Two days of testimony before the bipartisan Legislative Audit
Commission provided some answers, but raised many more questions about Governor Pat
Quinn’s failed anti-violence initiative.
The Commission heard from seven
former members of Governor Quinn’s Administration during the hearings October 8-9 in
Chicago, but failed to receive clear answers as to how and why Governor Quinn’s
Neighborhood Recovery Initiative (NRI) quickly ballooned from $20 million to
almost $55 million seemingly overnight, nor how neighborhoods and providers
were actually chosen to participate.
Lawmakers also questioned how the
stated objectives of the program meshed with the Quinn Administration’s rush to
put the program in place in the weeks prior to the 2010 governor’s election.
The program’s director, Barbara
Shaw, testified that NRI was based on preventive measures that would not show
results for years. But witnesses consistently said it was rushed into place as
an emergency measure to stem violence – a goal that the program could not meet
even if it had been properly implemented.
E-mails show campaign link
As the hearings got under way,
e-mails surfaced that cast doubt on Governor Quinn’s longstanding claim that the
troubled violence prevention program was not linked to his campaign for
Instead, the e-mails revealed
that the program was a regular topic of discussion between the Governor’s
taxpayer-paid Chief of Staff and his campaign manager, including discussions of
how the program could be used to boost support for the Governor in
The e-mails also showed that one
top former administration official, Jerry Stermer, raised questions as to the
effectiveness of the program, including one in which Stermer wrote, “…I am not
at all persuaded that any of the ideas in neighborhood recovery have any solid
evidence to show they achieve their goals.”
Grew out of February audit
The Audit Commission meetings
were part of the panel’s statutory authority to review audits of state
agencies. In February, Illinois Auditor General Bill Holland released a
scathing audit on the first two years of NRI. It found that the program was
hastily implemented just before the 2010 gubernatorial election, that Chicago
aldermen influenced what agencies received the nearly $55 million, and that the
entire program lacked proper oversight.
During the hearings, none of the
individuals who testified could provide any documentation showing how
neighborhoods were actually chosen for the program.
The commission voted to keep the
NRI audit open while more evidence and documentation is collected. The panel
has also tasked Auditor General Holland with additional work in regards to an
NRI microloan program that was discussed during testimony. An additional
resolution is pending to audit the second two years of the NRI program.
In addition to the ongoing LAC
review of NRI, multiple grand jury subpoenas have been filed on the program,
including two from the US Attorney’s offices in Chicago and Springfield, as
well as from the Cook County State’s Attorney.
Illinois ranked 48th
Illinois ranks 48th in
the nation in “Economic Outlook” according to the latest edition of “Rich
States, Poor States,” an annual analysis of the relative
economic outlook of the states, published by the American Legislative Exchange
That’s the same ranking Illinois
received the past two years. It’s based on 15 variables, including business tax
rates, legal climate, workers’ compensation costs, debt service payments and
sales and property tax burden.
The state’s high marginal
business income tax rate of 9.5% was ranked 44th in the nation. Its
11.1% debt service as a share of tax revenue ranked it 43rd in that
category. A $2.83 per $100 of payroll cost for workers’ compensation ranked 47th.
Illinois did receive a relatively
high score for its low percentage of public employees per 10,000 people,
ranking 11th in that category. It also ranked 11th for
its sales tax burden of $16.36 per $1,000 of income.
Workers’ compensation costs hurt
High workers’ compensation costs
have long been a thorn in the side of Illinois employers and the state’s costs
continue to outpace neighboring states. Indiana’s $1.16 per $100 of payroll is
the second lowest in the nation and less than half that of Illinois.
Neighboring Iowa, Kentucky, Wisconsin and Missouri all have lower workers’
compensation rates than Illinois, with only Wisconsin breaking the $2 per $100
of wages mark and even that state’s rates are more than 75 cents per $100 of
wages lower than Illinois.
Illinois also ranked 48th
for domestic migration – a measure of the number of persons moving into the
state versus the number moving out. According to the study, more than 600,000
persons have fled Illinois since 2003. A similar measure looked at the number
of new taxpayers as a percentage of total taxpayers in each state and again
found Illinois 48th in the nation.
This was the seventh edition of
“Rich States, Poor States.” Its authors are Dr. Arthur B. Laffer, who served as
a member of President Ronald Reagan’s Economic Policy Advisory Board and is
best known for popularizing the “Laffer Curve” showing that tax revenues
decline if tax rates exceed an optimal percentage; Stephen Moore, chief
economist for the Heritage Foundation and a former member of the Wall Street
Journal’s editorial board; and Jonathan Williams, senior task force director of
tax and fiscal policy at the American Legislative Exchange Council.
School-aid changes worry suburbs
A proposal that would strip many
school districts of much of their state funding continues to generate
controversy in suburban areas of the state.
Many local legislators and their
local school officials have held or plan to hold public meetings to raise
awareness of Senate Bill 16, a measure that would radically reshuffle state
Typical of the meetings were forums
held on October 7 at St. Charles North High School and on October 9 at Wheaton
Warrenville South High School, where hundreds of people turned out to learn
more about how the measure would impact local schools.
Estimates from the State Board of
Education forecast that some individual schools in suburban communities would
lose as much as 80% of their current state funding. As a result, already high
property tax rates in suburban counties could increase to make up for the lost
revenue or local schools might be forced to eliminate programs and lay off
The issue generated a sense of
urgency after it was revealed that House Speaker Michael Madigan (D-Chicago) had
convened a group of House Democrats to meet in closed-door sessions to review
In the past, Madigan has termed
state support for downstate and suburban teacher pension payments a “free
lunch,” reinforcing concerns that Senate Bill 16 would be used to strip
suburban schools of state support and channel more money to the Chicago Public