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budget

Happy Taxiversary!

The Fourth of July week marked the one-year anniversary of the day politicians ended the budget impasse with a permanent 32 percent income tax increase. And we’re no better off than we were last year. In fact, our economy is worse, the job market is weaker, and our credit rating hasn’t improved at all.  Pat Hughes says we shouldn't be celebrating in this week's Two Minute Warning.

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IL's 7,000 Governments: Ripe With Corruption

With more units of government than any other state in the country, opportunity for corruption and waste is aplenty in Illinois. In at least one suburban Chicago township, some spending is downright illegal. On this edition of Illinois Rising, Joe Kaiser and Mark Cavers hear from DuPage Township Trustee Alyssia Benford on how she's shining a light on illegal expenditures in her township. Kaiser and Cavers also discuss how other areas of the state – namely Lake County – might duplicate Cook County's corrupt system for property tax appeals. And how is Illinois doing a year after lawmakers passed a massive, 32 percent income tax hike? The data is in, and it's not looking so great.

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Is Madigan Now In Survival Mode?

Yet another one of House Speaker Mike Madigan's closest allies has been accused of sexual harassment, and it's getting harder and harder to ignore the leading Democrat's complacency on the issue. Will lawmakers call on his resignation? On this installment of Illinois Rising, Dan Proft and Joe Kaiser discuss the new allegations and get analysis on the issue from state Rep. Jeanne Ives, R-Wheaton, one of the leaders fighting to clean up Springfield. Proft and Kaiser also get analysis from state Rep. David McSweeney, R-Barrington Hills, on why Republicans continue to capitulate on key issues, including most recently, the budget.

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Over 3 Million Workers Receive Bonuses And Raises After Tax Cuts

Was Rand Paul correct in saying that neither of the parties care about the national debt? Was raising the spending caps a capitulation on principle for the Republicans? How are the Trump tax reform “crumbs” benefitting small businesses and middle-income families? President of Americans for Tax Reform, Grover Norquist joins Dan and Amy to discuss.

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Filling Or Draining The Swamp?

In the new budget deal, did the Republicans take full advantage of the leverage Trump had won over the Democrats on the previous government shutdown? Trump didn’t campaign on being a budget hawk, but how does the expansion of the federal budget help drain the swamp? Is it becoming increasingly clear that the serial collusion was the FBI and DOJ protecting President Obama? Senior Editor for HotAir.com and columnist for The Week, Ed Morrissey joins Dan and Amy to discuss. 

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Springfield's Balanced Budget Failure

The legislative session in Springfield ended May 31 without lawmakers producing a balanced budget yet again. On this edition of Illinois Rising, Dan Proft and Pat Hughes get the inside scoop on what happened (or didn't happen) inside the chamber from state Rep. Jeanne Ives, R-Wheaton, and ask her what taxpayers should expect from Springfield going forward. One bill lawmakers did pass was a minimum wage hike to $15 per hour. Economist Walter Williams joins the show to discuss how that minimum wage increase will end up hurting Illinois' most disadvantaged, especially people of color.

Proft and Hughes also discuss the revelations that J.B. Pritzker, the Democratic frontrunner for governor in 2018, once lobbied former Gov. Rod Blagojevich for a political appointment.

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Any Budget Madigan Would Pass Would Be Impossible For Rauner To Sign

State Rep. Jeanne Ives (R-Wheaton) joined Dan & Amy to discuss what the lack of a balanced state budget means for Illinois. How did we run up a quarter of a trillion dollars in debt? How do we have the worst funded pension systems in the nation? And what did the General Assembly pass with regard to school funding?

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Lawmakers' Mad Dash To Pass A Budget

With Spring legislative session ending, Springfield lawmakers are in a hurry to pass a budget – regardless of what's in it or how it affects taxpayers. On this edition of Illinois Rising, Pat Hughes and Illinois Policy writer Joe Kaiser talk to Wirepoints.com founder Mark Glennon about what to expect from the General Assembly in the next few days. They also talk to Manhattan Institute Senior Fellow Dan DiSalvo about how pension costs are making higher education unaffordable for students and families.

And they discuss how two Democratic frontrunners for governor – J.B. Pritzker and Chris Kennedy – are cheating the property tax system in Illinois.

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Illinois' Financial Grade: F

Why is Illinois' financial grade an F? Are the bond agencies taking too rosy a view of our finances? How does Illinois have $200 billion in debt with a balanced budget requirement in the Constitution? What does this mean for the 2018 gubernatorial election? Sheila Weinberg, Founder & CEO of Truth in Accounting, offers the facts on Illinois' finances to Dan and Kristen McQueary, Chicago Tribune editorial board member, who sits in for Amy Jacobson.

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A Northern IL Barber's Fight Against Wasteful Government

With a backlog of bills and tax hike proposals at the state level – and nearly 7,000 taxing bodies in the state at the local level – Illinois taxpayers are hit from all over. On this edition of Illinois Rising, Dan Proft and Pat Hughes talk to Mark Glennon of Wirepoints.com about which proposals currently in Springfield actually help taxpayers, and which ones hurt. At the local level, they talk to a newly-elected McHenry Township trustee whose goal is to consolidate or eliminate the township entirely – savings taxpayers' money.

They also discuss the state's ongoing impasse with its largest government-worker union, AFSCME, and how a potential U.S. Supreme Court case could relieve fair share payers of the union's political stranglehold. And Proft and Hughes break down wasteful spending in higher education in the state.

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Dan Proft & John Tillman Discuss Chicago's Ban On Smokeless Tobacco At Ballgames

On this edition of “Illinois Rising”, Dan Proft and John Tillman, CEO of the Illinois Policy Institute, discuss Chicago’s recent ban on smokeless tobacco at baseball games, the Governors budget strategy, why big city school systems are going broke and the Presidential race - why is Kasich still in?

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Dan Proft & Pat Hughes Discuss Illinois' Primary Election Winners & Losers

On this edition of “Illinois Rising”, Dan Proft and Pat Hughes, Co-Founder of The Illinois Opportunity Project, discuss Illinois’ Primary Election winners & losers, the large voter turnout, the Governors budget strategy, the surge in gas prices and more.

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Dan Proft & Lauren Cohn

Governor Rauner delivered his Budget Address to a state with no budget. Gallup finds that not only is Illinois losing one resident every five minutes, but nearly half the people still in the state want to leave. Illinois’ budget impasse has left a lot of people suffering, but state legislators, who have secured funding for their own salaries, are not among them. Lauren Cohn, a former reporter in both Philadelphia and Chicago, shares her impressions of Mayor Emanuel’s decision to hire Charles Ramsey, retired Philadelphia Police Department commissioner, to advise the embattled Chicago Police Department on civil rights issues. It’s baaaack: Even though SB 1229, which would have stripped Gov. Rauner of his negotiating ability with AFSCME, failed in September, Democrats are proposing identical legislation again.

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Rauschenberger: Only 20% of State Legislators Vote to Support IL Manufacturing

On this edition of Against The Current (ATC), Dan Proft sits down with former State Senator and current President and CEO of the Technology and Manufacturing Association (TMAIllinois.org) Steve Rauschenberger. With Governor Rauner set to give his 2016 State Budget Address, Rauschenberger, an Elgin Republican, widely recognized as the preeminent state budget expert during his 15 years in the General Assembly, discusses the future for small to midsize manufacturers in Illinois if they're going to have one, the seismic changes to state government required to balance the books, and how the future of the Illinois Republican Party is woven into both.

Rauschenberger offers a tour de force on 21st century jobs, state government and IL politics in this most informative installment of ATC.

