Progress Illinois

This week, the 19-member Pension Modernization Task Force will finalize its report on how Illinois should reform its retirement benefit program for government employees. The panel includes lawmakers, labor leaders, business representatives, and public pensioners.  Because they're still deliberating, we aren't sure exactly what their recommendations will be. But details are beginning to emerge. According to reporting from Doug Finke of the State Journal-Register, those hoping to move to a two-tiered system won't be happy with the results:

Another task force on Illinois’ massive state pension problems is set to wrap up its work next week, but it appears the group will not formally recommend changes to pension benefits as a way to save money. [...]

A draft copy of the task force report specifically blames lack of state funding — not too-generous benefits — for the financial problems facing the systems. The draft report says comparisons were made to public employee pension systems in other states and that Illinois’ systems “were generally found to be in the statistical median.”

The draft report also asserts that the cost of public pensions, measured as a percentage of payroll, are comparable to or less costly than private-sector retirement programs. The Civic Committee and Civic Federation of Chicago disagreed with that analysis. One version of the draft report included those disagreements; in another draft version circulated last week, the disagreements were deleted.

While we credited the Tribune editorial board for their TIF commentary today, their reaction to this news wasn't as reasonable.

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Since the Reader's Ben Joravsky and Mick Dumke published their latest report on Chicago's shady tax increment financing (TIF) system, we've noted the increasing media attention being devoted to the issue, with some reporters even going so far as to refer to as a "huge problem" for the city. Today, as the city budget hearings wind on, the Tribune editorial board does its part to keep the story alive in a piece titled, "It's Our Money."  The board takes that reasonable (and familiar) position that, while TIF can be a valuable and effective economic development tool, Mayor Daley's use of it has gotten out of hand:

TIFs are meant to revitalize blighted areas that wouldn't otherwise be attractive to developers. By designating an area a TIF district, the city lays claim to the new tax dollars generated by rising property values there. Those dollars are supposed to be reinvested in the district to promote growth.

TIFs are one of the better redevelopment tools available to local governments. But Chicago has gotten carried away, creating a vast redevelopment wonderland controlled by the mayor. More than a third of the city, including the LaSalle financial district and most of the Loop, now falls within TIF districts. Though it stands to reason that an area that raises hundreds of millions of dollars in property taxes is no longer blighted, if it ever was, the Daley administration insists the TIFs are needed to keep those skyscrapers from falling into disrepair.

The board goes on to call for more transparency: "Open the books, Mayor. Put everything out in the open so taxpayers can see how their dollars are spent."  

It's great to see more and more voices in the local media speak up about the TIF "mission creep." A more transparent system is obviously needed.  But we should also recognize that there are ways to scale back the system and lessen its drag on local taxing bodies.  Learn more about them here.

Following the lead of Sun-Times columnist Carol Marin, the Tribune editorial board directed their anger over the Cook County sales tax veto override failure at House Speaker Michael Madigan today, blaming the Chicago Democrat for bottling up a bill in Springfield that would have lowered the county's override threshold from a four-fifths majority to three-fifths. They also praise Sen. Dan Kotowski and Rep. Julie Hamos for their vow to revive the bill during the October veto session:

Why would Madigan entomb a common-sense measure to lower the threshold for a veto override?

Because Madigan wants to protect the thousands of Democratic patronage jobs in county government. Many of those payrollers donate money and campaign time to Madigan's party. Overriding Stroger's veto and lowering the sales tax would begin to force some economies -- such as eliminating a few do-little patronage jobs -- on Stroger's government.

So let's bestow on Madigan the honor he richly deserves: co-ownership of Stroger's galling tax hike. They're the taxmen.

As Rich Miller notes, Madigan is not colluding with Board President Todd Stroger. The Speaker has long opposed dropping the threshold, a point the Tribune and lawmakers omit. But there is no reason the will of the people and the elected officials they represent should be thwarted by laws that don't apply to any other level of government. And it's good to see the Tribune rally behind this reasonable legislative fix.

