democrats have a supermajority in the statehouse, limiting what any Republican governor can do. Yet plenty of Governor Rauner’s problems have been of his own making.

On taking office, argues Gabriel Petek of S&P Global, a credit-rating agency, the governor should have followed the example of Governor Jerry Brown in California. The recession, which both California and Illinois entered with budget deficits, took a disproportionate toll on the two states’ finances. But when Mr Brown took over as the Democratic governor of California in 2011, he put contentious reforms aside and focused on stabilising the Golden State’s finances. Only once the budget had been repaired did he pursue his projects.

Mr Rauner, by contrast, followed the mantra of Chicago’s mayor, Rahm Emanuel: never let a good crisis go to waste. When his first budget was before the statehouse, in 2015, Mr Rauner insisted that state representatives also pass a list of pro-business, anti-union measures, which included curbing the cost of workers’ compensation for businesses, an insurance policy against workplace injury, changes to tort law and restrictions on the collective-bargaining rights of public-sector employees.

Stalemate ensued, predictably enough. Illinois’s financial health went from poor to catastrophic. With no budget passed, around 90% of state spending had to be disbursed through a patchwork of state laws and court orders. The state’s backlog of unpaid bills ballooned last year to more than $16bn and the deficit depleted budget reserves. Moody’s, another credit-rating agency, calculated that Illinois’s pension debt had grown to $250bn, far more than the $130bn the state said it owed.

Lawmakers proposed increasing income taxes from 3.75% to 4.95% and corporate taxes from 5.25% to 7%. Mr Rauner vetoed that. The legislature overrode his veto in July 2017. Another year without a budget would have made Mr Rauner’s defeat in November a virtual certainty, so in February this year the governor proposed a budget for the current fiscal year that includes the money generated by the tax hikes he vetoed and shifts a portion of the cost of pension contributions to school districts and local governments. (Governor Brown did something similar in California during his first year in office.) In June Mr Rauner approved a full budget for the first time, signing a $38.5bn spending plan. He did not tie the budget approval to his planned reforms and only requested that the budget would not include any more new taxes.

Having successfully infuriated Democrats, Mr Rauner has also annoyed plenty of Republicans. After signalling that he would veto HB 40, a bill that expanded the access to abortion for recipients of Medicaid, the federal and state health-insurance programme for the poor, he signed the bill. Giving public money to abortions was a principled but politically dumb decision, says a former member of Mr Rauner’s staff. Cardinal Blase Cupich, the popular archbishop of Chicago, accused the governor of breaking his word. “I am trying to stay away from social issues that divide us,” says a chastened Mr Rauner, explaining that he signed HB 40 because he believes in giving poor women the same access to abortions wealthy women have.

Republicans in Illinois are unlikely to be won back by the governor’s equivocal support for President Donald Trump. Mr Rauner is careful not to criticise the president, whom he did not endorse (he also skipped the Republican convention in 2016). Yet he is alarmed by Mr Trump’s imposition of tariffs that are hurting Illinois farmers and manufacturers such as Caterpillar, a maker of heavy machinery, and John Deere, a maker of agricultural equipment. “No one wins in a trade war,” says Mr Rauner. Nor does he see eye to eye with the president on immigration. Last year he signed the TRUST act, which bars co-operation between Illinois’s police and immigration officials unless a federal judge issues an arrest warrant. Illinois has an estimated 511,000 undocumented immigrants, 183,000 of whom live in Chicago.

The Governor Rauner running for re-election sounds very different from the political novice of 2014, who proclaimed that he would shake up Springfield. The policies to fix Illinois are not partisan, he says, citing Democrats’ support of the reform of workers’ compensation in Massachusetts and former President Barack Obama’s support for redistricting and term limits, two big items on his reform agenda. Mr Rauner says he is keen to be bipartisan. Yet the moment for that may already have passed.