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Gone to Sod


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American Spectator:

Gone to Sod
By RiShawn Biddle on 7.23.10 @ 6:08AM

These days, disgraced former Illinois governor Milorad Blagojevich spends more time on trial trying to dodge federal prison time for his laundry list of alleged pay-for-play misdeeds -- including attempting to sell President Barack Obama's old U.S. Senate and -- and defending his name on Celebrity Apprentice than watching his successor, Pat Quinn, struggle to keep the governorship in Democratic hands against little-known Republican state senator Bill Brady.

But even if he lands in prison, Blago Helmet Hair may be a lot happier with his predicament than either Quinn or Brady will be with theirs. No matter what happens in November, the winner will be presiding over a state government that now makes notoriously dysfunctional statehouses in California and New York look exemplary by comparison.

The state currently owes $5 billion in back payments to school districts, childcare centers, and other creditors, essentially falling into the kind of default status associated with banana republics. It's getting worse. After months of squabbling and backbiting, the state legislature passed a budget without balancing a $12 billion deficit -- then adjourned the session altogether. Declares Quinn, who is now acting unilaterally to balance the budget: "[Legislators] didn't want to…put their fingerprints on any reductions or cuts whatsoever."

The state's long-term fiscal profile is even worse. Taxpayers are on the hook for the teachers' pension fund's deficit of least $35 billion (and as much as $70 billion, according to the Manhattan Institute), the worst in the nation, as well as another $19 billion deficit for other state employee pensions. This doesn't include the $40 billion in unfunded retiree healthcare benefits owed to civil servants. Illinois' total public employee indebtedness of $94 billion is second only to California -- despite having just a third of the Golden State's population.

Meanwhile the Land of Lincoln's political culture -- once renowned for spectacular corruption and amazing efficiency -- has merely become corrupt and incompetent. Blagojevich's likely conviction will mark the second consecutive conviction of an Illinois governor in four years (Blago's Republican predecessor, George Ryan, remains a resident of the Federal penitentiary across the state line in Terre Haute, Ind.). Quinn himself is taking grief for his oversight of the state's secret MGT (Meritorious Good Time Credit) Push program, which released 1,718 violent convicts as early as six months before their time was served before it was ended earlier this year. The Democratic nominee for Obama's old Senate seat, State Treasurer Alex Giannoulias, is swamped by his ties to Broadway Bank, which was seized from his family's control this past April after falling into insolvency. His opponent, Congressman Mark Kirk, has been caught puffing up his military credentials and his work at a nursery school.

All this comes as the Illinois economy remains even more mired in the current recession than the rest of the nation. Unemployment remains in the double-digits with 10.4 percent of residents still out of work. Despite the success of Chicago Mayor Richard Daley (the Younger) in improving the city's school system, Illinois is one of the epicenters of the nation's dropout crisis; it will account for 3.5 percent of the nation's 1.3 million dropouts this year. The statehouse isn't all that interested in doing much on either front: A school voucher program championed by a onetime school choice opponent, controversial state Senator James Meeks, was defeated earlier this year.

Certainly Illinois' peculiar history -- especially the competition and accommodation between Democrat city bosses in Chicago and their Republican counterparts in the state's central and southern regions -- accounts for some of the state's political, educational, economic and fiscal crises. But the decades of thoughtless spending -- fueled by decades of deal making between public employee unions and state officials -- is as much a problem in Georgia and Iowa as it is in the Prairie State. For taxpayers and politicians alike, Illinois' plight serves as a reminder that the best-managed governments eschew overspending, forsake deal-making with civil servant unions, and understand the critical role of government in public safety and education.

GOOD, CLEAN GOVERNMENT HAS never been a slogan by which Illini have lived. Joel Aldrich Matteson, a Prairie State governor from 1853-1857, was caught attempting to cash $224,182 in counterfeit railroad scrip he claimed to have found in a shoebox. Another governor, Lennington Small, was tried (and acquitted) of embezzling $1 million in state funds (four of the jurors in his trial received state government jobs after the acquittal). Then there's Chicago, whose big-city corruption even made the denizens of New York City's notorious Tammany Hall blush. Among the Second City's ne'er-do-wells: The Gray Wolves on the Chicago city council -- who once sold a city gas contract to a shell company they created, then forced an existing provider to buy from it -- and infamous mayor William "Big Bill" Thompson (a vassal of Al Capone and his Chicago Outfit).