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Dan Proft: Thank you for joining us on another edition of Against The Current. Coming to you from The Sky-Line Club at the top of the Old Republic building in downtown Chicago as per usual. And we're happy to have our guest here this episode, Former State Senator Steve Rauschenberger, Republican from Elgin. Served 15 years... Steve Rauschenberger: 15 years. Dan Proft: ...in the General Assembly. 15 glorious years in the General Assembly. Steve Rauschenberger: 1992 to 2007. Dan Proft: Well, what? 10 years in the glorious majority and four years... Steve Rauschenberger: In misery. Dan Proft: Yeah, right. Now, the President and CEO of the Technology and Manufacturing Association rebranded and represented the old Tooling and Manufacturing Association. But essentially, your charge is a small to mid-size manufactures in Illinois. Steve Rauschenberger: Yes. TMA is a 90-year-old association. Started by six kind of forward-looking small manufacturers who realized nobody was going to train their workforce for tomorrow unless they got together and did it. The argument that training together raises all boats. So TMA has always had a focus on training. We have a full Apprenticeship Program–we graduate apprentices and CNC which is Computer Numerically Controlled manufacturing. Also, tool on die making and also mold-making. The last batch where we do hands-on training. Dan Proft: So it seems to me manufacturing is very much like social services in the state of Illinois which is that everybody's for it and nobody acts in furtherance of it. So–you're right. Everybody is for Social Service, the Provision of Social Services to vulnerable populations and yet, we're one of the worst states in the nation providing the funding and support for those service providers. And everybody in the General Assembly is for manufacturing because we need good manufacturing jobs, this is a manufacturing hub–and you, the TMA, recently released a scorecard of all the members, all 177 members of the General Assembly. And according to the issues that you put on your scorecard, what percentage of state legislators come out with grades that suggest they're actually acting in further in some small to mid-sized manufacturers in Illinois? Steve Rauschenberger: 1 in 5, maybe– Dan Proft: 20%. Steve Rauschenberger: Maybe 20%, 25%. Yeah. Dan Proft: I mean, it's kind of staggering, isn't it? Because–not just because of the rederick that's offered up in support of those small to mid-sized manufacturers. Throughout the state, it's not just in Chicago– [cross-talk 00:02:36] Dan Proft: Right. We're all for good stuff. But what is it that prevents the General Assembly, a body you served on for 15 years as we just mentioned, from doing things in furtherance of the sector, they say, they're supportive of. Steve Rauschenberger: I would guess–I would say it's a matter of a lack of vision and a lack of understanding. When I was down in Springfield, I served 15 years. You saw these little bills come through–there was just one introduced last week which would require employers to notify an employee two weeks in advance and then he changed in a shift. They just said, "You're going to make law about how people are going to reassign shifts in manufacture or any other job in the state of Illinois?" I mean, this idea somehow that little increments don't really affect the whole environment is a big part of the problem. Dan Proft: So you're saying you don't think that state legislators in Springfield can do a better job of running a plastic injection molding plant in Elgin than plastic molding–again, injection management? Steve Rauschenberger: No. I guess I– Dan Proft: I don't think they can't do as good a job. Yeah. It's shocking. Steve Rauschenberger: It's pretty frightening. And the sad part is just incrementally, these guys and ladies pass things that don't make any sense in the long run. Whether you're talking to plastic bag ban in Chicago all the way through the kind of goofy stuff that passes down there. We're not going to get any better here until they get out of the business of micromanaging relationships that people have in their every day life. Dan Proft: Well, so how do you manage? Who's supportive and who isn't? Give me some of the issues that are making Illinois particular unfriendly for those small to mid-sized manufacturers to be here and resulting in businesses leaving or to the extent they expand, they expand elsewhere. And we see that, frankly, not just with small to mid-sized manufacturers, but also with the big boys. Caterpillar closing facilities and ADM divesting from Illinois to other Midwestern states. Steve Rauschenberger: State farm, it's not just manufacturing. Dan Proft: Yeah. Well, sure. Steve Rauschenberger: Big Illinois companies are choosing not to increase workforce here. I mean, we look at things that are employment relationships. In other words–are they passing mandates requiring employers to do things in this state that they don't have to do in other states? We look at things that relate to– [cross-talk 00:04:49] Dan Proft: Give me an example of that. What does a manufacture have to do here–CNC Manufacturing have to do here that they don't have to do in Indiana or Wisconsin or. . . Steve Rauschenberger: Well, just like the requirements for separate expression rooms for pregnant employees. Now, I don't know any employer that doesn't try to make arrangements for pregnant employees particularly when they're expressing milk and they have babies. But the idea that you're going to regulate from Springfield with the one-size-fits-all requirement that there'd be a special room and dictate the size of the room and what's going to be in the room is very unusual. I mean, three or four states in the nation have requirements for rooms to express your milk. I mean, you just–but–nobody–what they would tell you in Springfield, I don't want to vote against that. I mean, so– Dan Proft: I don't want to be anti-woman. Steve Rauschenberger: That's right. We've got this big herd of people that are all worried about the next male piece instead of about what they're doing to the state of Illinois as we slowly circle the drain. We got bad debt in the state of Illinois, we haven’t had a balanced budget in 7 or 8 years, we have no budget at all in the last 14 months or so. We're worse than the nation in dealing with handicapped and mentally ill people in the state of Illinois. Our schools are just run as if nobody was paying attention. Our colleges have some of the highest costs in the nation–so just what is it that they're doing well down in Springfield? Dan Proft: And so what are some of the things, maybe, that Gov. Rauner has proposed? Maybe that some other individual one-off legislators? Some of the legislators in the 20% have proposed that would manifestly improve the business climate in Illinois, again, for that wealth creating sector that we all talk about, manufacturing. [cross-talk 00:06:35] Steve Rauschenberger: Well, at least somebody's talking finally about getting Illinois to average. What Rauner talked about was, "Let's just get our workmen a compensation cost to the average of the nation instead of being the third highest. Let's get our unemployment cost down into the average. Down from 4th or 5th in the–" Those aren’t long-term solutions because you're not going to grow from those. But maybe you can stop some of the bleeding, and suddenly the agenda in Springfield is more–how do we help people find jobs, how do we retain middle class opportunity in this state. But I mean, that's not what they're talking about in Springfield, unfortunately. And as much as Rauner, I think, has offered compromises and suggestions that we can be flexible and how we head in these directions, there's just this decision on the part of Democratic leadership–Mike Madigan the emperor of Illinois, that no step at all–we're going nowhere. I mean, I've got my campaign contributors, I've got my political infrastructure, and we don't need to change anything. Dan Proft: Is it because the small to mid-sized manufacturers don't have the political cloud to impose punishment for those that don't act in support of that industry? Steve Rauschenberger: I think that's part. But the other part is that so many people trust government or they assume, for the most part, government works for their best interest or believe there's nothing they can do about it. Some combination of those things. Dan Proft: Right. Steve Rauschenberger: It takes a long time to foment a revolution in the United States. But I mean, I think we're close in the state of Illinois. I just think–people are worried they're going to change in the next few years or people are leaving in droves. Dan Proft: Let's just still down some of these issues. Because you hear politicians talk about some of these things–from the governor on down workers' comp system that needs to be reformed so we're not hanging the third-highest workers' comp cost in the nation as you just said. But specifically, well, why is that the case in Illinois? What's different about the workers' comp system here as compared to other states? Why is it so much more expensive? Steve Rauschenberger: Well, it's the agreed bill process. I mean, if you want to get into the nitty-gritty, it's the fact that there'd been a requirement for 20 years in Illinois that organized labor sits at the table with the business interest and they hammer out a deal. So that means you get Caterpillar and John Deere and Ford Motor Company across the table from the unions. And the unions, of course, are well-advised by the trial bar, the bar that focuses on workman's compensation. So this is not about the ideal. This is not about injured workers getting the treatment they need. This is about the various interest cutting the best deal they can. I mean, we're not going to get anywhere with an agreed build process. We are to be looking at who has injured workers that get back to work, without bankruptcy, where the families are taken care of, and where things turn out right? We got to be copying those systems instead of incrementally tinkering with the solyndra. I mean, we're taking a bad model and playing around at the edges. Now I realize the governor has no choice but to kind of live in the environment he's in, but what's missing is this horizon vision by the legislators. Let's go look at what states do work comp right. Where are injured workers being taken care of? Dan Proft: Give me an example of that and what that regime is. Steve Rauschenberger: Well, Florida, I think, does a much better job. Florida has a no-fault, I think, where comp system were essentially–if you're injured, you go get treated. Okay? And then afterwards, the major medical and the work comp insurance companies fight out whether it was an on-the-job injury or off-the-job injury. So in their system, every broken ankle is the same. One broken ankle doesn't occasion a quick trip in MRI, a casting, three weeks off work and go back at work on a walking cast which should be major medical. Where the other side would be–the insurance company refuses to pay, the attorney refuses to settle, they go a 27-weeks, it goes to hearing–I mean, the number of bankruptcies coming out of our workman's compensation which essentially benefit the attorneys in the work comp system, not the injured workers. I mean, we have more permanent partial disability come out of the state of Illinois than almost any other state in the country. Dan Proft: Is this where we get the kind of coffee on your lap kind of cases? I mean I've talked to social services provider, $600,000 sprained ankle. Steve Rauschenberger: Yeah. Dan Proft: And so now, just forget the manufacturer. It was like, social service sector where they are not-for-profit, they've got limited budget. You know, $600,000 for their workman's comp cost per sprained ankle because of this rigmarole you're describing. I mean, it effectively puts them on a business, too. Steve Rauschenberger: Yeah. It is much less expensive for everybody to pay for the right medical treatment for an injured worker whether you're injured playing softball on Saturday with a broken ankle or on Tuesday, running your CNC machine–the treatment ought to be the same. The cost of the treatment ought to be the same, but that's not true. Under workman's compensation, hospitals are allowed often to charge usual on customer. Okay. They do lots of–three, four doctors end up on the case, in a workman's comp case. Where in the case of a broken ankle at a softball game, generally, it's the treating physician who determines the case. Dan Proft: So what you're saying is, because I hear this a lot, too, is, well, kind of the while designation of whether the job–whether the injury, I should say, occurred on-the-job or off-the-job, you're