As the 2017 Illinois legislature sputters to a close, the Democrats, with some Republican help, passed a state budget heavy on increased taxes and with none of the reforms demanded by Governor Rauner in his “turnaround” budget, which included reforms on pensions, property taxes and workers’ compensation laws.  The Governor vetoed the budget, a veto which was overridden with Republican help in the in the House, where Democrats did not have a veto-proof majority.

So why did the Republicans come to the aid of Speaker Madigan?  The short answer:  Standard and Poor’s had threatened to downgrade Illinois’ general obligation bonds to “junk” status if the state did not pass a budget for the third consecutive fiscal year, which started on July 1st.  The winner was Standard and Poor’s and the Rauner/Madigan heavyweight fight may have been delayed to the 2018 election when the Democrats seek to oust Rauner (who has already committed $50 million to his reelection) as a person particularly ill-suited to achieve consensus and the Republicans will demonize Madigan, whom they say is the reason for the sad state of Illinois’ fiscal woes and the poster boy for “tax and spend” Democrats.

Workers’ compensation reform, medical fee alteration?  While nothing appears finally settled, it is expected that Governor Rauner will veto the Democratic solution to the workers’ compensation situation.  The Democrats have passed bills to create a state run, not-for-profit, workers’ compensation insurance company and to crack down on “excessive profits” of workers’ compensation insurers.  Governor Rauner supports legislation to stop doctors from dispensing medicines and to impose a Medicare fee schedule (doctor fees were slashed 30% in 2012, which appears to have resulted in a significant profit improvement for insurers).  There appears to be no significant support for these measures.

Most betting people believe that the issues separating Governor Rauner and the Democratic majority will not be addressed until 2019 assuming that the 2018 election cures the existing standoff.  However, this is Illinois which has proven to be unpredictable in the past.