Illinois vs. Wisconsin

by Joshua Culling

This evening, the Democratic National Convention will feature a speech by Illinois governor Pat Quinn. It is an interesting choice, mostly because of Quinn’s abysmal record on the most important issue of this election: the economy. But it is also notable because of the similar governing approaches of Quinn and another prominent executive from Illinois, Barack Obama, and their shared contrast with two Wisconsin reformers, Scott Walker and Paul Ryan.

Quinn, like Obama, has shown no interest in reforming unsustainable entitlement programs. Facing a massive budget hole, he championed the largest income-tax increase in the country through his state legislature. Those who expected this 67 percent personal income-tax increase, coupled with the nation’s fourth-highest corporate-income tax rate, to shore up the state’s vastly underfunded pension system were mistaken; Quinn simply ignored a required $4 billion pension payment, leaving the system in shambles with no path to solvency.

Much to Quinn’s chagrin, Governor Walker has delighted in contrasting his record with that of his neighbor to the south, and the two approaches could not be more different. Walker took office in January 2011 with a mandate to get government spending under control in Wisconsin without raising taxes. He delivered in a major way, championing public-employee compensation reforms that allowed local governments to avoid property-tax increases (often facilitating cuts) while avoiding teacher layoffs. Indeed, this required some political courage, as unions led an expensive recall campaign against the governor. He prevailed, and his mandate to continue to fix the state is as strong as ever.

In many ways this battle between the Wisconsin and Illinois styles of governance is playing out in the presidential race as well. Mitt Romney chose another bold reformer from Wisconsin in Paul Ryan to fill out his ticket. As chairman of the Budget Committee, Ryan has taken a serious approach to dealing with the country’s entitlement crisis. Ryan, like Walker, has staked his legacy on reforms that a decade ago would have been politically impossible. But his seriousness and meticulousness won over his colleagues in Congress, and the Ryan budget passed the U.S. House last year.

#more#President Obama, on the other hand, has seemingly little interest in building a consensus around serious budgetary reform. Not only have his budget proposals failed, they have failed to garner a single vote over the past two years. The Senate voted 97–0 against the Obama budget in 2011, the House voted 414–0 against earlier this year, and the Senate followed with an even stronger showing of disapproval, this time registering a 99–0 vote in opposition. That’s 610 no votes in Congress and not a single yes. That’s largely because his plan would have produced $6.4 trillion in new deficits over the next ten years.

The similarities between Obama and Quinn don’t end there, and are really quite striking. They both have pushed for “reverse tax reform” — raising marginal rates and shrinking the tax base. Quinn has already done this by raising Illinois’s personal and corporate income-tax rates dramatically, and then providing microtargeted credits to keep preferred taxpayers from fleeing the state. Obama has proposed the same: an income-tax increase on high earners and the majority of small business profits coupled with a number of credits and deductions, most notably for “green-energy projects.”

This leads to another area in which the Illinois duo is in lockstep: corporate welfare. Once Quinn slapped a massive tax hike on his state’s business community, he scrambled to offer “incentives” to large corporations like Caterpillar and Sears in order to keep them in Illinois. President Obama’s corporate welfare has been most prominently exemplified through his administration’s relationship with Solyndra, which received $535 million in federally guaranteed loans shortly before filing for bankruptcy. It is evident that prominent Obama donors associated with Solyndra stood to benefit greatly from this federal handout.

And finally, both have presided over credit downgrades due to fiscal recklessness. The Obama downgrade, the first in U.S. history, took place last summer. The situation keeps getting worse, as the national debt is expected to climb past $16 trillion while the Democrats are convened in Charlotte. And Quinn’s Illinois saw a credit downgrade just last week. Moody’s considers it the least credit-worthy state in the country.

It does not appear that Pat Quinn will be eager to talk about these similarities between his record and the president’s, though he may highlight their shared geography. But Scott Walker and Paul Ryan have proven very willing to discuss the Wisconsin approach and how it aggressively takes on the problems Illinois has avoided. It is the message of the 2012 campaign.

— Joshua Culling is state-affairs manager for Americans for Tax Reform.