saying. Yeah, that's a legitimate issue, but it's not the centerpiece of what's driving cost. It's how–whether you're injured in the softball game or injured operating a machine how it's treated differently. Steve Rauschenberger: Well, look at auto-insurance. You and I, we have a fender-bender. We both go to our insurance companies, As they file with each other, you and I go get our cars fixed. Then state farm meets with all state or whoever our companies are once a month and they reconcile the claims. Okay? We don't have to shut down, get attorneys, go to hearings, and wait 52, 75 weeks for a settlement. I mean, and our cars don't stay broken. Dan Proft: And during that entire time, the worker's off the job. Steve Rauschenberger: Yes. It benefits attorneys when there's not a settlement because the size of the settlement--they work for a percentage of the settlement. So there's this perverse incentives in the system which mean the attorneys operating for the injured workers are not square-up, and there's perverse incentives for the insurance companies as well not to settle. Dan Proft: So you're telling me that those lawyers that advertise on TV that do workers' comp cases on volume, they are being less than forthright? Is that right? Steve Rauschenberger: I think they're being forthright for a perverse system. They're just like Mike Madigan. Mike Madigan is not a felon. I mean, he might be if he didn't make the laws, but since he makes the laws, they're very–but I mean, to say that they're moral, whether Mike Madigan or the work comp attorneys that they're interested in the best interest of the workers, it's wrong. So to put them in a room with 3 or 4 , 5 big businesses only trying to make incremental progress and call that work comp reform is the wrong approach. And we've done it for 20 years. Dan Proft: And on the other side, people don't want to be demigod, not just kind of the room for pregnant women, example, but also, it's the same kind of game. Well, you don't want injured workers to be compensated while they're injured, and be able to provide for their family, and you don't want injured workers to be given the proper medical care–it's the kind of demigod issue. That way, it puts people back in their hind legs. Steve Rauschenberger: Yeah, exactly. So nobody wants to be the guy that stands up or the person that stands up. And I'll tell you that the unions are very active in Springfield. Any Democrat or anybody with union influence in their district– Dan Proft: Or Republican. Steve Rauschenberger: Yeah. Yeah, Republican or Democrat that crosses as ASFCME or SEIU or–those guys, I mean, they're merciless. Dan Proft: And so–okay, so there's worker's comp. Another area that's cost-driver for manufacturing that is markedly different in Illinois as compared to other states, it just kind of is again, perverse incentives, like you're describing for work comp. Steve Rauschenberger: Well, the worst one of all is probably the classification property tax system in Cook County. To think that manufacture–who's going to use less police, less fire, doesn't use the school system requires very little in services pays a 25% to 40% penalty on their property tax in Cook County is a crime. I mean, this is driving jobs out of Cook County. So when it's time to move when you outgrow your facility or you need to downsize your facility, people look at [inaudible], or worse, they look at Indiana or Wisconsin to move their operation. Steve Rauschenberger: I mean, we've always been a strong manufacturing area. We've got great people, we've got great workers, we've got great a reasonable infrastructure still although it's kind of crumbling around their ears. But I mean, to lose these because we have bad public policy occasion by the first Mayor Daley's desire to buy votes with low property taxes. I mean, they thought, in 1970, when they passed the constitution on a lot of classification in Cook Country, they thought their industrial base couldn't leave. Okay? And really, they couldn’t over the next 10 years. But TMA used to have over half of its membership inside the city of Chicago and another 35% of it in Cook County. Today, over 55% of TMA's membership is outside of Cook County. Dan Proft: Is this one of the reasons why South Cook County, for example, is like a demilitarized zone? Steve Rauschenberger: Yes. You got bad tax policy combined with bad policing and corrupt politics–why would anybody make a 20-year investment in those areas? Dan Proft: When you could skip over to northwest Indiana. Steve Rauschenberger: Yeah. Or safe and dependable DuPage or Kane or McHenry or–I mean, counties where there’s still at least a political process left. Dan Proft: And the irony, of course, is in South Cook County. Most of those communities, you get into the south suburbs. Most of those communities are majority-minority communities. Steve Rauschenberger: Yes. Dan Proft: Who gets hurt the most? It's African-Americans and Latinos that live in places like Phoenix and Posen and Alsip and Blue Island, Harvey. Steve Rauschenberger: Yeah. And they're stuck. I can't blame my members, I don't know why anybody would risk the kind of political and financial risk that it would take to locate in southern Cook County. Everybody that I know that's looking and does not look in Cook County. Dan Proft: So what does changing that property tax class system classification look like because I, as a Chicago denizen, I like being subsidized by the business community so I pay a lot of property taxes. I pay high enough property taxes as it is. So, I like them as somebody else paying the fray. I'm just another rent-seeking like everyone else. Steve Rauschenberger: Everybody in the state of Illinois pays too much property taxes. I used to sit next to [inaudible 00:17:10]. She had a house– Dan Proft: From Quincy. Steve Rauschenberger: In Quincy, right. She had a house in Quincy. She showed me pictures once. That house would have paid maybe $7,000/year property taxes in Kane County, and at my recollection is she was paying $1,500 or $1,800 and was astounded her property taxes were high. I mean, everybody's taxes are high even if you don't compare them to somebody else's. What they have to do, I think, in Cook County, is we got to freeze the levy and commercial and industrial property, okay, and over the next 10 years, let residential catch up. Okay? And that means controlling the expenditures and asking Cook County to cut back on patronage. Dan Proft: But the problem is how tough to sell that is because you have people–communities in south Cook for example, but not just south Cook–think Rockford–these places where manufacturing has left where they're paying for their home, not 2 times because of their mortgage and the interest of the mortgage, but 2 ½ to 3 times because of the property taxes. So now you're saying–and you got to level up the residential over the next 10 years or 15 years or 20 years so that you can pay for it four times. Steve Rauschenberger: And you can't do it without going after the corruption in local government in parts of Cook County. I mean, it's really nice to pretend the local government's not a problem in the state of Illinois. The community colleges are nothing but really true blue mission-oriented organizations. But it's simply not true. We pay too high a property taxes in general in the state of Illinois. But in particular, manufacturing does. But I mean, it's okay. We can continue the current tax policies and just watch the productivity and those employment-based leave. And none of these is going to be easy. I've talked into a social service director from my Elgin, my old district. She wants to believe somehow that there's just one more negotiation and it's all going to be okay. And I said, "Karen," I said, "you don't realize. This is Detroit." I mean, there's no fix for this. I mean, you raised the income tax back to–I don't know, 5%, 6%, 7%. It's not enough to fix the problems in the state of Illinois. Dan Proft: Well, I mean, Karen Lewis and others suggest the problem is the flat income tax. It needs to be graduated. Maybe throw on a LaSalle Street tax on financial transactions. . . Steve Rauschenberger: Let's move the exchanges out. I mean, let's get rid of those. Dan Proft: Yeah. Steve Rauschenberger: There's no sense having that productivity in downtown. Dan Proft: And burden. And all the insurance companies and financial services companies along with them, let's get them out of here. Steve Rauschenberger: Yeah. I mean, let's make sure we close the door in any opportunity. I mean, it is a pattern. Watch–you look what Detroit did as it drove population out. Now Illinois, following Michigan, I think, are the only two states in the nation that have lost population since the last census. Dan Proft: But here's the rub: everybody gets mailers in their mailboxes come election time to say their state representative held a line on property taxes. They support a property tax caps, they froze property taxes, now, your property taxes keep going up, but I got my legislator, my state rep and my state senator saying they froze property taxes, they supported the caps, and so they're providing property tax relief. Steve Rauschenberger: I just wish people would look at those mailers the same way they look at the ones for hearing aids, the same way they look at the ones for the stoves made somewhere in Amish country that heat your house without cost–I mean, we all get mail offers and emails that tell us, "Oh, click on here. You happen to win the U.K. lottery." But we don't believe them all. People ought to just look out and take a look at what's happening in their community and vote what they see instead of– Dan Proft: And more like the e-mail you get from the Nigerian prince. And it's got $20,000,000 you need to hold for him and he's going to cut you in on that. I mean, that's kind of what it is. Steve Rauschenberger: Yeah, it is. I mean, we do these mailers–Ken Dunkin goes from being the darling of Mike Madigan to suddenly, he's a felon who's threatening to–I mean, now that's 20 years ago. But I mean, when does a credibility piece kick in where it's like, "I don't believe anything that people put in a mailbox in four colors." I mean, that's what I'm waiting for. Dan Proft: Well, so on property tax caps. Because there has been tax property capital legislation and property tax caps imposed. So why aren't property tax caps property tax caps? Steve Rauschenberger: Because they're built just like our campaign finance law with so many back doors that they don't mean anything. They don't hold the line on anything. The fundamental problem with our property tax or the units of government that are spending it–72% to 75% of everybody's property tax is going to their k-12 school system. I mean, shouldn't we start asking for some accountability? Dan Proft: Yeah, yeah. Steve Rauschenberger: Okay? The numbers back when I was in office were we spend more GNP k-12 than any other country in the world except for Finland or Sweden. We spent twice as much, general–gross national product on k-12 as countries like Japan. Now, there's differences between Japan. It's a homogenous society but racially, they're all the same. There's a lot of differences but we can still I think ask to hold k-12 accountable. Our k-12 system in the state of Illinois, I think, is one of the least accountable systems. We have over 890 school districts administering the students, nobody knows who's making decisions or how, we have professionals paid to work 177-day school years. Our school year is 10 to 15 days shorter than any other developed country in the world. I mean, why? Do the kids need to know less today in the United States then they did…? We have shorter school day of any of the top 20 industrialized nations in the world. Dan Proft: And you're fond to say that we still run school systems the same way we did when Harry Truman was president. Steve Rauschenberger: Yeah. Dan Proft: That was a while ago now. Steve Rauschenberger: Yeah, he would recognize the place except for a few laptop computers and iPads laying around in the place. I mean, we're still teaching Socratic method. What we know about kids. I mean, what we should know from all the brain development is people learn, and kids learn extraordinarily well. Okay. When they're motivated and they want to, I mean, they don't have any trouble picking up the apps on the iPad–stuff that I can't figure out. 8 and 10-year-olds know–I mean, somehow, intuitively. So why haven't we made any progress on how we share curriculum or teach people skills? And turning schools into social service agencies and try to monitoring microaggressions and regulating the bathroom use of transgenders–I mean–I am not surprised that the adults running school districts are a little discombobulated. I mean, they're worried