Printersrowfest. It is my pleasure to announce the moderator. I cannot think of a more appropriate discussion in 2014 and an Election Year too a conversation with you and the authors of the book fixing illinois politics and policy in the prairie state there is a book coming out i believe on tuesday by Hilary Clinton called hard choices and that might have been a more appropriate title. On my far right is j. Thomas johnson. Tom was appointed president of the Tax Federation of illinois in 2006 and became president in january of last year. He was on the illinois revenue board and was the chairman of the gaming board as well. Tom johnson. [ applause ] to my direct right is james nowlan. Jim was a senior aid to three governors. He is president of stark county communication and they publish Community Newspapers in central illinois. He is vice chair of the Illinois Ethics Commission that oversees the ethics and ethics training of 120,000 state of illinois employees. He was elected to the house of represent in 1968 at the age of 26. Four years later, then governor richard ogle tapped jim to be his running mate as the republican candidate for lieutenant governor. Welcome, please, jim nolan. [ applause ] now, i read this book and encourage you to do so if you care about the future of illinois. Given what these gentlemen do in the book, it is series of recommendations or basically just conversation points. I had tom and jim on my radio show on wgn earlier today called the sunday spin and one of the questions i had was given all of the problems in the state of illinois, their recommendations only total 98. You couldnt get to 100 . And by the end of the show we did get to 100. I want to address, and something i learned from talking to them both, the last chapter of the book is entitled corruption an enduring tradition. And you explained you made it the last chapter of the book for a reason. Yeah, we believe in fact a gallop poll did a poll on trust in government and illinois ranked next to last in terms of Citizens Trust in government. Corresponding to that was also a poll question asked if you could would you move from your state. And illinois ranked first in that regard or last. And they are tied hand in hand. We believe the basic need in fixing illinois is to address our corruption and ethics in Illinois State government and local government as well. And jim had a prospective on that coming from a slight different angle. There is a cost to corruption we found in a survey of Illinois Development executives 2 3rds said the corruption effected somewhat or a great deal efforts to recruit business to come into the state of illinois. So it is a serious problem not only for the perception but in a sense in a reality of recruiting business in the state of illinois. But when you you have almost what i would say is an x ex acceptance of corruption. I wonder if there is an acceptance among people there is always going to be some level of corruption and at least maybe we be we can try to find people with the bar low so tolerance is accepted. I was going to note i teach american politics at the university of illinois, or used it, and each course i would give an exercise to students, most seniors headed for law school, and in this exercise, i said your older brother has been charged with a serious dui. He is in his first year out of college, must have a car to do the job. His wife is at home pregnant with their first child. And the savvy lawyer for the older brother says look, i am confidant i can get this case dismissed if you will provide me 1,000 in cash beyond my fee and the question the older brother asks the younger sibling anonymously is should he go for it or reject the idea. And in 78 courses in which i did the exercise, 2 3rd of the students said go for it. Gives you a sense of what i consider a culture of corruption that too many of us in illinois feel we should take advantage of government because that is what everybody else does. What do we do about this . We know it is an enduring tradition. But what changes that kind of mentality . I think we need a take a bold initiative. We have passed nibbling around the edges ethic reform legislation in illinois but Nothing Specific with strong penalties. If we take on the challenge we want to fix illinois, we have to take bold initiatives. And one of those areas we need to do that in is in the area of ethics and corruption. Legislation that people look at and say wow is what i mean. Did you see what they are doing in illinois . Jim made a point that, you know, it used to be cigarette smoking was standard for young people. Now it is no longer a standard vice. Drinking and driving and so forth was okay. It is no longer acceptable in our culture. Corruption can be no longer acceptable. And ethics lapse can no longerby acceptable. If we create a structure that that is the messening the public demands of their officials maybe we can have the same level of success on this area as we have in cigarette smoking and in driving while intoxicated. So we can do it. We just have to embrace it and say this is what we need to do to address the problems that this state faces. Give the mere suggestion number 99. We have 98 suggestions in this book. We invite people to add another 99. You know, our email are in the book. Just send us a great idea. This was my 99th. Eliminate all public pension for all elected officials in the state of illinois. Not civil severants and career employees but elected officials. Why do i say that . Pensions are a benefit for a professional core of longterm employees and that is what what elected officials are. I am so tired of reading in tth the Chicago Tribune about a public official committed a crime, pled guilty and it took a year half so they drew pension the whole time before sentences. If we eliminated that and gave every public official a 5 raise and said contribute that to your ira you are no longer covered by public pensions. That is not what they were created for. It is for longterm professional employment. Get rid of it. Why have that cloud hanging over public official because 25 have ethical lapses and paint ugly pictures for all of the servants. Jim, you note the history of smoking and drinking and driving and that seems like a generational kind of change. One of the recommendations, jim, in