(c) 2017, The Washington Post.
CHARLESTON, Ill. – Reggie Phillips had all the right qualifications to get elected to the state House from this rural community about 200 miles and a world away from Chicago. The silver-haired businessman was successful and self-made, a born-again Christian with a deeply conservative, low-tax message.
But that was in 2014. A two-year partisan standoff over the budget rattled his district, leaving the university that is its economic engine struggling for survival. So a few months into his second term as a member of the Illinois House, Phillips broke with most of the state’s other Republicans and voted for a budget that raised the state income tax 32 percent.
“My choices were, let it burn or come back and fight another day,” recalled Phillips, 64, sitting low in his chair in the dining room of a hotel he owns here. “I’m really not interested in seeing my state burn.”
Phillips is not alone. Across the country, Republicans who had long adhered to anti-tax approaches are defying party orthodoxy and voting to raise taxes, bending in the face of dire financial problems plaguing their state budgets and pressure from constituents.
In South Carolina, Indiana and Tennessee, Republicans voted to increase gas taxes. In Alaska, some Republicans proposed reinstating the income tax to fill a gaping hole in the budget caused by low oil prices. In Michigan, a dozen Republicans joined with Democrats in the legislature to sink a proposal to reduce the income tax.
Kansas most famously became a cautionary tale this year after the Republican-controlled legislature rolled back a series of dramatic tax cuts that did not turbocharge the economy – as Republican Gov. Sam Brownback had promised – but rather left the state in debt and schools underfunded.
The fight also is playing out in Washington, where Republicans who control Congress could take up tax reform as their next priority. President Trump has promised to enact the a huge tax cut, but he is expected to face resistance from moderates within his party.
The resistance is mounting within a faction of the GOP because Republicans are finding that the low-tax dogma they espouse either doesn’t work or isn’t favored by voters, said Bruce Bartlett, an economist who served in the Ronald Reagan and George H.W. Bush administrations.
“There are massive and growing pressures to spend money on things that people want government to spend money on, and there just isn’t any way of doing that without raising revenue,” Bartlett said. “If you view tax cuts and spending increases as opposites, the trend has moved in the direction of spending, and that has changed the political calculation that raising taxes is a viable option.”
But to hard-liners in the GOP, the actions of Republican defectors like Phillips amount to a betrayal of fundamental party values.
“What’s been exposed is . . . there is this contingent within the GOP of big-government Republicans,” said Dan Proft, an influential Republican strategist and conservative talk show host in Illinois. “They’re afraid to reduce, reshape, rescind benefits that have been conferred even if we can’t afford them.”
Proft is chairman of Liberty Principles, a powerful political action committee allied with Illinois Gov. Bruce Rauner, a Republican. The PAC endorsed Phillips in 2014 and 2016, but Proft said it will not do so in 2018. “I like Reggie personally, he’s a good guy and a decent legislator, but I think he should retire,” Proft said.
Phillips has not said whether he will run for reelection. Of the 16 Illinois Republicans who voted for the budget compromise last month, six have announced plans to retire, Proft said. Days after the vote, Jeremy Yost, a Charleston businessman and Navy veteran, announced his intention to seek Phillips’s seat, deriding the incumbent as a “taxer and spender” – an attack usually reserved for Democrats.
Phillips, a longtime Republican, said the criticism from the “extreme right” has been infuriating. The son of a factory worker, he supported himself through college doing construction work and now owns a hotel, a number of rental properties and a chain of assisted-living facilities.
In 2014, he decided to seek a seat in the state legislature with the notion that he could make the body run more like a business. He pledged to firmly oppose any tax increase unless it was accompanied by reforms favored by the governor, whose “turnaround agenda” includes spending cuts, reform of workers’ compensation and pensions, and a weakening of labor unions.
Upon taking office, Phillips said, he quickly realized that many of his aspirations were just fantasies while Democrats controlled the legislature. And that even within the Republican Party, it can be hard to be heard when you are a little-known junior House member from a rural district on the Indiana border.