about being sued for not letting Cindy, who used to be Steven, into the right locker room. I mean, I don't know. Dan Proft: Whatever Cindy's self-identifying as today. Steve Rauschenberger: Yeah. And so the federal government's main thrust is to regulate their, I don't know, their moral vision on school districts instead of asking why we don't have better academic achievement. Dan Proft: So worker's comp, property taxes, another cost-driver from manufacturing that could be different than it is without endangering workers or otherwise being unfair to people on the employment side. Steve Rauschenberger: Well, the general tax climate, I guess I would say. This idea that local taxes aren't carefully looked at in the state of Illinois, school districts aren’t reviewed, our schools in Illinois, for the most part, do not teach industrial arts anymore or any kind of practical–I mean, we have to have a major program to reintroduce STEM which is science, technology, and mathematics to schools. I mean– Dan Proft: That's something else that everybody's supportive of, rhetorically. Steve Rauschenberger: Oh, yeah. Rhetorically. Dan Proft: Right. Steve Rauschenberger: Yeah, so we were going to bolt that on to the end after we do transgender studies and. . . Dan Proft: Well, but don't you worry we won't have enough kids on track to be poetry majors at Northwestern? Steve Rauschenberger: Listen. I think there's a shortage of baristas and I think Starbucks knows exactly what they're doing. Dan Proft: Yeah. Steve Rauschenberger: They're getting college graduates baccalaureates and debt to come in and make mocha lattes. Dan Proft: So on the tax structure, generally speaking, you're talking about personal income tax, the corporate tax– Steve Rauschenberger: The biggest single piece of property taxes. If you really take a look at the income tax in the state of Illinois, at the current level, they're not that big a problem. Dan Proft: But you have to look at it in context of the overall tax burden. You can't just say, "Oh, we have a low flat rate compared to everybody else. Yeah." And then we wind up, according to the tax foundation, with the 5th highest overall burden. Steve Rauschenberger: Right. And we have the highest or second to highest sales tax in the country. Our property taxes are 3rd to 5th, depends on whose score you used. So, it's a combination of those taxes that make us less competitive. What people don't realize today is the CAD/CAM, the specifications to make a manufacture part now are shot out on the Internet and received by companies all over the world. So in China, in India, in Mexico, in Indiana, Texas, Ohio–every place. So my members get these designs in diagrams and have to price them out and compete worldwide. Now we've got some advantages if it's an American manufacturer. Our shipping cost might be less. Depending. So all of those tax burdens that Illinois manufactures, Illinois employers–not just manufactures because employers in general pay–then other people don't have to pay end up as part of their price bid. They have to stay in business. Dan Proft: If only we could take a page out of Donald Trump's book and impose tariffs on any company that leaves Illinois to try and sell their goods back into Illinois, then we'd be in business, right? Steve Rauschenberger: Exactly. So if you're a free trader and you believe things ought to go where money is best appreciated, you're going to say goodbye to manufacturing in the state of Illinois slowly. What's amazing to me is one time, TMA had maybe 3,200 members. Today, we have 900 very bright robust manufacturers. They figured out that the space between the elephants–because my guys make a piece that goes to somebody else that makes a part that goes into a trust. Dan Proft: Second and third-tier supplier. Steve Rauschenberger: Right, right. They're supply-chained people. Dan Proft: Yeah. Steve Rauschenberger: So it's down to tenths of a penny. So everything we do in this state of Illinois whether it's bad roads, or bad politics or bad tax policy–in the end, costs them some percentage of the bids they put out. Dan Proft: So are we going to have it where you have a concentration of the small to mid-size manufacturers that are left? It's going to be in the largest contiguous industrial park in the world in Elk Grove Village. But it's going to be surrounding O'Hare because of the logistic advantage that that provides to be close to O'Hare for shipping and so forth. And for travel as well. It's going to be ring suburbs around O'Hare and that's about it. Steve Rauschenberger: Well, you're going to see–continue to see any place on 294. Any place on 355. I mean– Dan Proft: Main quarters. Steve Rauschenberger: Yeah, yeah. Main corridors is still pretty good for manufacturing. And access to jobs. I mean, work force is the biggest single challenge my members face. A bas as tax policy is, it's workforce that's the bigger issue. Dan Proft: So let's talk on the kind of the supply side. The supply of labor. You mentioned not enough apprentice programs in the high school level. Community colleges sort of filling that gap. You're rolling your eyes, maybe not. Steve Rauschenberger: Only if they get a federal grant and somebody begs them, they'll put some classes in that don't lead to a degree or don't lead to a certificate. Dan Proft: So those community colleges. Because, I mean, this is one of the selling points especially for workers who have become obsolete or what they used to do is obsolete. They need to be retrained so they can operate successfully in the new economy, the technology that's in manufacturing. You're saying that community college is as good as they are–open enrollment, lower cost than going to four year-university. Something like that. But they're not where they're need to be. Steve Rauschenberger: They're still in love with the baccalaureate. With two years here and two years at U of I, or three years here and one year at U of I. This idea that baccalaureate degrees are the ultimate expressions of society's investment education. It's a terrible mistake for a lot of people that are technically proficient in good hands-on. Dan Prof: Yeah. Steve Rauschenberger: You know, there are great jobs in manufacturing that pays 75, 85, 95. We have mold makers make $125,000/year that work at TMA. Now, starting wages are $10, $12, $14/hour. You work out well, in the first couple of years, you can be $18 or $20/hour. So it takes a while to get there. You have to learn the skills, but– Dan Proft: But coming out of high school or coming out 20 years old with an associates from Harper or somewhere else where you got a skillset that is applicable in manufacturing, you start to make pretty good money at a pretty young age. Steve Rauschenberger: Right. Or you get out of U of I and you got $65,000 worth of debt and you end up as a copier salesman. On commission, trying to get people buy copiers from you or working as a barista or–I mean, this idea that we don't need people who understand how to work with their hands, that understand how to work spatially with things, is a terrible mistake. Real wealth in the society comes from mining, manufacturing, and agriculture. When you produce something, the rest of it is all trading dollars. I mean, at the grocery's retail–and I was in retail for 20 years, I'm no disrespector of retail, but retail your trading dollars around. I mean, who gets the sofa and who gets the check? You're not creating any wealth. Wealth is created in manufacturing, it's created in extraction, in mining and– [cross-talk 00:31:00] Steve Rauschenberger: Yes. So the reason Illinois has done better than most of the rest of the country over the last 50 years is we still have 4 or 5 of the top 10 manufacturing zip codes in America. But little by little, Springfield's going to choke those right out of Illinois. Dan Proft: So 15 years ago, more than that now, one of my stints in state government was running a grant program that the state provided for small to mid-sized manufacturers to do worker training or retraining. Things like [inaudible 00:31:30]– Steve Rauschenberger: Right. Dan Proft: But also specific machines. They buy piece of equipment– [cross-talk 00:31:35] Dan Proft: . . .plastic injection molding or CNC. Whatever. The digital lathes and stuff as–I mean, this is a long time ago. 15 years in terms of technological innovation is an eternity. Steve Rauschenberger: Right. Dan Proft: And it was amazing to me, as somebody who has no technical proficiency, whatever, I'm one of those poetry majors. All of the cool things that are produced–and it's one of the–all clichés are true–a million ways to make $1M in America, because they're making screws and bolts and ties and machine parts, right? Steve Rauschenberger: Right. Dan Proft: And it was fascinating to me to see all of the cool, interesting things that people manufacture around the state. Because part of the grand process, the application process for me was to go do a psych visit to make sure it's not a P.O. Box and make sure everything's on the up and up, right? Steve Rauschenberger: Right. Dan Proft: And it was such an eye-opening experience to me. I almost wonder if we should pass legislation to mandate that every legislator would have to do what I did–go visit 150 manufactures around the state in the course of a year to understand exactly what they do, how important it is, what the opportunities are, and what the net benefit is not only to that company and to those workers there, but to the community and to the region, to the state. Steve Rauschenberger: Today's manufacture looks today like a clean room did 15 years ago. Dan Proft: Yeah. Steve Rauschenberger: Okay, their epoxy floors, they are spotless, they are full of safety equipment. One person generally runs between two and seven machines. Nobody's standing there, putting parts on and off CNC...you can't afford that in the United States. Dan Proft: You got to use this. Steve Rauschenberger: Exactly. I mean, all of that really low-cost, low-value manufacturing's gone to Mexico or to China. And you know, God bless them. The people still manufacturing in the state of Illinois are brilliant. They are bright. They figured out ways to be add-value and it–something to the process that keeps them competitive even though they pay a higher tax burden, they pay more for employees than other places, and they have infrastructure challenges. Dan Proft: I still am trying to wrap my mind around this. The jobs that pay the kind of money you're talking about, for our kids–I mean kids, young people that are teenagers to early twenties coming out, and manufacturers go to Harper College or COD or wherever and say, "Oh, I got opportunities. I got openings. This is what we do. This is what we pay. This is the trajectory. By the time you're 30, you're going to be doing better than just about all your friends unless they're making apps, unless they can code at over 1871 or something." I mean, it seems to me like both the young people, and maybe because they don't know as much, but the leadership of these institutions and the faculty–just shrug their shoulders and say “we want more Com Majors.” Steve Rauschenberger: Let me go with the path of least resistance. So what we've decided the TMA part of our goal is to begin to target parents, to talk about career paths for their kids because you get a high school kid who is good in Math, who is good with his hands, who likes to be involved in manual arts. But I mean, if his parents think he ought to go onto Harper and then onto Northern Illinois, or think that he ought to go to Northern Illinois University, you're not going to win that battle with $2/hour. So we're starting to figure out how to talk to parents. We've had 20 years of pretending that manufacturing was gone in Illinois. We contacted some of those state reps and state senators when we were doing our scorecard, and some of them said things to us like, "I thought all manufacturing was gone in Illinois. I didn't realize that it's still an important part of what we do here." I mean, there's this, just this– Dan Proft: That’s almost more disturbing than pursuing policies that just–I mean, that's probably the most disturbing reaction I think I could imagine. Steve Rauschenberger: Yeah. Sometimes, they're well-intended people. I mean, I think they value their jobs too much. Maybe we'd all be better off with term limits because if they weren't worried about getting reelected, maybe they'd be thinking about work comp that was good for injured workers instead of work comp that got them contribution. Dan Proft: Or maybe they should be making what? An apprentice is making–maybe they should make it $8/hour to start, too. It's a little bit less attractive to be there unless you're going to do something. Steve Rauschenberger: Well, yeah. But