Running Illinois like a banker

March 24, 2015

Dennis Kosuth, a member of National Nurses United in Chicago, reports from the state capital of Springfield, where he traveled to protest Gov. Bruce Rauner's austerity budget.

BUSES FROM across the state filled with over 1,500 protesters descended upon the Illinois capital of Springfield on March 11. Their target was Bruce Rauner, the newly elected Republican governor, and his various initiatives intended to solve the budget shortfall by slashing services for those who need them most.

Rauner's proposed budget cuts about $4 billion from the next fiscal year, which begins in July. This is in response to a current deficit of $1.6 billion and a $6 billion deficit projected for the next fiscal year. In addition, there is a $111 billion pension shortfall.

Rauner's cuts include $1.5 billion less for Medicaid, an already stretched system providing health care to the poor, and $780 million in cuts to health care for current and retired government workers. He also wants to end services to young adults by the Department of Children and Family Services, worth $167 million. Slashing programs that assist children who require early intervention, people with substance abuse issues and those in need of mental health care will subtract another $200 million from the budget.

Protesters pack the Illinois Capitol building to protest Gov. Bruce Rauner's budget cuts
Protesters pack the Illinois Capitol building to protest Gov. Bruce Rauner's budget cuts

Rauner is proposing a further $2.2 billion in cuts via reduced pension payments. The previous governor, Democrat Pat Quinn, already signed legislation cutting pension benefits for state workers. The status of this law is still a question before the Illinois Supreme Court. During Quinn's tenure, he also oversaw budgets that included hundreds of million in tax cuts to corporations like Sears and the Chicago Mercantile Exchange. One key reason Quinn failed in his re-election bid is that voters were uninspired to turn out in a race between a multimillionaire and the tax-cutter for multimillionaires.

It's no surprise that a slash-and-burn solution is coming from someone who has made his riches through 30 years of hard work in the private equity venture capital firm GTCR. Cutthroat decisions in the name of maximizing profits at any and all human costs are second nature to Bruce Rauner--and completely in line with the austerity budgets that politicians from both parties have been and are attempting to implement across the country.

WUIS reporter Rhonda Gillespie captured the mood of the protest well when she wrote:

Brittney Berry fought back tears as she handed an aide from the governor's office a stack of petitions asking that Child Care Assistance Program remain in place. The subsidized day care program, which legislators had funded for only six months of the current fiscal year, ran out of money in January, putting in jeopardy child care resources for thousands of families and providers. It needs $300 million. Under the program, low-income families are charged a co-payment for care of children from birth to age 12, and the state picks up the remaining cost. The idea behind the program is to make it easier for more people to join the workforce.

Berry said she received a letter from the Department of Human Services indicating she had been approved for child care assistance for her special needs daughter. But then she got a call from the center where the child would have attended and was told funding issues meant she couldn't come after all. Berry had to find alternate care for her 2-year-old, who suffers from epilepsy and has several physical and developmental disabilities.

"I just want him [the governor] to feel the pain that I'm going a single mom," said Berry, a [McDonald's] fast-food worker earning minimum wage."

AS ANY shrewd politician is aware, the first step in a fight is to take out your most dangerous opposition. Since Bruce's disdain for the poor, children, elderly and disabled is as plain as his carefully chosen Carhartt jackets, he likely sees them as easy targets. His concurrent attacks on unions, particularly in the public sector, are therefore part and parcel of Rauner's overall plans.

The same day that AFSCME Council 31 entered into negotiations with the state of Illinois, Rauner issued an executive order on February 9 to stop collecting "fair share" dues from members who unions are required to represent, regardless of whether they sign a membership form. The number of union members who have opted for "fair share" currently amounts to less than 10 percent, but Rauner's hope is that this number increases. While this order is still being fought out in court, Rauner has further ordered that "fair share" fees be diverted by state agencies into a separate account run by the agency rather than the union.

This is nothing but another attack on unions by going after their funding. Making union dues optional while requiring representation (since a contract represents all workers in a workplace) is like having a health club where fees aren't mandatory. Anyone could come in and use the facilities and advice of professional trainers, but only a section of the members would actually pay for its operation. Much like a gym would eventually cease to exist without financial resources, a union would similarly be dismantled.

Many of these unions represent workers who provide the public services slated for cuts and are out there every day helping those who are suffering under the economy that has only benefited the 1 Percent. These union members also have a vested interest in their pension plans, another target of Rauner, as they do not pay into or collect Social Security.

Adding to the potential for corruption Rauner supposedly ran against, his previous firm, GTCR (from which he "retired" in 2012 after 30 years), manages funds for the Illinois state pension systems of teachers and state workers worth tens of billions of dollars. He has supposedly set up systems to distance himself from this blatant conflict of interest, but the history of looting of public systems by private entities is simply too long to document.

RAUNER'S BUDGET has even drawn criticism from the mayor of austerity himself, Chicago's Rahm Emanuel. Facing an April runoff for re-election, Emanuel's is attempting to distance himself from the Republican private equity specialist he once did business with during a brief stint as an investment banker which made the mayor personally wealthy.

While Emanuel is a Democrat and Rauner a Republican, the two have been close friends and even political allies, with Emanuel appointing Rauner as chairman of the city's tourism agency soon after he became mayor in 2011.

Mayoral challenger Jesus "Chuy" García, however, sought to use the mayor's talk on the state budget to reinforce Emanuel's close ties to Rauner--including a reference to a 2010 photo of Emanuel and Rauner at a Montana resort with a bottle of wine so exclusive that it's available only through a private vineyard whose members pay six figures to join the club.

García, however, said in an interview with In These Times, "I am proud of our ability to address budget deficits, the budget deficit we inherited was massive, and to balance it, we had to layoff 500 people. That was probably the most painful decision we had to make."

Whatever promises he has made regarding what he would do if elected mayor, it's clear has had no compunction about cutting jobs to solve deficits--versus traveling the more difficult road of taxing the wealthy.

So what about these billions in shortfalls that Quinn and now Rauner have used as an excuse to cut services? A recent nationwide study by the Keystone Research Center in Pennsylvania released specific results on nine states, which included Illinois because its tax structure is particularly regressive. If the income earners in the top fifth of the state paid the same rate as the middle fifth, there would be an annual additional tax revenue of $8.6 billion, an amount greater than the present and next year's deficit.

Hedge fund managers such as Ken Griffin, CEO of Citadel, who made $900 million in 2013 and paid less in taxes as a percentage of income than those who work for a living would certainly not be happy about any such changes in the tax code. His millions in political donations to the likes of Bruce Rauner and Rahm Emanuel ensure that he and his class have all the economic freedom that money can buy, while the rest of us are expected to cover the social costs of their exploits.

Unemployment and homelessness, a direct result of Wall Street gambling on adjustable rate mortgages, and the accompanying health and social destruction demands more public services, not less. Many pension funds took double-digit hits in value during the 2007-08 financial crisis, but politicians didn't scramble to organize bailouts for them. The individuals and institutions that produced these problems should be held accountable, not public-sector workers who do their best with limited resources to ameliorate the worst that capitalism has to offer.

Riding the bus to Springfield with several dozen fellow RNs who are also represented by National Nurses United to join activists from around the state in fighting these cuts was a good beginning. It was unfortunate that besides SEIU HCII, there were not many other unions mobilizing. If the austerity agenda of Rauner and Rahm is to be resisted, we won't be able to depend on politicians from either party to fight for us, and that resistance will have to be in the streets, classrooms and workplaces across the state.

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