Speaker of the House Michael Madigan defeated Gov. Bruce Rauner after the Illinois House voted to override the governor’s veto to finally give the state a $36 billion budget after two years of no budget which has nearly bankrupted universities as well as the state.
Rauner the Republican basically held the people and the state hostage in order to get his reform package which would include term limits (Madigan has been a state rep for over 30 years), pension reform (cut pensions), property tax relief and other anti-union measures passed. If it meant throwing people out of work, closing schools and shutting social service agencies, so be it.
But this time, 10 Republicans crossed over and decided to vote with Madigan and the Democrats to override Rauner’s veto and give Illinois a budget. The final budget will increase the state’s personal income tax (3.75 percent to 4.95 percent) to generate about $4.3 billion and corporate income tax rate (5.2 percent to 7 percent) for about $460 million.
While Rauner tells the media about the horrible tax hikes, he agreed with Madigan earlier for these tax increases, the Sun-Times reported. The Republicans who voted against him said their constituents could no longer take being held hostage by a multi-millionaire hell bent on destroying the state’s finances in order to destroy the working middle class income so that businesses will invest more. Rauner had said during his election campaign that he was against raising the minimum wage.
The Illinois Senate had quickly voted to override Rauner’s vetoes on July 4th Independence Day.
The media has been focused on Moody’s Investor’s Services threatening to downgrade the state’s bond rating to junk. They are still threatening to downgrade because they want, like Rauner, “pension reform.”
But Moody’s has its own problems. The credit rating agency agreed earlier this year to pay nearly $864 million to settle with US federal and state authorities over its ratings of risky mortgage securities in the run up to the 2008 financial crisis. The US Justice Dept. said Moody’s contributed to the worst financial crisis since the Great Depression.
“Moody’s failed to adhere to its own credit-rating standards and fell short on its pledge of transparency in the run-up to the ‘great recession’,” principal deputy associate attorney general Bill Baer said in the statement.
And this is the agency that is supposed to grade whether or not a loan to our state is risky?
The media is reporting that the new state spending plan will finally send money to social service agencies, public universities and infrastructure projects, but there are still missing holes to fill, including funding for education, which will be addressed in a separate revenue bill.
Should Rauner veto a separate school-funding bill, the Senate would have to return to Springfield this summer for an override, followed by the House, the Sun-Times reported.
Without a full-year budget for the past two years, Illinois continued to run up deficits, leaving it with dwindling reserves, a record pile of unpaid bills and increasing obligations to its underfunded employee pension system.
By Jim Vail