I mean, they'd never stand because we–you have to produce something in manufacturing. At the end of the day, there's got to be a product. There's got to be something you can sell to somebody else. The sad part about politics and higher ed and a lot of the institutions that we've created that we're pouring wealth into is there's no result at the end of the day. They don't want to be measured. I mean, every time there's some kind of standardized test measuring high school graduation accomplishments in the state of Illinois, in three years, they have to redo the test. Because they can't stand the results. It's like clockwork. You go back 20 years–every 4 to 5 years, we have a new standardized test to measure competency of graduation from our system because the test began to show that we're not achieving anything. ACT and SAT have been recalibrated every 5 years because they don't like the results they're getting anymore. So pretending, okay, that you've got an outcome is not the same as manufacturing which is why very few of the legislators that do very well in manufacturing. Because you better have a product that your costumers are willing to accept that meets specification that serves a need. Dan Proft: So let's talk about state government because the 15 years you were in the General Assembly as a state senator, just about everyone can see that the point–this is very much like Scalia. Even people didn't agree with you, I said, "This is the brightest bulb, one of the brightest bulbs. One of the brightest bulbs you had a long time." You were the chairman in the senate finance community so you were like, intimately involved in the budgeting process. As that for the backdrop of 8 months without a budget and really, as you kind of alluded to earlier, 14 years without a truly constitutionally balanced budget. What should people understand about a budget deal, about state finances, about what the fundamental problems are in Springfield when it comes to making ends meet for these programs that people want, where we spend most of our money–K-12 education, Medicaid, pensions, and infrastructure, transportation infrastructure. What should they understand that they don't? Steve Rauschenberger: Well, I think the one thing I tried to communicate when I do Kiwanis or Rotary Club is that there's no linear solutions any longer. You've allowed this system to be corrupted for so long that you can't fix anything easily anymore. Revenue doesn't solve the problem. They prove that with the last general income tax increase where they dumped $2B extra revenue dollars into a system that's– Dan Proft: Annually. Steve Rauschenberger: Annually. The programs that operate in Illinois to deal with things like Medicare and medical treatment of the disabled and–the programs are broken themselves, okay? They're layered with incompetence, there's patronage involved. I mean, you have to programmatically look. We can raise the sums of money necessary to make sure that disabled people get treated right, to make sure that parents with aging out, disabled children who did the right thing 20 years ago and kept their kids at home–now as they get 70 years old and they've got a 190-pound son who needs full-time care. They need to know what happens when I die. What happens when I'm too old to take care of them. And state government answers– "Oh, we don't have an answer." Because ASFCME, hasn't given us one yet. I mean, we owe people a much better job, but you can't fix any of that until you get into to the programmatics. People say in Illinois that we're starving the hospitals. We're not paying enough money to the hospitals. Dan Proft: Searching Medicaid reimbursements. Steve Rauschenberger: Yeah. Medicaid, Medicare, private insurance. But you tell me why then are there 9 hospitals under construction right this minute in the state of Illinois. Why are the bond holders lending money to hospitals to expand infrastructure when we already had too many beds? We built the hospital system in the '70s for 5 and 7-day appendectomy stays, postpartum stays–could be 7 to 10 days. But we don't need that anymore. So we had excess roof line and medical care today. So are they taking roof line out when they had these new hospitals? No. I mean, we are putting too much cash into the system to have to spend it. They're not for profits. So when children's memorial has excess revenue, they can't pay it out to shareholders. They can't buy a shipping company. They can't move it–they have to spend it inside the system or admit they're being overpaid. Dan Proft: And then the answer from the Democrats, like Lisa Madigan, is to impose more– [cross-talk 00:40:32] Dan Proft: Well, in taxes, but also, impose more restrictions with respect to like, charity care. Steve Rauschenberger: Yeah. But it doesn't make any sense. We got to get to the point where we pay the right rates for medical treatment. In the state of Illinois, there hasn't been any work done on the Medicaid rate since 2001 was the last time anybody took a look at Medicaid. Dan Proft: And here's the thing: I mean, it's funny, people–"Medicaid, it's not sexy to talk about. A lot of people don't have any experience with the Medicaid system, fortunately, for them. But it turns out, there's 2 million out of 13 million Illinoisans that are Medicaid eligible. Steve Rauschenberger: Yeah. Dan Proft: So a host of people have real experience with the Medicaid system and it turns out to be the worst quality healthcare that you can get. So all of the people that don't experience don't have to experience the Medicaid system but think that they are being so noble and taking care of their fellow man by supporting ever-expanding sums of money pushed into the Medicaid system. It turns out that they're just perpetuating a system that actually victimizes the people that are trying to help. Steve Rauschenberger: That's what I would tell you. And until you get to the core of how the aging program doesn't work, how the Medicaid program doesn't do the things that's supposed to any more than the work comp system–it takes care of injured workers. These are all about connected insiders and people who benefit from the status quo arguing for their piece of the pie. And until we kind of break that mold, and that's why I was kind of excited when we had an outsider elected as governor thinking, Boy, let's bring some bright people and let's take a look at where Medicaid works. Let's take a look at where work comp works. Let's take a look–I mean, other places are getting it right. State government actually works on about 40 of the 50 states pretty well. It’s just in Illinois were the poster child for state government that is so self-focused on the politics and the fund-raising and the reelection. I mean– Dan Proft: And the distribution of benefits. I mean, Blagojevich, people forget this because they're so focused on–I got this thing that's f’n golden piece of his impeachment. They forgot that one of the other charges for which he was impeached was illegally expanding the Medicaid program to try and make it a middle income family entitlement to curry votes. Right? Steve Rauschenberger: Yeah, buying votes with programs. Dan Proft: So the Medicaid system has been expanded beyond all recognition in terms of the vulnerable populations that was intended to serve the disabled and pregnant women and injured children. And so people are on Medicaid right now, accessing Medicaid, and that's only going to expand under the ObamaCare expansion of Medicaid that were never intended to be served by Medicaid. We can't finance the system now. You have people that are truly in need, that don't get access to health care because we can't finance the system and we don't pay our bills and so hospitals like University of Chicago stopped accepting Medicaid patients. So, I mean– Steve Rauschenberger: What are we doing? Dan Proft: Yeah, yeah, yeah. Steve Rauschenberger: If you got people showing up at 7-eleven to buy milk, okay, and you want to do a program for poor people to help them get milk–is it a good idea to go next door to the 7-eleven, buy a building, put a roof up, hire people to go sell them milk? Okay? No. The smart thing to do is go where they're already going, okay, and figure out a way to get them their milk at the 7-eleven, and the infrastructure you already own. And the medical system, we've encouraged the development of clinics right next to hospitals where we build new roof line, hire new people to take advantage of great rent-seeking–rate disputes where if you're an FQHC in the state of Illinois, you get to pay the usual and customary to see a patient. If you go to the emergency room, you're only getting the Medicaid rate. So we've incentivized hospitals to support the development of a clinic right down the road, doing exactly the same thing in the emergency room. Dan Proft: We started to do a redetermination of Medicaid roles under Quinn, and it was projected by those that began to–the consultant they brought on to do this, as well as the Kaiser Foundation. That if you remove people from the Medicaid roles who are not eligible under the old Medicaid threshold of 185% of poverty level–I think that's what it was–that you could save somewhere between half a billion and $750 million annually. I mean, that's not the whole solution. Steve Rauschenberger: Right. But that's a big piece of it. Dan Proft: That's a big number. But hear again, nobody wants to have the mailer that says, "You're throwing vulnerable people off the Medicaid rolesxs." Steve Rauschenberger: So maybe the mailer is the problem. Maybe we need to tell people– "When you serve in Springfield, you got 10 years." That's it. Steve Rauschenberger: When I ran for office, I thought, that term limits were a bad idea. While I was in office, it seemed like a cheap and easy out in the '90s. Dan Proft: Right. Steve Rauschenberger: But looking at the level of corruption we have in Springfield today, the inability of Republican or Democratic leaders to see beyond the next cycle. Maybe term limits is a dull knife. It's not the right scalpel, but I become a radical. I'm pretty much willing to try anything. Because what's happening now doesn't work. I mean– Dan Proft: Well, maybe, I mean, again, looking at other states, and I know you do a lot of work for national conferences of state legislatures, so you get around the country, and you see, as you said, models of success that should be replicated versus failures that should no longer be perpetuated like here. Maybe it's like Texas where the state legislature meets once every two years. You essentially get a stipend. It's mostly ranchers and businessmen in the General Assembly, not lawyers and insurance salesmen and professional politicians. And boy, it turns out that that generates very different outcomes whether you serve 2 years or 10 years or 15 years. Steve Rauschenberger: And the first step of the reform ought to be the end of legislative pensions. I just had to take it, it’s the wrong- Dan Proft: And insurance. Steve Rauschenberger: Yes. I mean, those are the wrong incentive. They perpetuate employment in the legislature instead of service in the legislature. I stayed, did my 10-year stint, and ran once more for the new cycle when the Democrats won the map, then tried to offer a state-wide alternative to the Republican Party. I was not successful, then left. I mean, that ought to be more the model. It ought not to be 20, 25, 30 years of service, and you certainly can't afford the Speaker of the House for 38 over the last 40 years. I mean, there's proof-positive of some kind of change as important as Mike Madigan. Dan Proft: Yeah, right. I mean, and certainly, Madigan and Cullerton, I think, 30 years, 40 years is enough for probationary period to make an assessment. Steve Rauschenberger: Let's just take a look at the results of Mike Madigan's 38 years or 40 years as Speaker of the House. Where is Illinois today? Where was it when he started as the speaker? Are we better off today? Dan Proft: But now, the problem, one of the problems is despite where we are, you have Republicans in the super minority in both Chambers. Isn't that a commentary? And President Obama recently in town to deliver his no red American no blue America kind of sawing sawdust a bit, bringing us all back to 2004, wasn't that fun. And I had this picture that was tweeted out by Kirk Dillard, former state senator, two-time candidate–Republican candidate for governor, long-time Republican legislator from… Steve Rauschenberger: DuPage. Dan Proft: Yeah. From the leafy suburbs of DuPage. And he tweets out a picture that shows him in front of President Obama's motorcade saying, "The only thing faster than the RTA" –of which he's now the chairman. One sinecure to the next. "The only thing faster is the president's motorcade. It was such a great fun to be able to visit with President Obama" –who he endorsed in 2007 in advance to the Iowa caucus. "so fun to visit with him in the motorcade on the way to his glorious speech before the noblemen and magistrates in Springfield." And isn't that the problem of Springfield from the Republican perspective that you've had Republicans at the leadership level complicit in Blagojevich and Quinn, and frankly, even Thompson and Edgar and George Ryan before them, complicit in these big government gambits that have put us in this position we've described. Steve Rauschenberger: Yeah. I think so. I mean I think it's really clear that particularly, the Republican leadership and some of the Republican donors don't understand that this is not a–it's not a zero-sum game. I mean, you don't have to have the kind of leadership we have in the state of Illinois. I'm just disgusted by the fact that for the last 10 years or so, I don't remember a single earth-shattering public policy alternative offered up by the Republicans down at Springfield. It's not like they said, "You know what? Public schools don't work. We know they don't work. Here's four ways we can make them better." Because they're afraid of a mailer. I mean, they don't do public policy because public policy might put their districts at risk. Well, listen. When you're down to, I don't know. What are they down to? 17 or 18 or 19 state senators? Dan Proft: 20. 