The most important question asked of Bruce Rauner during last week's gubernatorial debate in Peoria was posed by Jamey Dunn-Thomason of Illinois Issues magazine.
She pointed out that Republican Kansas Governor Sam Brownback had cut taxes across the board on the theory that it would boost the state's economy. His idea hasn't worked. What's happened instead is a huge revenue shortfall, which has forced gigantic state budget cuts and created an economy that now lags behind the rest of the country. So what did Rauner think of Brownback's policy, Dunn-Thomason asked.
Before we get to his response, some background. It has seemed to me over the past several months that Rauner is a true believer in "Brownbackism." He's proposed slashing the income tax over four years - from 5 percent to 3 percent - without regard for the budgetary pain it would cause, and he's predicted that doing so would so intensely stimulate the state's economy that all those lost revenues would magically be replaced by new income from growth.
The hard truth is that pretty much the entire 2011 Illinois-income-tax hike pays for the state's pension payments. Illinois had kept its tax rate low for decades in comparison with most of the nation because it was skipping and skimping on its long-term pension obligations, which finally led to big trouble with the state's credit-raters. And because the Illinois Supreme Court appears to be in no mood to help the state out on pension reform, the only responsible thing to do is to keep revenues about where they are now to avoid a disaster in the rest of the budget. You might not like to hear this, but the math is the math.
What Rauner's been saying to date is ideologically driven nonsense designed to appeal to a gullible and angry public. He absolutely cannot do what he says he'll do unless he intends to drive the pension systems into bankruptcy, but he cannot legally get away with that.
Rauner has also pledged big spending increases for education, infrastructure, natural resources, corrections, and a host of other state programs. How the heck can he do that if he plans to slash state revenues?
I've been hearing from some Republicans over the past couple of weeks that Rauner is planning to "pull a Jim Thompson." Our former governor twice ran on a pledge not to raise taxes, in 1982 and then again in 1986. But as soon as he was safely sworn in, he declared he had not realized the extent of the budget problems and now firmly believed that Illinois desperately needed a tax hike.
Rauner's proposed expansion of the sales tax to services would only bring in $400 million - a drop in the bucket compared to the billions lost from the income-tax-hike rollback, and the expansion wouldn't even begin to provide the revenues needed to fulfill his spending promises.
But if you listen carefully, you'll often hear him say that he hasn't completely ruled out expanding that new sales tax to other services.
What I've been told by people who have regular private contact with Rauner is that he intends to drastically expand the service tax beyond what he's claiming now to replace some of the revenues from gradually phasing out the income-tax hike. He'll have a "Big Jim Moment" come January if he's elected.
Let's go back to last week's debate.
"I don't agree with the tax policies that were put in place in Kansas," Rauner declared in response to Dunn-Thomason's question. In other words, tax cuts without regard for consequences are not in Rauner's plans.
The GOP nominee then returned to his familiar talking points about looking "at the entire tax code" to close corporate loopholes and "broaden the base, lower the rates."
Put that together with his Kansas statement, and it supports what I've been hearing about what he actually intends to do with the budget.
Rauner still isn't acknowledging that his promises are unrealistic, and he still hasn't reconciled the gap between what even a broad-based service tax would raise and the lost revenue from his proposed income-tax cut.
But read between the lines and you'll get a better idea about his plans.
Rich Miller also publishes Capitol Fax (a daily political newsletter) and CapitolFax.com.
