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Shaw Thoughts

I’ve been communicating with many of you for nearly 40 years as a newspaper reporter, a political correspondent on TV, a radio commentator and now as President & CEO of the Better Government Association, an anti-corruption civic watchdog organization.

I know what good and bad government look like, who’s using your hard-earned tax dollars wisely (and who’s not), and what we can rightfully demand of our elected and appointed officials to reform government that is broken at virtually every level. I know where the bodies are buried, how to ask the tough questions and how to hold errant public officials’ feet to the fire.

This is where I’ll be posting pieces and producing videos that help you understand what’s going on in the governments around you, what we think about it and what should be done to make it better. After all, that’s who we are: The Better Government Association.

But we can’t do it alone. I can talk the talk, but you have to walk the walk with me and rest of us at the BGA. I hope this blog can inform, motivate and direct our campaign for better government. It’s our right. And their responsibility.

 

 

Mike Madigan spends a lot of time in Springfield, but the Illinois House Speaker also earns a sizeable income as a corporate real estate tax attorney in Chicago, raising an ethical question that’s shadowed him for years:

Can he reliably steward our state tax dollars, as a powerful legislative leader, while he’s helping building owners and developers lower their property taxes, which deprives local governments of sorely needed revenue, or is that a conflict?

Madigan’s law firm, according to a 2013 Sun-Times investigation, won $57 million in tax reductions for corporate clients over the previous decade.

The issue arose during last year’s governor’s race, when then-candidate Bruce Rauner called for a ban on outside income for legislative leaders.

And it came up again in the budget battle between now-Gov. Rauner and legislative leaders Madigan and Senate President John Cullerton, who’s also a property tax attorney.

Rauner’s "turnaround agenda" includes a property tax freeze, and he accuses Madigan and Cullerton of blocking it to protect their law practices.

"They have a fundamental conflict of interest with the taxpayers, homeowners and small business in the state," Rauner said.

Madigan’s answer: "I go to great lengths to make certain there is a clear division between my law practice and my actions as a public official."

But the Sun-Times reported last year that Madigan’s law firm saved a Chicago company that manages pension funds for the state, and employs Madigan’s son, more than $1.7 million in taxes on its new Downtown headquarters.

The conflict question made me wonder how ethics issues like this play out in other states, so I asked Better Government Association contributor John Slania, associate dean of Loyola’s School of Communications, to investigate.

Slania says ethics laws vary from state-to-state, depending in part on lawmakers’ salaries and whether their jobs are considered full or part-time.

Should Madigan, for instance, who is almost a full-time legislator earning $95,000 a year in base salary and add-ons, be governed by the same rules as Wyoming lawmakers who receive $150 a day during their annual one month sessions?

"There are a lot of factors that make comparisons difficult," says ethics expert Mark Quiner from the National Conference of State Legislatures.

"Every state struggles with ethical issues and there’s no single correct approach."

Illinois is about average when it comes to transparency, accountability and conflicts of interest, according the Center for Public Integrity’s latest State Integrity Investigation, which gave Illinois and a majority of states a grade of C.

Among Illinois’ shortcomings:

  • Lax Laws. New reforms enacted after the impeachment of former Gov. Rod Blagojevich contain loopholes. For example, voters can recall a governor but not a lawmaker. And unlike many states, the Illinois Attorney General can’t empanel a grand jury to investigate corruption.
  • Weak Enforcement. Lawmakers are on an honor system for reporting their own conflicts of interest, the Legislative Inspector General and the Legislative Ethics Commission are both appointed by the Legislative leaders, and lawmakers face no sanctions for their conflicts.
  • Insufficient Transparency. Legislators have to report outside income over $5,000, but not the total amount earned or the specifics, and the disclosures aren’t audited.

Madigan’s latest ethics statement is a monument to opacity. He lists his source of outside income as his law firm, but when the form asks for more detail—"the nature of professional services rendered…exceeding $5,000"—Madigan writes: "Legal services for various individuals, partnerships and corporations." Informative? Hardly.

"Illinois’ ethics laws don’t have any teeth," says Kent Redfield, emeritus professor at the University of Illinois at Springfield. "Lawmakers say, ‘trust me.’ That’s not an ethics policy."

Suggestions for reducing conflicts of interest include:

  • Prohibiting or limiting outside income. No state has done that yet, but proposals are pending in New York and Pennsylvania.
  • Raising lawmaker pay so there’s less need for second jobs. Former Commerce Secretary and ex-White House chief of staff Bill Daley, whose father and brother ran City Hall in Chicago for nearly half a century, suggests legislative salaries much higher than the current base level—$68,000—along with a ban on outside income.

"That," Daley predicts, "would do more than anything else to reduce the conflicts that corrupt state government."

  • Putting teeth in existing ethics laws by requiring full disclosure of outside income, imposing tough penalties for conflicts, and giving voters the power to recall corrupt lawmakers.
  • Giving the attorney general more investigative powers.

All good ideas that merit serious consideration—some, in fact, would be game changers, and others have been suggested before—so the ongoing challenge is to convince Madigan and his Springfield colleagues to embrace reforms that would affect them in ways many would rather avoid.

As Shakespeare put it, "Ay, there’s the rub."

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org. Find him on Twitter @andyshawbga.

Be like Mike, Madam President.

Like a tall shadow in a blue suit, Cook County Board President Toni Preckwinkle confidently defended her controversial plan to increase the county’s sales tax by one cent at a public hearing last month.

