February 27, 2015

WINNING THE WAR ON WAGES:

Illinois Gov. Bruce Rauner is out to emancipate the Land of Lincoln (George F. Will, 2/25/15, Washington Post)

After more than a dozen credit-rating downgrades in five years, Illinois has the lowest rating among the states. Unfunded public employees' pension liabilities are estimated, perhaps conservatively, at $111 billion, the nation's largest such deficit as a percentage of state revenue. Currently, public pensions consume nearly 25 percent of general state revenues. The state owes vendors $6.4 billion in unpaid bills, and more than 1 million people have left Illinois for less dysfunctional states in the last 15 years. Debt per resident is about $24,989, compared with $7,094 in neighboring Indiana.

Four of the previous nine governors went to prison, so, Rauner says, "people know we've had bad people in charge." Bad but routine practices are astonishing. Some legislators practice law, specializing in real estate tax appeals: They are paid a portion of what they save clients by reducing the clients' bills under the laws the legislators have written.

Rauner says previous governors from both parties have been complicit in the unionization of about 93 percent of government employees. Unionization began during the 14 years (1977-1991) of Republican Gov. Jim Thompson. Gov. Rod Blagojevich (D), now an inmate, instituted "card- check" unionization. Rauner says union organizers would tell individuals: Sign the card or else -- we know where your wife works and your children go to school.

Rauner is a tall, confident, relaxed man with a powerful voice and a plan to break "a totally rigged system." The plan includes structural reforms necessary to enable lasting policy reforms.

By executive order, Rauner has stopped the government from collecting "fair share" fees for unions from state employees who reject joining a union. This, he says, violates First Amendment principles by compelling people to subsidize speech with which they disagree. The unions might regret challenging this in federal court: If the case reaches the Supreme Court and it overturns the 1977 decision that upheld "fair shares," this would end the practice nationwide.

Rauner hopes to ban, as some states do, public employees unions from making political contributions, whereby they elect the employers with whom they negotiate their compensation. Rauner notes that an owner of a small firm that does business with Illinois's government is forbidden to make political contributions. Rauner also hopes to enable counties and local jurisdictions to adopt right-to-work laws, thereby attracting businesses that will locate only where there are such laws.

He hopes the legislature will empower voters to ratify changes to the state constitutional provision that says public pensions can never be "diminished or impaired." He also proposes shifting state employees from unaffordable defined-benefit plans to a more affordable plan for the state. Furthermore, he hopes to end practices that now have more than 11,000 retirees receiving six-figure pensions.

Posted by at February 27, 2015 4:27 PM
  

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