Saturday, January 27, 2007

Take it to the Bank

State Treasurer Alexi Gianoullias is wasting no time translating campaign commitments into action. On his first full day in office, he signed an executive order implementing numerous ethics reforms for his office, (many of the tenets of which are set forth in my HB1, the 'pay to play' bill).

He is now turning his sights to improving our lagging Bright Start college savings plan.

As succinctly stated in the article:
Bright Start — under a seven-year contract with one firm since its inception — has consistently been outperformed by plans sold by other states...As of the third quarter of last year, Bright Start's returns ranked 47th out of 48 similar plans nationwide, according to Joseph Hurley, chief executive of, an independent group that analyzes college savings plans...Hurley's group also ranks Bright Start worst in overall usefulness among Illinois' two other college savings plans and lower than many other states' offerings.
One can't help but wonder if Illinois families are getting short-changed at the enrichment of the fund manager for these past many years:
And the fees collected by the fund manager, Legg Mason, rank among the highest for college savings plans, according to investment analysis firm Morningstar Inc...The program handles more than $2.1 billion in more than 141,000 accounts. It allows investors to spread their money across eight different funds, six of which are owned by Legg Mason. (emphasis added)
But there is a light at the end of the tunnel:
The contract expires in March, and Giannoulias has narrowed the field to two firms competing for the new contract... In order to vet bidders, Giannoulias assembled a group of private investment managers to evaluate offers.
Retaining experts to increase the benefits to families saving for the education of their children is not only a sound idea, it is one that is long-overdue. Good job AG.

Wednesday, January 24, 2007

Numbers Game

As somebody pointed out to me about my last post, despite what was in the New York Times article, the State has put out a Request For Qualifications, not an RFP, to gauge interest in selling off the Illinois Lottery.

I stand corrected.

But some of the language in the RFQ is kind of interesting in and of itself. One part promotes the deal by telling potential bidders that they can use market research performed for State to, um, better target customers.
In addition, we anticipate that the concessionaire could further drive sales growth through the application of the Lottery’s recent market segmentation research, in order to reach a better understanding of and increase connectivity with Lottery patrons.
While that sounds like, and is, standard business practice, as I alluded to in the last post, I do not think that heightened efforts to pray on the lower-income population segment that makes up a good chunk of lottery players is going to sit well with a lot of community activists and gaming foes. There are members of the Legislature that would be willing to stand up to this type of targeting by the Lottery. They would have no say in predatory practices by a private vendor.

It also is sounding like a good part of the profitability for bidders will rest by simply having fewer winners.
The concessionaire will also have flexibility in structuring individual game pay-out ratios, limited by a 50% aggregate pay-out ratio floor...Prize payouts (presently amount to) 58.1% of total revenues. (emphasis added)
That amounts to a 14% reduction in pay-outs, far from a negligible number.

Another nugget is that the State is about to get closer to the old-school numbers game business.
The Lottery is about to launch a raffle game with limited tickets and several $1 million winners. It is anticipated that the raffle tickets will sell out in two to three weeks.
That would leave us about two steps away from New York's underground policy rackets. (I know that it's not at all a similar game, but I'm just trying to make a point.) But, that might not be so bad after all:
Over the years, this form of storefront wagering has served as something of a shadow Lotto for thousands of New Yorkers who would rather enjoy better odds than the myriad legitimate games offer - not to mention take their winnings home tax-free.
Now I realize that I may be being unduly harsh on this whole concept, but I don't believe that I am alone in my view on this issue.

Increased targeting of low income players + reduced odds of winning + uncertain long-term benefits to education funding...It just doesn't add up to a good deal for Illinoisans.

Tuesday, January 23, 2007

A Losing Ticket

The article in today's New York Times about selling off the Illinois Lottery was full of surprises. The first surprise was the lead reason being offered by the Administration for the proposal. In the words of budget guru John Filan:
“This is fundamentally a retail business, and governments are not equipped to manage retail businesses,” said Filan. “Gaming is getting so competitive around the world that we’re worried our revenues could go down unless there is retail expertise to run the lottery.”

Unless you've been living under a rock (a rock outside of Illinois, no less), the main thrust of the idea, and its timing, was widely accepted to rest in mollifying the threatened gubernatorial bid of Sen. Meeks by finding quick cash for education.

I suppose that I could have missed something, but this is the first time that I have heard that the sale is intended to boost ticket sales, something that I don't think will sit real well with those concerned about the inherently regressive nature of the lottery.

The next thing that surprised me was this short sentence:

The deadline for bids is Feb. 20.

Again, unless I have missed something, a sale of the lottery would require authorization by the General Assembly. I literally have not spoken with more than two legislators who support such a plan. The main reason tends to be that the sale provides short-term dollars but no long-term support for education funding, and will ultimately leave us worse off than we are now.

How anybody could place a realistic bid in such an uncertain, if not downright adverse, political climate escapes me.

But even if the state and the school kids don't come out ahead at the end of the day, there are at least some winners under the proposal:

Goldman Sachs and UBS are advising the state of Illinois.