“I suppose I was naive,” Phillips said.
It’s not his only change of heart. Phillips campaigned on a promise to serve only two terms. But now he thinks terms should be limited to three or four so that members have time to gain influence and leadership positions.
The vote to pass the budget in Illinois came amid uniquely bleak circumstances. The Republican governor and the Democratic-controlled legislature had failed for more than two years to agree on a plan to address a gap in revenue and spending, with Rauner focusing on his reform agenda and Democrats insisting on a tax increase.
The impasse left the state $15 billion in debt and on the verge of seeing its credit rating downgraded to junk status. The state had no mechanism to pay what it owed to state agencies and social-service nonprofits, forcing them to take out loans or cut services. Universities, already suffering from plummeting enrollment, shed employees and shaved programs. Dentists all but stopped getting paid by the insurance plan that covers state employees; Illinois owed some of them hundreds of thousands of dollars.
With the help of the Republican defectors, the legislature passed a budget last month that included the tax increase but lacked some of Rauner’s reforms, leading the governor to veto it. Then, 11 of those defectors – among them Phillips – helped Democrats override Rauner’s veto.
“If I decide to press my button to override the governor, it doesn’t make me any less a conservative Republican than the rest of the people that stand in here,” Phillips said on the floor before casting his veto override vote, according to a transcript by the Effingham Daily News. Ultimately, one “has to vote for his district.”
The stalemate had particularly squeezed rural communities like Charleston, where many residents are state workers. The town, which has a population of 21,000, was starting to see the trickle-down effect of the woes of its centerpiece, Eastern Illinois University – particularly the layoffs, which numbered more than 300, according to union figures.
Phillips said he held out as long as he could but finally decided to support the budget plan, in large part to rescue the university.
While many constituents thanked him for his vote, the blowback from conservatives was fierce.
Facebook began filling up with angry comments from friends and neighbors, calling him a traitor. In one particularly painful episode, a farmer whose daughter had dated Phillips’s son for four years used crude language to suggest that he was beholden to the Democratic House speaker, Michael J. Madigan.
At the same time, many of those who pressured Phillips to support the budget were less than celebratory.
Jerri Boughan, a dentist from Lawrenceville, had pleaded with Phillips to support the budget. Because a number of her patients are state employees, she said, the government owes her about $120,000. More concerning, she said, was the fact that many of those patients were so embarrassed that their bills were going unpaid that they put off necessary visits.
Despite the budget’s passage, the state has not said how it will reimburse her and other dentists. Yet her employees have already suffered the results of the tax increase.
“I understand why Reggie went across party lines and tried to agree with someone to do something, because we were at a stalemate for three years. Someone had to give,” she said. At the same time, “I hate it for my employees that July 1, wham-bam, thank you, ma’am, they got an automatic 2 percent taken out of their paychecks.”
Kai Hung, a biology professor and faculty union official at Eastern Illinois, said he is grateful that the impasse is over.
On the first floor of the life sciences building, which he said was constructed in 1964, he pointed up at a ceiling of exposed pipes and sagging electrical wires. That, he said, was the result of a modernization project that abruptly stopped when the state budget impasse struck.
“I appreciate their vote,” Hung said of Phillips and other Republican defectors. “But I am not going to forget that for two years before that, they voted knowing . . . the kind of damage they are doing to their communities.”
Today, the legislature is embroiled in another stalemate, this time over schools.
While the July budget authorized funding for K-12 education, lawmakers put off an acrimonious debate about how to divvy up that money across the state. Democrats in the Chicago area are seeking what they view as their students’ fair share, while the governor and Republicans accuse them of seeking a bailout because of the district’s poor handling of the pension system.
This time, Phillips said, he is 100 percent behind the governor and has no plans to cross party lines.
Keywords: Illinois, Illinois budget, Illinois income tax, Illinois tax increase, Republicans, Republicans voting for taxes, taxes, taxation, Reggie Phillips, Sam Brownback