the book is about teaching ethics as part of high school curriculum. We require two years of social science in the high school curriculum. Indiana requires three and i think that is more typical in illinois. I think one should be devoted to civics or American Government at least and that clearly has elements about ethical behavior should be part of that correspondence work. We touched on this earlier today about education and things like that and this really goes to one of the early chapters in the book where you talk about the issue of renalism in illinois. And you have the political differences and most recently in this state the issue of carrying a concealed firearm in public. And the issue of down state illinois, the six counties outside of the chicago area, and truly then in chicago and more urbanized area, the urban areas are more supportive of gun control and down states more supportive of gun rights. And illinois under a court order was able to come up with the law thatoo make illinois the last state in the country that leg legalized the concealed carry of firearms. And you made a comparison of texas. Dont mess with texas. Texas is its own country for anyone who hasnt been there. But in illinois there is diversity. And that has consequences. The suburbs of chicago is looked at as one state and look at down state, lack of growth, declining economy, fewer educational choices and also link that to come neighborhoods in chicago. I think many parts of depleted rural down state illinois have a great deal in common with the struggling neighborhoods in the city of chicago but they dont realize the commonalities they face. You talked about regionalism and how it can be reversed. We have two regions. The metro area and then rest of the state. Maybe the northeastern part of the region has identified itself as a metroplex and one of the great city areas of the world. And the rest of the state lost who they are. What are their goals, dreams and aspirations. How do they tie themselves to chicago . Or will they tie themselves to chicago . We need to edge educate them about the fact their livelihood is dependent on this area. Many of the things produced in illinois are consumed by people in the area. How do we respect different traditi traditions when it comes to regional areas and we need to help the public understand how we are interconnected and the differences and that suggest the great met met metropolitan does a great of planning and put out broader Economic Development studies of the metro area. But illinois as a state is lost in all of that because it is the poor cousin to the metropolitan area. We dont do longterm thinking at the state level. There is no planning unit in the budget or civics units on a statewide bases that think about the problems and issues related to regionalism. We need to do more of that. Or begin to do that. Lets go back and do the overview here. Illinois is a state facing many challenges. If we are not at the Tipping Point we may have tipped over already. Most of those challenges, basically are financial challenges and those kind of affect Economic Issues about the we talked about corruption but the states economy and businesses that might look to come to illinois are looking for a financial certainty and so you have a state with a 100 billion unfunded pension liability. We have a law that is passed but it is being challenged in the court. Lets take that off the table, though. You have, we just saw lawmakers left springfield and passed a 35. 7 billion budget even though there is not revenue there to sustain the budget and there is a budget balance requirement in the constitution. One thing noted in the book is we have a finance structural imbalance in what the state takes in, how it takes it in and what it delivers. How do we fix that mess . We have this longterm planning. How do we tell the people how we will take care of the pension problem . How do we tell businesses looking to invest in the state this problem is going to be managed . On the revenue side of the fiscal challenges, our tax structu structure depends on narrowbase taxes in the area of sales tax which is the primary revenue of state government. We tax goods at very high rates and we dont tax services at all. In the income tax area, we dont tax retirement income. We give a big property tax credit. Both of them grow faster than the income tax base. So what we structured in illinois from a tax perspective is what i call an anemic tax structure. It doesnt grow with the economy and slower to growth. And we have to knowledge that we need fix that. And in our book we proposed various ways to do that. Broadening the base of our tax structure. Lowering the rates and with that broad n based we will get more Revenue Growth than in the current structure. We need to have have long term vision of our fiscal challenges and how we will address them. If we do that, we will gain the confidence that we have a longterm plan and we build the faith in the ability to manage the fiscal challenges. And you note fax fairness. We have the effort it will be an advisory referendum about a millionaires tax. And we had talk about a graduated tax. Even the sales tax has a fairness question there. Absolutely. Me perspective is get the tax base first before you decide the rate structure you put on top of it. We dont tax retirement income. The federal does. But we tax unemployment compensation. What the policy rational for that . The Fastest Growing potential income in this country is retirement and if you exclude that the base grows slowly. Politically the rational is seniors dont like paying taxes. I am a senior. I paid them all of my life and i have an obligation to pay them. We need to get the base right. And when we do i think the tax system will be fair moreso than a graduated tax rate on a base that is the wrong tax base. In proposing these, you are not proposing them as revenue n increases . No goodness no. We think we met our maximum tax burden in this state. Broaden basis produces lower tax rate. We need to lower the tax rate and expand the base so it is more responsive and grow with the economy rather than slower than the economy. Lets talk about the spending side, jim. What solid steps you talk about medicaid spending and there is one of those parts of