The Christie Way vs. The Quinn Way

New Jersey Governor Chris Christie is traveling to Springfield, Illinois today to do a fundraiser for Bill Brady, the Republican gubernatorial candidate. While he’s in town, Christie should drop by the capitol and give Illinois Governor Pat Quinn, a Democrat, a lesson on how to trim state labor costs.

While Governor Christie has sensibly challenged the public employee union status quo in the name of fighting deficits, Governor Quinn is cementing union perks in place even as the state’s fiscal condition deteriorates.

The recent announcement of a deal between Quinn and AFSCME to stop any public employee union member layoffs and facility closings through June 2012 is causing a minor uproar in the Prairie State. Illinois is facing a record $4.7 billion backlog in unpaid bills, and the union’s agreement to accept a measly $50 million in savings in return for the concessions doesn’t pass the smell test.

The fact that AFSCME endorsed Quinn just days earlier brings up unpleasant reminders of Illinois’s history of a “pay to play” state. According to reports, Quinn’s budget director David Vaught attended a union endorsement session, albeit on his personal time.

Labor costs make up one in four dollars spent from Illinois’s general funds, and walling off a major chunk of the state budget from any spending reforms makes balancing the books infinitely more difficult. Under the Quinn deal, changes to the collective bargaining agreement would be forbidden until one-third of the way through the next gubernatorial term. By then, Illinois could be bankrupt. The state needs more flexibility to deal with public sector unions, not less.

As is the case across the nation, public employee compensation in Illinois is long overdue for a “right sizing.” The average barber on the state payroll made $65,967 in 2008, more than double the average pay of barbers statewide. Unionized employees are scheduled to receive “cost of living” pay raises worth 8.25 percent between January 2011 and January 2012–never mind that inflation is minimal.

According to an upcoming study from the Illinois Policy Institute, Illinois state employees enjoy significant monetary advantages over private employees, both in wages and benefits, and work less time in return. Perhaps most striking is the fact that there is no generally available reporting of state employee compensation, which is by far the largest expenditure. This would be inconceivable in a private enterprise.

The “no lay off” deal goes beyond jobs; another big giveaway is managing rising health insurance costs. According to AFSCME talking points, another agreement exchanges $70 million in “greater efficiencies in the group health insurance program” for the nullification of a provision allowing the state to open the contract this year to renegotiate health insurance costs. At exactly the time when the state should be pursuing creative market-based reforms–like the Health Savings Accounts that were successfully implemented for public employees by Indiana Governor Mitch Daniels–Quinn is slamming the door shut.

Quinn’s decision to roll over on union demands doesn’t mesh well with his persistent calls for hiking the state income tax. A June poll commissioned by the Illinois Policy Institute found 62 percent of likely Illinois voters thought the state spends too much money. When asked how to solve this problem, 49 percent said cut important programs while just 34 percent wanted their taxes raised. Fifty-two percent of independents said they’d be more likely to support a candidate who lowered state employee pay to private sector levels during the budget crisis, compared to 25 percent who said it’d make them less likely.

A moribund economy with poor job conditions is leading families and businesses to more closely watch their bottom lines. Heading into November, they don’t have to look very far to see major de-stabilizers ahead in the form of pending federal, state, and local tax hikes.

Voter frustration, fiscal mismanagement, and union bailouts are a potent political mix. Will this translate into major change on election day? One thing is sure: Illinois will need a strong dose of The Christie Way if the state wants any chance of shedding its reputation as a fiscal nuthouse.