Last week, I had the opportunity to travel down to Springfield for a Legislator New Members’ Conference. I happened to look out the window to see the first flurries of winter icing the frame. The chilly change in weather struck me as symbolic. As the winter winds began to blow in Illinois, the cold truth of economic gloom blustered in from official state advisers and bureaucrats. The forecast for Illinois is severe.
New members of the General Assembly spent three days becoming familiar with our new role in public service. Orientation topics included the official bill making process, resources available to us for constituent services, how votes are taken and recorded, the organizational chart of state government, the scope and functions of the state auditor, and a discussion on ethics. These sessions empowered us to turn our ideas into legislation and navigate through the legalities of running our offices.
A second segment of orientation centered on the current and projected fiscal situation in Illinois. A number of uber-educated economics professors from the University of Illinois' Institute for Government and Public Affairs (IGPA) offered several presentations. As one can imagine, the initial briefings included economic indicators and the realities of Illinois' failing economy, as well as a specific discussion of the impact of Obamacare on Illinois. No good news on either front. Although one professor felt it would reassure me to know that that at least 700,000 more Illinois residents will have health insurance coverage at the price of only$800 million when we implement the Affordable Care Act.
Other gems revealed, and not denied by any of the sitting legislators on the panels, were that Illinois has been effectively running deficits since 1999, that the state’s natural growth in income and sales tax is expected to remain flat, and, according to a senior representative, simply using the term “retirement security” will more likely generate solutions than using “pension reform.” I’ve followed Illinois politics closely, and was aware of these ideas. However, it is still unnerving to hear them advocated by a straight-faced adult.
The IGPA syllabus included a panel discussion titled “Revenue Enhancements and Fiscal Efficiency.” The professor’s power point lecture began with the marginal utility of adding additional taxes on income (something I was happy to have him discuss) and moved to showing carbon taxes as a more efficient way to tax. The charts showed graphs of supply and demand curves crossed with the marginal costs of producing coal to help illustrate how efficient a tax on coal is for the intended outcome of generating revenue, limiting carbon emissions, and efficiently allocating energy resources. I love this stuff – that’s why I have a BS in Economics. And, it is why I could not resist offering a solution of my own: instead of taxing coal in Illinois –something we have more of than any other state - we should be exploiting our competitive advantage of living in a state full of energy resources and geographically located where we can produce and then push electricity in any direction. How about this idea? Let’s use our comparative advantage to GROW our way out of this economic mess rather than taxing that advantage away to Kentucky.
The next revenue enhancement presentation included a pro/con discussion on Gambling. On the pro-side: apparently, there is much more room to tax gaming and increase tax revenue –which defies the law of diminishing returns, we should demand further licensing fees since the original licenses were granted for the price of $25,000 each when they were worth one-half billion dollars each, and that racinos are the most advantageous form for gambling expansion in our state. The con-side stated the obvious: increase in bankruptcies, addiction, and crime. Here’s what I know, gaming won’t get us out of our fiscal problems, because it is not spending reform.
The Illinois pension discussion gave a University of Illinois professor a chance to defend the need for great benefits in order to attract the best from a world-wide pool of talent. I found the Big 10 chart comparison indicating the total employer contributions to retirement funds lacking. Missing were data about benefits conferred for contributions made or any comparison of educational outcomes and workload ... not to mention football records (just joking).
When the professor began to touch on the topic of retiree healthcare, I wanted to pull the hotel wait staff, the manager, the owner, and any other private sector worker standing around into the room. His sense of entitlement and a complete ignorance of private sector pay and benefits left me wanting to hear from the other stakeholders – taxpayers and the working middle class.
Despite the obvious bias, I respect the efforts of the IGPA to inform new legislators on the issues we will address in the General Assembly. We certainly need in-depth research and analysis about our economy. However, a better presentation would have included a panel with Douglas Oberhelman, CEO of Caterpillar, John W. Eaves, CEO of Arch Coal, Inc., any grain farmer in the state, a small business owner, and the single parent middle-class taxpayer. Next time, perhaps orientation will include a panel of those paying for government and a few Ph.D's from the business department as well.