structural imbalance, even though the state gets a match from the federal government, but the inflationary increases in Health Care Spending we will see what the Affordable Care act does to that in the future but that helped drive this kind of exponential growth in the state. I think the biggest challenge in the book is medicaid spending and how to bring the rate of increase for medicaid spending closer to that to the rate of inflation or growth in the revenue system. We make several proposals that might not stand the test of the waver process in the federal government, but one is from the very conservative Illinois Policy Institute which has suggested that if we put most of the medicaid enrollees on private system basically a voucher system . It might be less expensive than the fee for service we have now. Another area in which i think the state of illinois shouldnt be more aggressive is that of the rate of reimbursement to the state of illinois which is the lowest rate among of them and that is 50 federal match to 50 state spending. Several states around us have lower rates of unemployment than we do but are reimbursed at 63 rather than the 50 we are reimbursed at. If it was 57 by the federal government, we would save about a billion in state revenue we could apply to other purposes. So i think the illinois delegati delegation, the congress, should work on this with other members of congress because several states like illinois are being shorted. One thing that every politician says is education is my top priority. The illinois constitution says the state shall have the primary obligation for funding public schools. We know as a result of the Supreme Court decision that that was a goal and not a fact. We increasingly see the property tax burden going up as a support mechanisms for public schools. We talk about tax reform and then you look at a property tax which is basically based on an 18th century model of wealth. What do we to do reduce spending, make a equitable, and try not to make it the quality of your school depends on your zip code in the state of illinois. Lots of ideas. Florida has 150 School Districts. Virginia has about the same number. Indiana basically the School District is the size of a county. We have 893 School Districts in the state of illinois. Many of them are poor. Many of them are very wealthy. The wealthy do not want to share with the poor. They can tax themselves because they often have a high commercial and Industrial Base and they can produce far in access of the revenue flow of each student. We need to look at how we fund k12 education not only from the state level but the local tax resources as well. We also suggest that in order to get a better product out of our k12 education system, we need to lengthen the school here. And somebody asked the question where are you going to get the money for that and my First Response was reallocate resources. I sounded like a politician and she said that is always the answer you get. Further in the book we said maybe we should look at how we Fund Higher Education and we should eliminate the appropriate funds to universities. A voucher of Higher Education in the state of illinois . I dont think we agree on this totally. I see transferring it to a voucher as you are saying. So as to make Higher Education, which is in great turmoil right now, and make it more of a market in which the students march to the institutions thank you will provide them the best value and outcome. Does anybody do that now . In some states, the public universities, i think pennsylvania is one of them that has very little direct appropriates from the institution. But the dollars follow the needbased students. We do that now with the illinois financial assistant program. We do direct appropriates for public university. How many students do you have in the classroom is asked but in the four year programs we dont ask that. We think more accountability occur when the dollars follow the students rather than direct appropriates to the school. Does that change the mission of some of these public universities in trying to cater to a more freemarket based approach . It undoubtedally would. But we saying the goal is to educate the students and the dollars follow the students. We think that is more appropriate of a measure given the tight resources we have that could produce greater accountability. When dollars follow the students accountability occurs. I want to go back to elementary and secondary education. You talk about consolidating elementary School Districts into the overlay of high School Districts that exist. Doesnt that go back to the regionalism issue in that con l consolidation has been talked about as a way to make more efficient use of but you have towns that first lose the post office and now you write in the book about the School District near you that was consolidated. Schools are like the last identity of these towns. There is efficiency but you lose your identity in the process. Many of the School Districts or grade School Districts underlying high School Districts are in the suburbs. So is that more of a turf issue in the suburbs . It is an issue of here is what we have and we like it the way it is and we dont want to change. So there is no motivation for efficiency . We need to do a better job educating the public as to the option. I agree with you, rick, that often community, especially a community shrinking in size the only last identity is their School System but what is that School System producing . Do the students coming out are they able to compete to get into the best colleges or the best opportunity that people coming from larger School Districts have . We have to think about that. The next generation. The future. That is what this book is about. Fixing illinois for the future. And we need to take bold steps. They maybe tough. But in order to say to the world that illinois is really dramatically addressing some of our challenges so that the public regains confidences and we regain confidence in ourselves and the world gains confidence in us as well. Some of these things are tough. But if the ultimate outcome is positive, better Education Opportunities for people in shrinking areas, they ought to suck it up and swallow the will. As bitter as it maybe. As bitter as it may be. When we