Most of the graft and scandal was tolerable because state and local governments -- especially Chicago under the legendary Richard Daley -- were also well run. The state's location in the middle of the country, next to the Great Lakes and other important tributaries, also blessed it with the kind of strong economic growth that allows taxpayers to forgive such sins. By the 1970s, Illinois could claim such corporate giants as Motorola, McDonald's and Sears, Roebuck and Co., as well as the status as the nation's transportation hub thanks to always-congested O'Hare International Airport.

But in the following decades, corruption has become more prominent in Illinois than Lincoln's tomb or the Golden Arches. One thousand politicians and businessmen have been convicted of public corruption since 1970, according to a 2008 report by University of Illinois at Chicago scholars Thomas J. Gradel, Dick Simpson and Andris Zimelis. This includes 17 Cook County judges caught in the federal "Operation Greylord" case, and former governor Ryan -- who was convicted in 2006 for taking bribes in exchange for awarding trucking licenses while serving as secretary of state.

In the past couple of years, the cesspool of moral and ethical turpitude in Springfield (and the rest of the state) has only gotten worse. The University of Illinois system has been mired in allegations that its officials admitted academically unqualified children of politically connected players into its schools. Then-university chancellor Richard Herman, for example, allegedly forced its law school to admit the child of one of Blagojevich's cronies. Illinois Democrats found themselves in an especially embarrassing situation this past February when it was revealed that its nominee for lieutenant governor, Scott Lee Cohen, had been accused of allegedly holding a knife to the neck of an ex-girlfriend. (The party hurriedly moved Cohen aside for the daughter of former U.S. Senator Paul Simon.)

For Quinn, who has proclaimed himself a squeaky clean politico (the same way Blago did during his ascent up the political ladder), the early release scandal has been quite painful. He not only found himself admitting that at least 56 ex-cons were re-arrested after their early release -- he ended up signing into law a bill ending the practice that was co-authored by Brady, his gubernatorial rival.
Political rivalries among statehouse politicians have been as much a fixture of the political culture as corruption. Blagojevich's tenure was marked by his sparring matches with legislators such as the state house speaker, Michael Madigan, and fellow executive branch officeholders such as Quinn (then lieutenant governor) and speaker Madigan's daughter, the attorney general. In 2007, Blagojevich sued Madigan over his refusal to caucus legislators for one of the numerous special sessions he called that year in order to pass an $8 billion tax increase. Quinn himself has sparred with the state comptroller, Dan Hynes, over the budget; the brawling spilled over into the Democratic gubernatorial nomination.

The worst forms of mismanagement have been happening for decades, as state officials and civil servant unions have struck deals that have enriched both sides. Within the past decade alone, the state's police, fire and teachers unions have won numerous perks -- including giving teachers service credit for two years of unused sick and paid time off upon retirement and allowing state employees to retire at age 55 with annuity payments equal to 80 percent of final annual salary. For the taxpayers, it has been devastating; the total pension deficit has nearly tripled since 2005, as the deals (along with moves by state officials to not fully fund the benefits and pension investment losses) have come to roost.

Until recently, the state's solution for these problems has been to finance spending with debt. In 2003, Blagojevich successfully floated $10 billion in bonds in hopes of paying down the teachers' pension deficit; it didn't work. Earlier this year, his successor, Quinn, proposed to float a $3.5 billion offering to cover pension payments for the fiscal year (it didn't fly this time around). Since then, Quinn has actually proposed something rare for Illinois: Cutting pension payments for teachers and other public employees. In April, he signed a measure that increased the age at which teachers can gain full benefits from 62 to 67. This hasn't exactly endeared him to either the state's National Education Association affiliate (which held its nose and endorsed him) or its American Federation of Teachers' unit.

The move has given Quinn something of a profile in courage amid a rather weak group of statehouse leaders (even if it hasn't helped him against Brady in the polls). Whoever wins the election will have to take even bolder action in order to keep the state from going completely bust -- and Lincoln from turning over in his grave.
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