20 out of 59. Steve Rauschenberger: Yeah. What have you got to lose? I mean– Dan Proft: Those 20 Republican senators have something to lose. But here's the thing. They don't because you're basically down to base camp Republican… So all those Republican Senators that represent Republican districts with one or two exceptions– Steve Rauschenberger: 70%. Dan Proft: –to exceptions, they're not in seats that are at risk. They're not at targeted seats. Madigan could go all day long, at least right now and into the foreseeable future. In most of those senate seats are Cullerton could and Madigan in the house, most of those rep seats. Steve Rauschenberger: Yeah. Dan Proft: You're not going to take out Jeannie Ives in Wheaton, so– Steve Rauschenberger: Yeah. So why are only just a very few of them, Jeannie Ives is a great example–talking about alternatives to the Mike Madigan house which doesn't permit members introduce bills or having called on the floor for a vote unless Mike Madigan approves the bill individually? Why aren’t they talking about alternatives to a K-12 system that really isn't producing despite the amount of money we're dumping into? Why don't they have a vision on waves to change the Medicaid? Dan Proft: So why don't they? Steve Rauschenberger: Intellectual sloth? Dan Proft: Do you think it's just vacuity? It's not something more pernicious than that? Steve Rauschenberger: I know a lot of them, okay. I don't think– Dan Proft: No, I know. Everybody's a nice guy. Steve Rauschenberger: Yeah. Dan Proft: And a nice gal. Everybody's nice, and then they go to Springfield and do a lot of not nice things. Steve Rauschenberger: Yeah. Well, it's just they have bought in to a system that this is the way it's got to be, that Mike Madigan should control the state of Illinois because he's got the votes. I mean, I had them come out–I had a group of state reps. Great state reps come sit with me out at TMA and we talked for two hours about ways I would've solved the budget if I were in their shoes now. I mean, kind of things to put out there. The Democrats, make the Democrats answer for what we're doing. They're all excited. I mean, they vibrated, they left, and two weeks later, it's over. I mean, it's such a–I mean, I don't know how to–it's Stockholm syndrome. I mean, there's some good people down there who are trapped by a system that they think is valid, but it's not valid. This is worse than what they were doing in Detroit 15 years ago. I mean, the emperor has no clothes. I mean, we are so far past the constitutional requirements that the Illinois Constitution–the legislature should be indicted. Dan Proft: So. [cross-talk 00:51:44] Dan Proft: Under RICO, criminal conspiracy. Steve Rauschenberger: That's right. Dan Proft: So if that's true and we're so far past it, we could have all the good ideas in the world–Rauner's turn-around agenda, your turn-around agenda, some facsimile facsimile of the two, and you can't move without numbers. You got to win elections, you got to have numbers. So what is the way out? Because good ideas doesn't seem to be the problem. It seems to be a lack of testicular virility, to borrow a phrase from our friend in prison in Colorado, or it's a personnel problem, it's a culture problem, it's all of the above. What is the way out? Because it can't–it's not putting together attractive five-point plans. Steve Rauschenberger: No, no, no. They don't need another white paper. I'm afraid Illinois is to the point where we need a Puerto Rico solution. I think– Dan Proft: You mean to become a U.S. territory and not a state anymore? Steve Rauschenberger: No, no, no, no. I mean essentially to file bankruptcy. Dan Proft: Yeah. Steve Rauschenberger: I mean, Puerto Rico is going through a very similar thing with one party controlled down there for 15, 20 years so they promised everybody everything and didn't deliver on anything. And then just kept borrowing money. The city of Chicago schools went to the bond market and paid 8.6%, 8.7% interest rate on a tax-free bond? Dan Proft: Yeah. Steve Rauschenberger: I mean, it is incredible. We are so far past with normal and the other 48 states that it's impossible to even explain to people. So I think receivership, we ought to be asking and requesting in Congress the right to. Because, I mean, Dan Proft: But that’s never going to happen because California, New York, Connecticut will be right behind us. Steve Rauschenberger: Well, maybe that's the reboot it's going to take. You take the blue states where they have spent the future for 25 years, where they had made pension promises that nobody reasonably can ever redeem. I mean, this is not about–can we dedicate an extra $500M or $750M or $1.2B to a pension system. This pension system is so far out of whack, it is unrecoverable. I mean, we are now in the TRS selling assets. Underlying investment assets to fund current retirees. And we've got this whole baby boom just beginning to retire. I mean, duct tape is not going to help anymore. Dan Proft: And did you see? I mean on that $725M CPS borrowed at the Sopranos rates, right? The balloon payment at the end, it's north of–it's $1.5B, roughly, at the end of this. So when are they going to come over that? They run $1B annual budgets deficits. . . Steve Rauschenberger: Already. Yeah. Steve Rauschenberger: Right. In addition to all of the legacy costs. Steve Rauschenberger: Somehow, that Springfield was going to see the wisdom of dumping another $500M that they don't have into CPS and what were they going to take that one from? Dan Proft: So, the answer is to redistribute from wealthy school districts. I mean, which was on the school's piece of it. Steve Rauschenberger: Yeah. Dan Proft: Redistribute from wealthy school districts to so-called "poor school districts." Poor school districts like the city of Chicago that spend more per pupil than Wheaton-Warrenville. So that's the solution. That's what Andy Manar, state senator from Decatur has proposed. And it's got some legs. It's got some support particularly among Democrat supermajorities. Steve Rauschenberger: Yeah. The brilliance of their public policy never ceases to amaze me. I mean, the idea that throwing everybody else into the kettle with CPS is a solution. Instead of dealing fundamentally. But nobody–when was the last time we heard a–they talk about school funding. Ask them to talk about school spending. What do school districts spend money on? Okay. Dan Proft: Isn't that the fundamental problem across all of these big-tickets in state government. Inputs completely disconnected from outputs. Steve Rauschenberger: Exactly. Dan Proft: It's just about what we pour in for those mail pieces and to television commercials and the like. It's not about what the outcomes are. The outcomes are–I don't know what they are. But the important thing is we keep continue pouring more money to schools. And frankly, even Rauner has kind of bought that lie to some extent. Let's push more money into the school systems without structural reforms. Steve Rauschenberger: Yeah. And that was the only thing I've been disappointed by. And maybe there’s some domestic politics that I know his wife is a big believer in K-12. I am, too. I think K-12 is important to America. I think a vigorous, high-quality K-12 system is important in the United States. I just don't think we have one right now. Dan Proft: Now, going back to just the politics of this, the Stockholm Syndrome, just trying to get a handle on this. And this is conversation that happens internally all the time and everybody's beset by it, myself included. But Rahm, is about as popular as the New York Mets in Chicago, right? I mean, his approval rating is approaching Blagojevichian territory. Steve Rauschenberger: Yes. Yeah, yeah. Dan Proft: Two west side Democrat legislators propose a recall bill, and who's on it? Very few Republicans. A few of the new breed, the new freshman Republicans that are conservative join with a couple of Democrat state legislators, not the Black Caucus, the Democrats. "Okay, they're beholding the Mike Madigan. They're beholding John Cullerton, I get it, so they're just going to do what they're told." Again, there is no downside why Christine Radogno in the Senate, why Jim Durkin in the House–the senate and house superminority leaders don't say, "Yup," in mass “We're taking a caucus position, we're going to support this even if it doesn't apply to Rahm, this term, we have recall at the state level for the governor, for state legislators, why wouldn't we have recall for the mayor and for aldermen in the city of Chicago? I mean, after all, the city of Chicago's largely financed by the state. CPS is. Steve Rauschenberger: Yeah. Dan Proft: So why shouldn’t we move in mass and they won't do it? Steve Rauschenberger: Yeah. I haven’t heard a single legislator talk about the new auditor general and his campaign problems. I mean, we have a new auditor general which was the one bastion all during the Blagojevich administration where I could get real data. I mean, the Blagojevich administration wouldn't give me information. His senate president Emil Jones wouldn't enforce my right as the director of appropriations for the Republican to get information about the budget after–trying to remember the name of the budget director– Dan Proft: Bill Holland. Steve Rauschenberger: No, no, no. Whatever. Dan Proft: Oh, oh, oh. Philon Steve Rauschenberger: Yeah. When Philon took over, Philon just shut down information to the minority party, and actually, to most of the Democrats, too. They weren't entitled information about the budget. I mean, it must have been the way they ran things when he was at the park district in Chicago. I mean, that was good enough for them's good enough for us. Dan Proft: Sure. Scaler. Steve Rauschenberger: So the only people we had, we had the auditor general’s office. So now, the auditor general retires after 20 years, pretty distinguish service, pretty square guy–we have a new auditor general, turns out he's got some real irregularities in his political campaign account that he won't answer for. And so, where's Christine Radogno who voted from him? Where's Durkin? Where are Republicans, saying “You know what? You want to be auditor general? You need to come clean on what your campaign finance statements are.” Those are public documents. Dan Proft: Who audits the auditor general. In addition to that, you have only nine. Again, those freshmen conservative and second term conservative legislators vote against him for confirmation. Steve Rauschenberger: Yeah. Dan Proft: It's a legislative move, it's not a governor move. Where's the due diligence in the first place? To know this was a guy who was– a mushroom down in south county for 20 years, spending money, didn't have very many races over the course of those 20 years, and we find out that he's spent $210,000 at a gas station in his district to maintain his car or cars. Steve Rauschenberger: Yeah. Dan Proft: I mean, that's a lot of money on a car. [cross-talk 00:59:33] Steve Rauschenberger: . . .new car every two years. Yeah. Dan Proft: You could buy a Bentley every two years. Steve Rauschenberger: Yeah. Dan Proft: Or just about with that kind of cash. In addition to meals at a restaurant– [cross-talk 00:59:42] Dan Proft: I mean, all of that stuff, and it's just like, "Well?" It's not a story because the Chicago Press corp. which is in the tank for the Chicago Democrat