look at illinois and its strength, the transportation front is one major one. We are the crossroads of the country and a choke point in some respects which it comes to issues like moving freight from coast to coast. But nevertheless, we have Ohare Airport and the interstate highways that converge here but they are crumbling. The infrastructure is crumbling. Chicago metropolitan area is dependents on mass transit and the Chicago Transit Authority needs are huge. What do we do about that . We will have to make more investment in the infrastruct e infrastructure. The highway system is 50 years old and that is the standard length of the system. So we must do more than repave we must begin to rebuild them. We will have to invest more and that is a problem for us in illinois because we have a high motor fuel tax rate when you consider the home rule rates plus the sales tax that is put on top of the basic state motor fuel tax rate. Which i believe are we the only state that does that kind of tax on a tax . Or one of the few . There is only five i think that have the motor and sales tax. The sales is for general purpose rather than investment in the infrastructure. We will have to look as the agency on planning talks about pricing on the expressway, more tolling and probably an increase on the motor tax because we have to face up to the investment needs we have in not just highways but mass transit. And one thing you note in the book and this is something states across the country are dealing with is fuel economy standards, cars are getting more bang that goes into the gas tang so had efficiency of the motor tax itself isnt what it used to be. It isnt keeping pace for those kind of needs. When you look at what other states are looking is perhaps a fee more miles travelled. A user fee. That is the orther thing. We need to look at our tran Transportation System as one thf big assets. Texas and alaska look at oil to do such. Transportation is ours and part of that is because we are in the middle of the country. You almost have to go through illinois. It creates a lot of jobs; that Transportation System. So we have to say this is the best asset when it comes to moving commerce and people through the state who buy goods and services along the way. We need to think about it in those terms so we bless the opportunity to put more investment in that and keep it current so that we are able to reap the benefits of the a thriving Transportation System in the state. And you mentioned areas that do a shipping tax. Absolutely. And those should be investigated. Are they a fair system to support maintaining that asset . We think there are some. It is boom and bust system now. Every 68 years we come up with a capital plan, fund it squen the eight years later we do it again. We are coming to the closing minutes of this session so if iowa a question i would encourage you to come up. You ha encourage you to come up. Im not hearing about gubernatorial stuff in the debates that you talk about. We are coming up on the 200 Year Anniversary of our state. In 2018. We hope it will steer the public debate to asking those seeking Political Leadership what are you going to do to fix our state so that the in the year 2018 we are not continuing to apologize for failures but we have things to celebrate our successesses we hope that is what is going to happen. We hope the debate is over what are you ideas to fix illinois so in four years we are celebrating successess rather than continuing to explain our failures or being the butt of the late night shows. The last primary had a 12 turnout. Vot voter appathy is great in this state. Your ideas are great but they will never get anywhere with 25 turnout or lower. They were very low. Partly offset by the facts that major democratic races were not contested. Even the general election, what are the turnouts . They turn out to be higher because you have independents. And one answer, and i never thought of this in the past, is open primaries in illinois. While their primaries a Party Functions and parties use them to create membership rosters i am told that is the old days. You dont have to do that. People know how to target voters easily these days. I hope one of the answers is that we really focus attention on the 2018 celebration of 200 years of our state and that every media when the politician comes in says what are we going to be celebrating four years from now . I am coming to your house in four years. I want to come over for the celebrati celebration. If we can get the theme going maybe we can increase the Public Participation in the government by focusing on successes in the future. We have a touch point. 2018. Where are we going to be . What are we going to be celebratin celebrating . And how will you get us there . Or what is left . We are thinking positive. We are optimist and we insist those who seek office talk about the future not about the failures of the past. We had them. I am tired of talking about them. I want to talk about success. I think sameday registration was pased. It is Pilot Program for this year and i will have a story on this in the tribune in the next couple days. You will be able to register, and signup to vote at a concern spot in every county. It will be an interesting test of the county clerks and Election Authority in the state. My name is john. My question is how come i never hear about the fact as documented by the bureau of labor that the average wage paid to government is 40 higher than the public sector. That is a good statistic. It is a reversal of a generation ago. And the reason for that is the Service Sector is a much larger part of your Employment Base than it was a generation or two ago and the Service Sector isnt paid as well as the producer sector. The other thing is Public Employment compensation as risen dramatically compared to the general population. More teachers with higher degrees, more degrees equals higher compensation. You are right. When questioned they acknowledge public is 40 higher than private but the Public Employee is also on average much more educated in todays world. I think if you will break it out you would find lower skilled governmentm employees or lower skilled persons in the private sector whereasin the higher skilled level the Government Employees tend to do ll