She shook hands with a chorus of supporters—clergymen, county workers, retirees, union leaders and suburban mayors—whose comments echoed her rationale for restoring the penny she campaigned to eliminate in 2010: The county needs nearly half a billion dollars to cover a pension shortfall, debt repayments and infrastructure needs.

They called Preckwinkle "bold" and "courageous" for taking "the bull by the horns"—not "kicking the can down the road" or waiting for a state bailout—and last week, after a lengthy debate, county commissioners narrowly concurred.

Preckwinkle’s masterful lobbying job included a pledge to roll back part of the increase—around $200 million— if state lawmakers approve pension reforms.

But she and the commissioners don’t have to wait for Springfield—they can revisit now-Congressman Mike Quigley’s 2003 reform plan, when he was a county commissioner from the city’s North Side.

Quigley’s "Reinventing Cook County" highlights more than 40 potential efficiencies, including consolidating departments, tapping new revenue streams, eliminating programs, transferring services and cutting expenses.

He projected savings of more than $130 million a year, or $170 million in today’s dollars.

Several suggestions have been tried, and a few require state legislation or local government cooperation, but many are clearly within the County Board’s purview. For instance:

  • Quigley projected $36 million in savings by controlling overtime, which continues to be a problem, as evidenced by a $240,000 OT bill for 1,300 County Jail employees who called in sick on Super Bowl Sunday or the next day.
  • He envisioned up to $32 million in reduced jail costs by expanding home monitoring.
  • His report projected $24 million in savings by transferring the sheriff’s patrol of unincorporated county areas to local municipalities, and another $10 million by off-loading maintenance of county highways to local governments.
  • He estimated savings of $8 million by eliminating a county boot camp that mirrors one the state operates; $8 million by trimming consultant fees; $7 million by privatizing the delivery of court summonses; and $3 million by merging property tax administration into one office.

In 2012, the County Board talked about and discarded a couple Quigley recommendations, including a slam dunk: Merging the paper-pushing functions of two offices—Recorder of Deeds and County Clerk—into one, to save up to a million dollars.

Other Quigley proposals are more challenging, but the same Preckwinkle supporters who praised her tough choice on the sales tax should implore her and the commissioners to consider additional reforms that can cut costs, generate revenue and make county government more efficient.

Preckwinkle knows how to streamline—she’s cut the county payroll by 8 percent, reduced health costs by $225 million, and come up with $70 million in savings and new revenue by sharing purchasing and service delivery with the City of Chicago.

So let’s take the next step by dusting off the Quigley report and figuring out what’s feasible today. That could pave the way for a sales tax rollback without relying on Springfield.

As I said to begin this column: Be like Mike.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org. Find him on Twitter @andyshawbga.

There’s a quiet conversation going on in Springfield these days, far from the bright lights and heated rhetoric of Governor Rauner’s battle with Democratic lawmakers over taxes, spending and pro-business reforms.

And despite its relative obscurity, watchdogs like the Better Government Association are paying close attention to the deliberations of the Local Government Consolidation and Unfunded Mandates Task Force because, even with its laughably bureaucratic name, it’s important.

Created by a Rauner executive order in February, and chaired by Lt. Gov. Evelyn Sanguinetti, the 24-member panel is "to make recommendations that will ensure accountable and efficient government…in the State of Illinois."

It picks up where a legislative commission chaired by State Rep. Jack Franks from McHenry County left off last year.

The task force has been discussing the cost of mandates imposed on local governments by the state without commensurate financial support, and amplifying the BGA’s campaign for "smart streamlining"—merging, consolidating and eliminating unnecessary taxing bodies in a state with 7,000 of them, most in the country.

Illinois residents pay $2,350 per capita in various taxes to support those units of local government, fourth-highest rate in the country, according to a BGA analysis of census data.

Illinois ranks second in per capita taxes collected by school districts, and third for "special-purpose" districts like fire protection, libraries and parks.

Last month, at its sixth meeting, the Sanguinetti task force issued its first set of recommendations, and promised more to come.

One recommendation—imposing a four-year moratorium on the creation of new government units—has already been approved by the General Assembly.

That was a no-brainer, but two other streamlining proposals are likely to face ongoing legislative pushback: One makes it easier to put downsizing initiatives on the ballot for local voters to consider; the other enables every Illinois county to consolidate some of its special-purpose districts.

Two years ago the legislature authorized DuPage County to conduct a pilot downsizing program—it’s projected to save tens of millions of dollars—but since then state lawmakers have blocked efforts to empower other counties to consider similar initiatives.

Why? Intense pressure from friends and political allies in those small taxing bodies who fear a loss of jobs, benefits and perks.

So the challenge when the task force issues its final report later this year is to convince state legislators to give it the careful consideration it deserves, with an eye on protecting taxpayers, not bureaucrats.

Streamlining is among the slowest moving, wonkiest reform issues in Illinois, which is why it flies under the radar, but we don’t have the luxury of ignoring the work of the task force, or discounting consolidation as a viable long-term way to economize.

The cupboards of Illinois governments are bare, and we need to find solutions, because postponing corrective action only deepens the crisis.

It’s time for the uncomfortable conversations and painful choices "smart streamlining" requires, like we should have engaged in years ago, before Chicago, its public schools, the State of Illinois and dozens of smaller local governments reached the edge of the fiscal cliff.

Look at it this way: Every wasteful, excessive, duplicative and unnecessary taxing body we eliminate is one more burden lifted off the shoulders of our children and grandchildren in the years ahead.

That should be enough incentive for all of us.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org. Find him on Twitter @andyshawbga.

 

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