political establishment. They say it's not a story, so it's not a story. I mean, it just seems to me–you could have Madigan to borrow a line from Trump. Dan Proft: You could have Madigan opening fire on Michigan Avenue, and then people would say–well, I mean, if Frank Pearson is not going to write about it, it's not a story. Steve Rauschenberger: Yeah. I don't care whether it's a story or not. The one true source of data that the minority Republicans have had for the last 10 years has been the auditor's office. And so you're going to let this get turned over to a political hack who won't answer for what he publicly disclosed? Whether the Tribune writes about it or not–I mean, there ought to be bills introduced requiring him to disclose and to come forward or to resign. Dan Proft: Here's the thing– Steve Rauschenberger: Mike Madigan killed those bills. Mike Madigan defend his auditor general that he selected. Dan Proft: Not only that. How about this? The money that he spent which was essentially–I mean, I think, arguably, personal use, not reimbursements for legitimate campaign expenses. That's called tax fraud. Because it's personal income–Bill Beavers, a Cook County commissioner, went to prison for that. So why aren't you in addition to introducing Bill saying, "Hey, Zach Fardon, U.S. Attorney for the Northern District, why don't you take a look at this? This is Bill Beavers on steroids. This is Aaron Schock, Mr. Downtown Abbey, on steroids. Why should he get away with this?" Aren’t there legitimate questions that should be asked and answered. Why not have hearings? Why not do everything that you can to put a spotlight on this if for no other reason than to show separation and to show that Republicans are going to police what's happening in the General Assembly and state government, more generally, as well as ideally, maybe someday policing themselves? Steve Rauschenberger: Yeah. Exactly. A few times, I had the opportunity to watch on CSPAN or something questions with the prime minister. Dan Proft: Yeah. Steve Rauschenberger: And you go back to some of the legendary days when Thatcher stood and answer a question. In those days, the minority party in parliament had a shadow minister. Someone who knew each of the programs and government and was prepared to debate them with the majority. I mean, there's no–Madigan's never responsible for answering questions on what he does as prime minister of Illinois. The Republicans are not in a position and make no effort the last 10 years to offer policy alternatives to kind of win elections. The reason that minority parties, they win elections and parliamentary is they have alternatives. The Republicans haven't offered an alternative to the budget mess in Springfield since Blagojevich days. Dan Proft: So is part of it a personnel problem and you need new leadership in the house and the senate? Steve Rauschenberger: I think you need new leadership in the house and the senate. Probably need a lot of new members. Dan Proft: Well, I mean, now, to qualify this, your political judgment only goes so far. You did endorse me when I ran for governor. But four people think you're omniscient and you always exercise good judgment. Steve Rauschenberger: And I ran myself twice unsuccessful. Dan Proft: Right. Steve Rauschenberger: So, yeah. Obviously, I'm never good at this. Dan Proft: And so the last topic before we let you go back to trying to rescue manufacturing in Illinois. The electoral politics and the party. We've talked about the general assembly and the composition of it. You were seen, as I said before, and I mean I mean it genuinely, you were kind of a mentor to me back when I ran my first state-wide campaign, ran Pat O’Malley’s campaign for governor in 2002. And you were kind of like, "Okay. Let's actually understand how state government works." And so you were the guy that everybody went to. What about on the electoral side? What about the Republican Party in its previous, maybe even current iteration prevents talent from bubbling to the top. Prevents us from putting forward better state-wide candidates than we've had for the better part of the last two decades. As well as better legislative candidates. Steve Rauschenberger: Boy, if I had the silver bullet and I knew how to fix, and I would tell you. But what it might–my quick observation would be this: is that when I ran, the money in Chicago, the Republicrats, the Republican kind of sort of financial leadership who are only interested in somebody they knew, okay, never got past the idea that you couldn't just run this as kind of a consensus thing. They didn't realize that public policy made a difference. They always had the next four quarters, the next two quarters, the next two years in their sights. So I think we've lost a lot of emerging leadership out of the Republican Party in Illinois because the leadership and the donor base doesn't understand the difference between Rahm Emanuel and Jeannie Ives. They don't–well, they do. They actually understood–they like Rahm because they see him at the kind of places they have dinner. Where these people that are just talking about issues all the time or care about things that–they're just–they're icky. Dan Proft: Okay. Steve Rauschenberger: So we had this Thompson, groomed leadership that kind of sort of put up with Edgar. And we're a little dismayed by George Ryan, but tolerant. They kind of sort of thought, "Well, we'll see how it works with the Democrats in charge." But there's very little mentoring emerging leadership in the state of Illinois. And we don't have Koch Brothers. We don't have the kind of people who–in Illinois, in my opinion, the donor base that developed a vision and said, "We're going to support people as they make progress." Dan Proft: Do you think that's starting a change with the election of Rauner? I think there's some reason for optimism in that front. With Rauner as well as some of the people who finally said, "Well, this is ridiculous." And maybe, this idea that I support Rahm because I'm afraid of the worst, of what could be worst, just guarantees the worst. Steve Rauschenberger: Yeah. I hope so. And I'd like to believe in that, misleading myself, thinking that Rauner maybe is the beginning of a major change. Or worse though think for a minute. Rauner purchased the Illinois Republican Party for less money than almost anybody could've dreamed of 20 years ago. I mean, he installed the chairman, he whistles the tune, the legislature votes present when he tells them to vote present–I mean, unfortunately, Rauner, because of his background and his skillset is not the kind of leader that's going to rise up bright and fought for the people underneath him. I mean, it's a top-down I write the check, you do what I tell you. The kind of stuff you do when you walk into a screwed-up company and kicked the management out I get. But I'm not sure if it's strong party-building in the long run. I mean, I think the Republican Party’s got to go back to the grassroots, to the faith-based community, to the TMAs of the world, to the small businesses, to the small chambers of Congress talking about what it is we need in leadership and start bringing people out the way Georgia did 20 years ago and flipped that whole state around. All around us. Dan Proft: And tell them, "Oh, by the way, if you want this thing to be flipped around, you can't be an innocent by-stander in the sidelines. I know you're running a business, I know you're beset with kids going to school, and the day-to-day operation of your business. But we need all hands on-deck here." So don't say, "Oh yeah, he's got it." No, no, no. This is not a one-man job or–we need you engaged and involved if we're going to flip this thing around. So you need to tell your employees, "You better vote our collective pocketbook and be a little more activist than they've been." Steve Rauschenberger: Yeah. And they've got to talk to their employees. I mean, it's one of the battles we fight at TMA because there are members are not very political. We have a robust GRC, they contribute because we tell them it's important for them to contribute. We have a modestly little nice pack for a small association. But they don't want to talk to their employees about who to vote for. They don't feel comfortable telling people how to vote. But I mean, if we're going to change– Dan Proft: It’s like the difference between the Black churches and the Catholic church. Steve Rauschenberger: Yeah, yeah. Dan Proft: Maybe we should look at what somebody else has, again, a successful model that activates the people that looked to you for leadership and provide the leadership they're looking for. Steve Rauschenberger: And the part of the message I've been helping the TMA absorb over the last 18 months–this is not going to get better unless we are involved in this game. I mean, hoping that the great base is going to stumble on the solution down in Springfield or that all by himself, Bruce Rauner is going to infuse the General Assembly. So it starts with the scorecard. And we're going to call legislators to account. Suburban legislators have represent manufacturers in good areas–we're going to ask them, "Why is your score 60%?" "Why aren't you 100% pro-business and pro-jobs?" I mean, you want to be pro-middle class? That's about jobs. Okay. It's not about Illinois having the lowest workforce participation we've had in 30 years, you ought to be embarrassed about that. We just need to point out to people that these kind of things that retard job creation that lose us bids that mean that manufacturing doesn't take place here. That companies like State Farm begin to move their processing out of state. We're disinvesting. We're forcing disinvestment in the state of Illinois. Dan Proft: If you were advising Gov. Rauner on this budget impasse right now, what would you say to him regardless of the outcome in March, in November. Say you get out of the superminority house but you’re still in minority or still in the superminorty of the senate. What does victory look like for you short-term? Or should Bruce Rauner think victory looks like for him short-term like this election cycle and any budget deal that's cut. Steve Rauschenberger: Boy, I don't know. I don't. Dan Proft: Because it seems to be a part of the problem is I don't know that anybody says, "This is what victory looks like in this landscape." Steve Rauschenberger: Yeah. I been a little like, flummoxed or confused that even he might believe somehow that rolling the income tax back up solves his budget problem. I mean, his budget problem is so structural and so difficult that I don't know–that's why I don't want to think about a sovereign state filling bankruptcy. I don't want to be part of a state that does file bankruptcy. But I don't see any incremental pathway from where we are today as a guy who did budgets down there for 10 years to a balanced budget. I mean, you cannot account for the pensions, the unfunded debts that we already owe, the unpaid bills, and the trajectory of the programs anywhere under a 10% income tax. And that 10% income tax would have economic reverberations which should probably kill his collection. Dan Proft: So what Rauner's doing right now, basically, is saying, "Look. We'll pay money as we get it in per court decrees, and until Madigan and til, a lesser extent Cullerton, are willing to deal at least on some of the component parts of the turnaround agenda that we just will have no formal budget. Steve Rauschenberger: Yeah. I don't know that I have an alternative form. If he called me down and asked me what to do, I don't know what to tell him right now. I mean, this is not a sustainable system. It wasn't when he walked in the door. It just didn't happen in the 13 months he's been there. This is the outgrowth of the Blagojevich budgets. Okay? Where the General Assembly allowed on a roll-call vote for them to pretend they had $2.2B in revenue from a bond transaction that was a fake. I mean, they kept the lies 25 years arbitrage gains when they did that $10B bond deal and pretended that that was a revenue source and he spent it. And he built the base of his budget–so you got to roll all the way back to what budgets look like in 2001, 2002 and start stuffing in inside your revenue stream. Dan Proft: All right. I hear what you're saying. I should be looking for a bungalow in northwest Indiana. I got it. Steve Rauschenberger: Yeah. Actually, I told my wife, Florida. Dan Proft: He is Steve Rauschenberger, the President and the C.E.O. of the Technology and Manufacturing Association representing small and mid-sized manufacturers in the state of Illinois. Former state senator for 15 years. Been pleased to have Steve Rauschenberger as our guest on this edition of Against The Current. Steve, thanks. Steve Rauschenberger: No, I enjoyed it.

