CHICAGO — After more than two years of political sparring, missed payments to creditors and plunging credit ratings, Illinois did on Thursday what most states do every year. It finished a budget.
Yet as some lawmakers and state officials cheered an end to the longest state budget impasse in the nation’s modern history, at least one prominent and unyielding critic remained. Gov. Bruce Rauner, a Republican who has clashed with the Democratic-held Legislature since the moment he took office, had vetoed the spending plan, which includes a tax increase.
The governor doubled down on his disgust even as at least 10 members of his own party joined Democrats to override his veto, ending the standoff.
“This is a two-by-four smacked across the foreheads of the people of Illinois,” he said this week, imploring fellow Republicans to stand by him. “This tax hike will solve none of our problems and in fact, long run, it’ll just make our problems worse.”
The narrow veto override in the state House, with exactly the 71 votes that were needed, ended a stalemate that had gone on so long that Illinois had fallen $15 billion behind on bills and been warned that its credit rating might fall to junk status, worse than any other state.
It was a defeat for Mr. Rauner, a former private-equity executive who had never held political office before he promised to “shake up Springfield” and was elected governor in 2014. As a crusading conservative in a Democratic state with deep financial woes and one of the most underfunded pension systems in the nation, he attacked public-sector unions, demanded term limits for politicians and called for lasting changes to the pension system.
Now he is the second Midwestern governor in recent weeks, along with Sam Brownback of Kansas, to face an override supported by some in his own party. In Kansas, where Republicans control the Legislature, Mr. Brownback’s colleagues turned against his tax-slashing philosophy last month. In both states, at least some Republican lawmakers sent a message to their fiscally conservative leaders: They had reached their limit.
The Illinois outcome raised questions about the political future for Mr. Rauner, now abandoned by some former allies and seemingly surrounded by a growing crop of Democratic hopefuls for governor — including some with prominent surnames like Pritzker and Kennedy.
Among supporters, Mr. Rauner’s fierce opposition to a tax increase unless it included other items on his agenda — a freeze on property taxes, cuts to workers’ compensation, term limits — was seen as an example of sticking with principles in the face of overwhelming pressure. It also unveiled a 2018 campaign talking point against the Democrats who ushered through the increase.
“Nobody ever wins the next cycle running on a tax increase,” said Pat Brady, a former Illinois Republican Party chairman. “The governor came out way ahead.”
To critics — including some of the Republican lawmakers who defied him — Mr. Rauner’s position was seen as a reflection of his refusal to acknowledge that the state’s finances had unraveled and of his unwillingness to ponder compromise. Some had alluded to “Governor Junk,” suggesting that Mr. Rauner ought to be blamed if the state’s credit rating were downgraded.
“He’s the governor, and he’s the one responsible,” said former Gov. Jim Edgar, a Republican who described a far different climate when he was clashing over budgets in the 1990s — one in which he and the Democratic leader would work through their disagreements over lunch. “The damage that has been done in the last two years is extensive, and it’s going to cost to get that resolved.”
When he ran for office against Pat Quinn, the incumbent Democratic governor, Mr. Rauner promised that breaking through the Democratic-majority Legislature in a blue state was possible. “If you’ve got an agenda and a steel backbone, you can get major transformation done through the power of the governor’s office,” he said at the time.
On the campaign trail, he wore the outfit of a working man, arriving at rallies on his motorcycle with an $18 Timex watch on his wrist, but his background was more boardroom than blue collar; he rose to prominence as a businessman, a native of the wealthy Chicago suburbs, a multimillionaire with nine homes.
Right away, in his first State of the State speech in 2015, he promised to take steps to restrict labor unions, overhaul the workers’ compensation system and change the tax code. He promoted his “turnaround agenda” all over the state, visiting diners and meeting halls and promising fellow Republicans that they would have a strong advocate in the capital.
Democratic lawmakers called his plans wildly unrealistic. And there was little middle ground when it came time to hammer out a budget more than two years ago.
The governor, seeking a property tax freeze and other changes to be included in a budget deal, was stopped by Democrats. “The nature of what he’s asking for is so dramatic, and inconsistent with the basic principles of the supermajority party,” the Senate leader, John Cullerton, said at the time.
Mr. Rauner particularly clashed with Michael J. Madigan, the longtime House speaker and leader of the state’s Democratic Party, known for his discipline and calculating negotiating style. “Speaker Madigan,” Mr. Rauner said, “he’s got ice water in his veins.”
Still, Republicans in the Legislature stuck by Mr. Rauner, even as pressure intensified in many of their districts to end the stalemate. Towns downstate with public universities have been especially vulnerable to state cuts; many students and faculty have left Illinois, and local businesses have suffered.
In the end, leaders with ties to some of those districts abandoned him.
On Thursday, after the Capitol in Springfield was briefly on lockdown while hazardous-materials teams investigated a suspicious powdery substance, members of the House voted for an override.
“Honest voices prevailed,” said Mr. Quinn, the former governor. He said that the show of opposition marked a turning point in how people thought about the state’s fiscal crisis and the politics around it. “The bottom line is that if they hadn’t acted, the people of Illinois were going to drown in debt, and I think the people of Illinois are onto this now.”
The budget measure, which the Senate passed on Tuesday, will raise the personal income tax in Illinois to 4.95 percent from 3.75 percent, and raise the corporate income tax rate to 7 percent from 5.25 percent. The moves will generate about $5 billion in revenue.
Still, some here say it may not be enough. On Wednesday, Moody’s Investors Service warned the state that even with a budget passed, it might face a credit rating downgrade, given a lack of “broad bipartisan support” and the unsolved pension problems.
Mr. Rauner’s approval ratings were hovering around 35 percent this spring, making him the sixth-most unpopular governor in the nation. The Cook Political Report, analyzing sitting Republican governors, called him “the most vulnerable incumbent seeking re-election next year.”
He has had missteps. In an email from 2011 that was made public last year, Mr. Rauner wrote that half of Chicago Public Schools teachers “are virtually illiterate.” He later apologized, calling his remark “inaccurate and intemperate.”
Though Mr. Rauner was once described as a business associate and friend of Chicago’s mayor, Rahm Emanuel, the men have parted ways. On Thursday, Mr. Emanuel praised the state budget deal and accused Mr. Rauner of pursuing a “my-way-or-the-highway approach” that had led Illinois into gridlock.
Perhaps unsurprisingly, a pack of opponents on the Democratic side have already emerged. They include J. B. Pritzker, a billionaire venture capitalist and philanthropist from Chicago; Chris Kennedy, a businessman and son of Robert F. Kennedy; Daniel Biss, a state senator from the Chicago suburbs; and Ameya Pawar, a city alderman.
But it may help the governor to run as the man who tried to save Illinoisans from a tax increase, said Jak Tichenor, the interim director of the Paul Simon Public Policy Institute in Carbondale, Ill.
Bill Daley, a member of the Chicago Democratic political family who served on Mr. Rauner’s transition team, said he found the end of the two-year budget impasse “a little strange.”
“It’s pretty obvious that he didn’t get anything out of the last two years,” he said of Mr. Rauner. As for the 2018 election, “there’s only one strategy left for him, and that’s to run against everybody: Democrats, Republicans, the town.”
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