So a bold-sounding plan that will likely go nowhere and generate no income for the State, may in fact wind up costing us money.

What a surprise.

Monday, January 22, 2007

Where's the Party (Going)?

The contest to replace the recently departed Tom Lyons as Cook County Democratic Party Chairman has taken some interesting twists and turns. First, a number of likely candidates made it very clear that they had no interest in the position.

Then, Board of Review Commissioner Joe Berrios emerged as leading (only?) contender for the post. Things heated up when west side powerhouse Alderman Ike Carrothers, who had reportedly thrown his support behind Berrios, announced that he too was vying for the spot.

And amidst some very active lobbying on behalf of Berrios and Carrothers, and some potential tension between African-American and Latino committemen, Rep. Lou Lang, who recently became the Niles Township Committeeman, is announcing that he too is seeking the post.

The contest certainly gives the committeemen something to think about. The biggest point of discussion has been why anybody would want the job. Many organizations are in disarray, and any County infrastructure is essentially non-existent. Accordingly, a lot of people envision the job as being a thankless one consisting of fundraising and headaches.

The latent enemy of a local Party organization has been various competing personal agendas and a certain level of distrust among many committeemen. But as the traditional (by Chicago terms) Democratic apparatus continues to erode, the focus needs to turn to ideology and methods to identify, attract and energize Democratic voters.

This would be a great opportunity for a discussion about what the County Party should look like and what it should be doing to help generate interest and expand the base in these changing political times in which we find ourselves.

It will be interesting to watch how coalitions come together or fall apart leading up to the selection of the new chairman. It will be more intriguing to see what happens to the County Party in the future.

Tuesday, January 16, 2007

All Systems Are Go

Just got done with a conference call with Senator Obama and a 100 or so supporters. Having known him for a decade now, I still can't help but be struck by how well he has absorbed the incredible amount of attention that has been heaped upon him. The man still sounds as sincere today as he did in 1996. Which is very.

He told the group that he and his family are eager for what the future may hold. He spoke of making an announcement February 10 in Springfield, and of the desire to focus on a grassroots campaign fueled by 'excitement' and the 'sense of possibility'. This is the same fundamental theme that was the backbone of his Senate campaign and that lit up the country at the national convention.

I don't know what the campaign may bring, but I feel very confident that Barack's presence will elicit a debate and optimism that has been lacking for far too long.

For those looking for more information about the campaign or wanting to see the latest videos, visit

Monday, January 15, 2007

The Meter's Running

When are all holidays not created equal? Apparently, when revenue is at issue.

For some reason, I was looking at the closures for Martin Luther King Jr. Day, a federal holiday.

When I looked at the list below, something caught my eye:

- Schools: Chicago public schools will be closed. Most suburban schools will be closed; check with the local district office.

- Government offices: Federal, state, county and city offices will be closed.

- Postal service: All post offices will be closed, and mail will be collected on a Saturday schedule; only express mail will be delivered.

- Courts: Federal, state and county courts will be closed, except for Cook County Central Bond Court.

- Banks: Most banks will be closed.

- Financial markets: At the Chicago Board of Trade, all floor trading will be closed and electronic trading will resume at normal evening times. At the Chicago Mercantile Exchange, all floor trading will be closed and electronic trading will observe an abbreviated schedule.

- Parking: Chicago meters need to be fed.

- Transit: Pace, Metra and CTA will operate on their regular weekday schedules.

The reason that this jumps out at me is that these federal holidays are often days for families, (and many civil service workers I guess), to take in much of what the City has to offer in the way of museums, cultural institutions, and the like. Why not let them park for free for a couple of hours?

For those that aren't aware of it, the only Chicago Parking Meter Holidays are the following:

  • New Year's Day
  • Memorial Day
  • Independence Day
  • Labor Day
  • Thanksgiving Day
  • Christmas Day
I am keenly aware that, as is the case with many units of government, Chicago is not exactly flush with cash these days. But I don't really think that letting the public park for free on federal holidays ranks up there as one of the leading budget pressures. Let 'em park.

Saturday, January 13, 2007

Through the Grapevine

Just came across this story about the successes of Illinois' wineries, so I thought I would pass it along:
(AP) A new study shows that Illinois' wine industry is ripening by the minute.

The survey by wine industry analysts MKF Research finds that the number of wineries in a state long known for Abe Lincoln, coal and corn has grown more than five-fold in the past 10 years.

The study was released this month by the Illinois Grape Growers and Vintners Association. It shows that Illinois has 68 wineries, and about 10 of them have opened in the past 18 months. Just a decade ago, the state had about a dozen wineries.

Illinois also has 450 grape growers.

The study found that 69 of the state's 102 counties have at least one vineyard, and more than a third of the counties have at least one winery.

About 1,200 acres statewide are devoted to growing grapes, with each acre producing about three tons of fruit. That's up from just 140 acres a decade ago.

The report shows that Illinois' wine industry has a statewide economic impact of $253 million dollars and generates $31 million in wine-related tourism.
Several years ago, many people were skeptical as to the viability of Illinois vineyards, but a story like this one helps remind you of just how diverse our state's economy really is.