In a front page story today, political reporter Rick Pearson examines a new Tribune/WGN poll of 700 registered Illinois voters and describes President Obama's home-state approval rating as "shaky." Here's an excerpt:

The results of the poll, conducted Aug. 27-31, indicate many of Obama's home-state voters have the same concerns that voters have shown in national polling, where confusion over a complicated health-care reform plan and continued worries about employment have taken an even greater toll on the president's approval rating.

Rich Miller offers a thoughtful critique of Pearson's summary over at Capitol Fax, pointing out that it's not particularly instructive to compare Obama's current approval ratings with those from February, when they were artificially high and the president hadn't yet endured any bruising legislative fights. After all, Obama only won the state with 61 percent of the vote in November.

He also knocks Pearson for his supposition that "Obama’s standing with home-state voters could create problems for Illinois Democrats, if it continues into next year’s general election." A downward trend is obviously never encouraging for a politician or a party. But the president is still broadly popular in the state (only 33 percent disapprove of his performance thus far) and will likely remain so, especially if some version of health care reform is approved.

Then there's Pearson's conclusion regarding independents:

Among the potentially troubling signs for Democrats that surfaced in the survey was the fact that only about half of voters who describe themselves as independents approved of Obama's job performance. Illinois has voted Democratic in recent elections, but independents remain a key swing block.

The Tribune did not release the survey's cross tabs, so we can't see the exact figure Pearson is referring to here.  (Does "about half" mean slightly more than 50 percent? Slightly less?) But it's worth noting that, according to Illinois exit polls, 55 percent of self-described "Independents" supported Obama last November, compared to 43 percent for John McCain. Dropping a few percentage points is hardly definitive, let alone "potentially troubling."

Some members of Senate Finance Committee may be looking to pare down the size of the upper chamber's health care package and the White House is deliberating if they would accept such a deal. Back home, lawmakers are staking out their positions as well. Here's the latest in local health care news:

Foster's Tele-Town Hall

Rep. Bill Foster, a potential swing vote, clarified his stance on many health reform issues during a tele-town hall meeting with constituents last night. The Geneva Democrat reiterated his support for a public option, albeit one that operates on a level playing field with private insurance companies. He also expressed openness to a few funding mechanisms, including a surtax on the top 1 percent of the nation's wage earners or a tax on high-level health insurance policies that currently are provided tax free. For reformers, this should come as a good sign.

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This month, Tribune business columnist David Greising has written two pieces urging more disclosure on the part of Chicago's Olympic bid committee and, in doing so, spurred a lengthy editorial from his paper on the topic.  On Friday, he appeared on Chicago Tonight's "Week in Review" show to discuss the games and continued to push back against the committee's assurances that they are being "open and transparent."  Watch it (full video here):

GRIESING: It's interesting. I've talked to people at the Olympic committee -- Chicago 2016 -- and they all believe that they've been the most open and transparent group that has ever been seen in the face of the Olympic movement. 

And yet, a few weeks away, 40-some days away from the October 2 vote, we still don't know who these insurance companies are that are supposed to be backing -- guaranteeing the bid.  We have no idea who any of the developers are of the Olympic Village.  The guarantee they're looking for -- the unlimited guarantee from the city -- we don't know much about.  We've had a little bit of corruption -- not corruption, conflicts of interest pop up with this Michael Scott -- this Olympic committee member who is involved in a development near the village.

It's just all kind of stirring around and it doesn't smell very good to longtime Chicagoans.

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In recent weeks, we've watched Tribune business columnist David Greising wake up to the idea that, if Chicago wins the 2016 Olympic bid, it could become just the latest venue for closed-door cronyism, corruption, and mismanagement.  More specifically, Greising has urged Mayor Daley and the bid committee to commit to a fully transparent process and subject the process to the Freedom of Information Act. Now the Tribune editorial board has joined the chorus:

Aldermen and citizens need to be confident that the Games will come off without the city taking a bath. Because if and when Daley signs an agreement in Copenhagen guaranteeing that Chicago will deliver the Olympics -- no matter the cost -- those aldermen and citizens will be sitting in the tub.

