If you want to know which individual political race has the biggest stakes in 2014, look no further than the Land of Lincoln.
The Illinois governor’s race pits incumbent Pat Quinn, a Democrat, against upstart non-politician Bruce Rauner. Why are the stakes so huge? Because Illinois is arguably the worst-run state in America. It’s a blue state that has been run for many years by corrupt and bungling politicians, including Rod Blagojevich, who went to jail for trying to sell a U.S. Senate seat, and Mr. Quinn, who has run the state’s finances into the gutter.
This year shows no improvement. Even as the national employment picture has improved, Illinois actually managed to lose more than 15,000 jobs throughout the first half of 2014. In June of 1998, Illinois had 5.07 million private-sector jobs. In June of 2014, Illinois had just 4.98 million. Somehow, Illinois managed to lose jobs during this 16-year time frame.
If Illinois were to elect a reform-minded governor in a deep blue state that’s hemorrhaging cash, it would be a thunderbolt to the political class around the nation. Illinois could become a laboratory experiment about whether conservative ideas can work in a state that has been ruled by teachers’ unions and a self-serving political machine in Springfield and Chicago.
I caught up with Mr. Rauner in Chicago last week. He’s ruffling liberal feathers by going into black inner-city schools and Hispanic neighborhoods and talking about school choice, economic opportunity, family stability, and jobs. “I’m getting standing ovations when I go to black churches and talk about school choice,” he says. “Parents understand it is their kids that are victimized by lousy public schools in Chicago.”
Rauner wants to cut taxes to revive the economy and talks about “restoring Chicago’s status as a world-class city.” The “unfunded pensions and taxes are holding back a real recovery in Illinois,” he says. He talks about Jack Kemp as one of his role models.
Mr. Rauner is a fabulously successful money manager who has been a lead investor in some of the great iconic American companies over the last three decades. He’s the opposite of slick — he’s a little awkward as a politician on the stump — but what he exudes is sincerity. He’s running as a non-politician who has the business experience to turn around the state’s finances. He won his five-person primary by telling voters, “I’m the only one up here who isn’t a professional politician. These are the people who created the problems in Springfield.” In this era of rage against the political class, the message (and the millions of dollars he poured into his campaign) carried the day.
He’s promised to take a jackhammer to the bloated state budget. The Left is already rolling off the shelf the anti–Mitt Romney campaign — i.e., rich people like Rauner don’t care about people like you.
That isn’t working — at least so far. The polls have this race at a tossup, in a state that Obama won by nearly 20 points.
It’s a race about whether Illini voters understand fully how much trouble the state is in. Even with Mr. Quinn’s giant tax hike, the state is bleeding cash. It has billions in unpaid bills to vendors — a problem that has persisted for years — and its credit rating is the worst in the nation after a recent round of additional downgrades. There have been 13 downgrades on Illinois bonds since Quinn took over.
The corporate tax rate of 9.5 percent, the fourth highest in the United States, combined with the federal tax rate gives Illinois a business tax exceeding any national corporate income tax in the industrialized world. After the 2011 tax hike, the state had the largest rate of outward migration in the nation. Over the last five years it has been in the bottom ten states in the nation in job growth.
The income-tax rate was 3 percent when Quinn entered office. He raised it to 5 percent and now the teachers’ unions want to raise it again to 7, 8, or 9 percent. They also want to get rid of the state’s constitutional requirement for a flat tax. “If Quinn is reelected,” says Rauner, “taxes are going way up in the next four years.”
Perhaps Illinois voters will wake up to what is happening in neighboring states like Indiana, Wisconsin, and Michigan. Reform Republican governors there have been cherry-picking businesses from Chicago and the entire state. “We love it here in Indiana when Illinois raises its taxes,” says Hoosier State governor Mike Pence. When you fly into O’Hare Airport and walk down the terminal, there are massive ads explaining how much more pro-growth Indiana is than Illinois.
Some skeptics say that even if Mr. Rauner wins, he won’t be able to overturn the corrupt machine in Springfield. Don’t be sure about that. If Rauner makes it to the governor’s mansion, he will have a gigantic mandate from voters to turn Springfield upside down and get the finances in order. The big losers will be the teachers’ unions, whose clout will be greatly diminished — it couldn’t happen to a nicer group of people.
“This race is about whether the people of Illinois want a major change in political leadership and direction. We’re headed financially in the direction of Detroit,” he says. After a decade of crime, corruption, cronyism, and credit collapse, God help this once great state if the voters opt for four more years of the same.
— Stephen Moore is chief economist at the Heritage Foundation and a former resident of Illinois.