From agriculture to technology to manufacturing, we possess one of the strongest cross-sections of economic opportunity of any state in the country. It is essential for the members of the Legislature to recognize this fact, and to put aside regional and partisan differences in order to allow and encourage our full range of economic engines to perform at their fullest.

Friday, January 12, 2007

Primary Colors

The Speaker's proposal, made during his inaugural address, to move Illinois' presidential primary from March 18 to February 5 certainly caught a lot of people, including the Obama campaign, off-guard.

And there is enough speculation as to the motivations of 'He Who Does Nothing Without a Plan', that I am not going to add my own theories to the mix at this point (although I do have some good ones).

I wholeheartedly agree that the present system puts waaay too much emphasis on states that are non-reflective of the country as a whole, while at the same time relegating other significant states to irrelevance when it comes to selecting presidential nominees.

But at the same time, I also am wary of the costs and logistics of having a presidential primary at a different time from the primaries for the rest of the elected offices. It is hard enough to get people to vote as is, and I think that a bifurcated primary would only serve to further depress turnout for 'down ticket' races.

Instead, I'll invite you to think about a plan offered several years ago by the National Association of Secretaries of State which involves rotating regional presidential primaries. The proposal divides the country into four geographic areas (Eastern, Southern, Midwestern and Western) and rotates which region would vote first each March. The other regions would hold their primary elections in April, May, and June. A different part of the country would vote first once in each sixteen year cycle.

Under the plan, traditional early primary/caucus states New Hampshire and Iowa retain early election status so that under-funded and less widely known candidates will still have an opportunity to compete through retail one-on-one politics rather than the costly media-driven campaigns that are required in larger states.

The NASS plan would create four primary regions:

Southern Region

Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, Puerto Rico and the Virgin Islands.

Eastern Region

Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, West Virginia and the District of Columbia.

Midwestern Region

Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

Western Region

Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming and Guam.

Now under this plan, once every 16 years, we would have a primary as late as June, which many good government advocates would like, but does not sit well with many party regulars. Personally, I think that a campaign is a campaign, whether your primary is in February or June. And having less time between a primary election and a general election may in fact provide for a more concentrated campaign.

While I am not sure that the NASS plan is the best idea out there, I do think that is is preferable to our present system.

Wednesday, January 03, 2007

An attack on 'pay to play'

Unfortunately, the number one issue in the recent campaign season were the allegations of pay to play that were being constantly made, rejected, and debated. Likely the number one political issue covered by the media was the same subject.

So I think it fitting that addressing this, and related, issues should be a number one priority of the 95th General Assembly.

To that end, I am the chief sponsor of
House Bill 1, legislation that was an initiative of Comptroller Dan Hynes, which would curtail the underlying actions which give rise to pay to play allegations.

In sum, the bill prohibits those holding contracts over $25,000 from making a political contribution to the officeholder who awarded the contract. The bill further requires, as part of hte procurement process, bidders on state contracts worth more than $10,000 to disclose all campaign contributions for the prior two years to the officeholder awarding the contract. The contribution ban would be in effect for the length of the officeholder's term or for two years past the completion of hte contract, whichever is greater.

We had introduced this bill last session as HB4073 with bipartisan support in both chambers. Myself and Rep. Bill Black were the lead House sponsors. Sens. del Valle and Dillard were the main Senate sponsors. The bill was never released from the Rules Committee.

Our efforts picked up a significant boost today via an editorial from the Chicago Tribune titled 'An attack on 'pay to play'. The Trib support is notable not only for its substance but also in light of the fact that the paper has historically opposed any attempts to limit campaign contributions. But despite this, they rightfully recognize that something needs to be done.
This page dislikes limits on free speech. But enough corruption is enough. Private-sector workers often accept as a condition of employment limits on what they may say. The limits in House Bill 1 would fall on firms as a condition of doing business with the state. Fair enough.
One of my biggest concerns about the charges, and findings, of corruption around Springfield over the last so many years is that they divert so much time and attention away from the issues that we should be focused upon. The Tribune editorial board nicely crystallized the problem like this:
Last fall, thousands of column inches, hours of airtime and miles of campaign trail were consumed by talk of Illinois' corrupt government. That meant those thousands of column inches, hours of airtime and miles of campaign trail were not spent discussing critical state issues: Our public school system produces students unable to compete in a global economy. We've heaped so much long-term debt on taxpayers to pay for lofty programs and public employee benefits, the state risks insolvency. The list goes on.
As I write this post, I have no firm idea of what the future holds for HB1. I do know that it enjoys the support of a broad-based coalition of good government groups, a number of constitutional officers, many legislators, and I would presume the vast majority of Illinoisans. I am hopeful that the words from campaign trails around the state will be translated into results.

In the closing words of the Tribune.

If they're asked to say yea or nay on this bill, legislators who talked the talk about ethics reform in the fall campaign will have to perform a mighty clever tap dance to explain a "no" vote.

The question is, Will House Bill 1 ever be called for a vote? Millions of us will be watching.