Our advice to Chicago 2016 head Pat Ryan as he tries to sell an Olympics to Chicago: Be candid. Be specific. Don't sugarcoat risk.

Read their entire list of suggestions for Ryan.

In today's paper, Tribune business columnist David Griesing whacks the Chicago 2016 bid committee for being so discreet about their Olympic fundraising and explains to the public why they don't have to accept the shroud of secrecy. A choice excerpt:

Now, [bid committee chair Pat] Ryan is a phenomenally successful insurance executive. He knows a deal breaker when he sees it, and he knows he needs the city's financial guarantee for the Games or there is no Chicago Olympics.

Ryan and Mayor Richard Daley, who want the Olympics so badly, will do about anything to get that guarantee. And that is why -- in exchange for a government guarantee in a city and state with a corruption-riddled track record -- citizens must insist on access to the Olympic committee's records.

This is called negotiating leverage, and taxpayers and citizens, in those rare moments when they have leverage, are fools if they do not use it.

Access to the Olympic committee's records is within the reach of the people who are being asked to guarantee the Games. All the City Council has to do -- at hearings next month -- is ask.

Go read the whole thing here.

After insisting for months that Chicago taxpayers wouldn't be on the hook for more than $500 million in cost overruns should the city land the 2016 Olympics, Mayor Daley reneged on this promise in June when he agreed to sign a blanket financial guarantee at the urging of the International Olympic Committee. The flip-flop galvanized longtime opponents of the city's bid and also drew criticism from some unlikely sources, including Tribune business columnist David Greising who lambasted Daley in a June 19 column. "The same sort of hubris has caught up with other Olympic cities that lived to regret the cost," Griesing wrote.

In the months since, Greising has clearly continued to think hard about whether taxpayers can trust Daley -- and his secretive, closed-door management style -- with such a massive undertaking.  In his column today, he offers city officials and the Chicago 2016 bid committee a way to build confidence among the public:

If Chicago's taxpayers are to offer an indispensable guarantee, they should get more than the world's biggest swim and track meet. They should get, in fact, a tool that will provide a close-up view into the wheeling, the dealing, the high jinks and palm greasing that will make the 2016 Games uniquely Chicago [...]

In other words, the City Council should insist -- and Chicago 2016 should agree -- that the organizing committee become subject to the Illinois Freedom of Information Act [...]

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Study after study these past few months have demonstrated the global economic crisis' devastating impact on state budgets. It's no secret why. Just as demand for government-backed safety-net services is growing, tax revenues are plummeting across the board. And Illinois is right in the thick of it, with lower-than-expected returns on personal income, corporate income, and sales taxes.

In his Tribune column yesterday, Steve Chapman acknowledged this dynamic. But he went on to argue that overspending by state lawmakers is the real culprit:

The crisis in state budgets is not an accident, and it wasn't unforeseeable. For years, most states have spent like there's no tomorrow, and now tomorrow is here. They bring to mind the lament of Mickey Mantle, who said, "If I knew I was going to live this long, I'd have taken better care of myself." [...]

Illinois is another problem child. The state's general fund appropriation is some two-thirds higher today than it would be if the state had just kept those outlays in line with inflation over the last two decades. That increase, as in California, is the difference between a gaping deficit and a comfortable surplus.

Unfortunately, Chapman grossly oversimplifies how Illinois' state budget operates.

First, the facts. The Bureau of Economic Analysis tracks General Fund spending as a factor of the state's GDP. Between 1997 and 2007, the most recent year for which data was available, spending in Illinois increased by just five one‐hundredths of one percent (from 3.35 to 3.4 percent). Despite boasting the nation's 5th largest population, the Prairie State ranks 45th in spending.

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