 

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Dan Proft & John Tillman

On this edition of “Illinois Rising”, Dan Proft and John Tillman, CEO of the Illinois Policy Institute, discuss Governor Rauner’s upcoming budget address with his former advisor Donna Arduin. They are joined by Jason Riley, author and Wall Street Journal columnist, who in referring to the black lives matter movement says, "I know something about growing up poor, and it isn’t that hard to avoid being shot by a cop." Dan and John recap President Obama’s speech to the General Assembly and discuss takeaways from the New Hampshire Primary.

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Dan Proft: Good afternoon. Dan Proft, and joining me on this edition of Illinois Rising is Illinois Policy Institute, President and C.E.O. John Tillman. John had a bunch of big speeches in Springfield the last couple of weeks. We had Gov. Rauner gave his State of the State Address, we had the President of the United States make a rare appearance. John Tillman: Like healing appearance. Let's all just get along and love one another. Dan Proft: Yeah, yeah. Exactly. Following up, though, on something Rauner made mention of in the State of the State Address–even Pres. Obama agrees with me on redistricting reform and term limits. Now I think maybe Pres. Obama is a late convert to those positions, but a convert nonetheless. He made mention over district reform, specifically in his address this week. But now, we look prospectively to Gov. Rauner's budget address this coming Wednesday, the 17th. What do you expect the governor to lay out as we're eight months into this budget impasse? John Tillman: I think he's going to lay out a broad structure and I think he's going to–of how to solve it for the current fiscal year with the current impasse [settlement 00:01:35]. This fiscal year runs through June 30th, but I think he's going to lay out a framework of–for how to get through the next fiscal year and try to combine the two. And I think he's going to ask for authority from the General Assembly to [inaudible 00:01:47] problems through them, authorizing him to make cuts and allocate resources with limited resources that we have. In other words, put him on the hot seat and take yourselves off as to whether or not Speaker Madigan wants to do that or not is another question. Dan Proft: Well, somebody that has been on the frontline and the inside trying to fashion some points of compromise and get a budget deal done. She is Donna Arduin, the former budget director for Gov. Rauner who now is a Senior Fellow at the Illinois Policy Institute, and she joins us now. Donna, thanks for joining us, appreciate it. Donna Arduin: Hi. Glad to be here. Dan Proft: So I guess start with maybe your experience. Everybody's talking about it but a few people have really been on the inside trying to fashion a budget the way that you have. Now, what was your experience during your time as the budget director and the real stumbling blocks that you found in terms of trying to make progress towards a constitutionally balanced budget? Donna Arduin: I would start with, and compared to other states that I worked in, Illinois oddly requires the governor to put together and give to the legislator those time every year a detailed, balanced budget plan. And we worked very, very hard on putting together a plan that not only balanced the budget but did it with the lower tax rates that we have in place right now. But unlike other states, the legislator has no real requirement to do anything. So we are sitting here a year later and the budget office is getting ready to put together a budget for the fiscal year that starts in July, and the legislator hasn’t acted on the one the governor gave them last year. So the experience working with the governor's office and agencies and putting together a well-crafted plan was fantastic given all the difficulties that Illinois faces. But the experience of watching for a year now, waiting for the legislator to act has been very frustrating. John Tillman: Donna, you're perhaps the foremost expert in the country on state budgets. You worked for five years for Jeb Bush who, by all accounts, was a fiscal conservative and had many good accomplishments. And to be clear, that's not an endorsement of this presidential ambitions, but he did a great job in this respect as governor of Florida. You worked for George Pataki, you worked for John Engler, you worked for the former governor of California, or Arnold Schwarzenegger during, as you like to say, his one good year. What's been the most shocking about Illinois versus all these other places where you've had such interesting experiences as well? Donna Arduin: Believe it or not, there were actually were more than one shocking thing. John Tillman: Surprise, surprise. Donna Arduin: Surprise, surprise. I mean, even compared to California and New York which certainly have their own challenges. And compared to well-run states that have fiscally conservative constitutions and law structures like Florida and even Michigan. There were a lot of surprises. First I've been in, obviously, been in states that have union controls of many items surrounding the budget, but none like I saw in Illinois. The union control is just really sort of intertwined and [inaudible 00:05:00] off many aspects of the governor, and even legislators' abilities control the fiscal situation here. The other things that surprised me really was the demoralization of the government. They can't hire staff, they're doing things in a way that's just normal or expensive than they would do if they were given some flexibility on how to manage. The state buildings are falling apart and it's all because the legislators just hasn’t been able their willing to deal with the cost of pensions in Illinois, the cost of state employees through the collective bargaining system which is just as far more controlled than it does on other states to [drive? 00:05:54] wages, salaries, health insurance, and pension [inaudible 00:05:58]. And there's nothing wrong with paying people who work for the government a good wage, but it is a problem when it becomes both a detriment to government stability to operate or even being able to employ people. And also, to the detriment of tax payers who just can't afford [inaudible 00:06:18] pay for those things for state employees, but to pay for themselves. They don't have those type of wage hikes and health insurance and certainly not the kind of pensions that state employees have been promised. Dan Proft: I was doing a little research for a piece on this topic, generally speaking, and I came across a story. I'll just read you the lead graph. "Confounded over how to close a gaping budget hole, Democrats who control Illinois government agreed on a two-year plan to divert hundreds of millions of dollars earmarked to underfunded state pension plans and use it for schools and other programs." That's from a Chicago Tribune article in 2005. And it has been this rinse and repeat approach to state government for decades, for generations. But here's the problem, and I wonder what your perspective is on it. When you have social service providers not getting paid for work performance, state fenders not getting paid for work performed or services provided, you got to understand [inaudible 00:07:18]. Just do something. Just pass the budget, the $4B unbalanced budget that Madigan and Cullerton want you to pass. I mean, we've been doing [unconscious? 00:07:28] unbalanced budgets for 14 years. Let's just keep it going because I need to get paid to keep my doors open. So on the one hand, you're sympathetic to people who are being scammed by a government they've provided goods or services to, and on the other hand–and they're used to just exact what this Tribune article from 10 years ago reported and what has been going on for 15 years. So let's just do this for now and then we can just figure it out next year. Donna Arduin: Good question. And I don't think anybody went into this–wanting to have vendors not getting paid. But if this doesn't stop, as you were saying, we're going to come to a crisis. The state and the pension system will run out of cash. And then nobody will get paid. And it will be worse than that. There will be no one getting paid and we won't have services. So the governor didn't do this so that vendors couldn't get paid. He did this so that we could bring about real change in Illinois and stop the slide. Turn the slide around, which is why he calls us the [inaudible 00:08:31] of the turnaround agenda. Dan Proft: And you get the sense, and John, too, as well [00:08:35]. Did you get the sense that until something like that happens–I mean, this is–what you're describing is the responsible thing to do, of course. And it's funny because it doesn't seem like state workers and others get the idea that this is the position that's actually in their interest like you kind of–you're on their side and they're not. But the idea that until and unless something cataclysmic like that happen, a whole host of state legislators and a whole lot of public sector union bosses just don't believe it will ever come to that. John Tillman: Go ahead, Donna. Yeah. Well, I think that that is absolutely true. I think–and Donna, maybe you can entrust their delusion by talking a little bit about the tax burden in Illinois. I think one of the things that is so ironic when I talked to union spokespeople is they don't think the people of Illinois are taxed enough. They think much more money needs to come out of individual taxpayer's wallets and be put into their wallets, which is how they get paid. And they don't take the evidence of the outmigration, people abandoning ship and going to other states. Not just Florida and Texas, but we lose population to every single other Midwest state, every single one of our neighboring states, of course. And Donna, you've done a lot of work and [inaudible 00:09:38] tax burdens and the spending burden that states take on whether it's state taxes and spending or local tax and spending, including property taxes. This is a very big indicator of future successes, is it not? Donna Arduin: It is. It is, John. And even on the most important issue, we can argue the numbers any way–several ways. But the fact of the matter is people get to choose in this day and age where they want to live. Where they want to run their businesses, where they want to invest, and provide jobs. And they're leaving Illinois. And that's just irrefutable. So when you look at migration amongst people who are citizens of the United States, people are leaving Illinois more than they're leaving other states. And to your point, John, the tax burden that any state faces is really the amount that's being spent. The amount of money governments are spending including for pension systems even if they're really committing that spending to the [feature? 00:10:43] by taking out that not making payments. It all counts in the economy field. So if the legislators says, "Well, we're only spending this amount because we're just going to push off pension payments." the economy feels the full burden of that. And that's the reason why we see the results that we do which is that people are leaving Illinois. Dan Proft: Donna Arduin, former Gov. Rauner Budget Director, now a Senior Fellow at the Illinois Policy Institute. Donna, thanks so much for joining us. Appreciate it. Donna Arduin: Thanks, Dan. Dan Proft: Dan Proft back with John Tillman, President and C.E.O. of the Illinois Policy Institute. And John, this is so fascinating. It kind of shows you the totalitarian mentality that has taken over education. Well, you talked mostly about this in the space of higher education academia, but it has made its way down the K-12 Education. This story, U46 Elgin School District, biggest suburban school district in the state, a school board member there who I supported when she ran for school board named Jeanette Ward, she posted a quote from a book written by Jason Riley who's a Wall Street Journal columnist, Fellow to Manhattan Institute, in the order of February being Black History month. From his book, Please Stop Helping Us: How Liberals Make It Harder for Blacks to Succeed, the quote is this: "Blacks have become their own worst enemy, and liberal leaders do not help matters by blaming self-inflicted wounds on whites or 'society'. The notion that racism is holding back blacks as a group, or that better black outcomes cannot be expected until racism has been vanquished, is a dodge. And encouraging blacks to look to politicians to solve their problems does them a disservice." That's a quote from his book that she cut and pasted into a Facebook post. John Tillman: Outrageous! Dan Proft: It has been [inaudible 00:01:30] as outrageous. The school district that's not doing a particularly good job at this moment of managing their finances or educating children. School board members said that was racist, said that was insensitive. They had a school board meeting where they discussed it, and both sides kind of brought in their advocates to debate whether or not this quote from a book that she didn't write, from an African-American intellectual, like Jason Riley, was appropriate discourse. John Tillman: Well, I think what's amazing is the lack of curiosity about the author. I'll bet none of them have ready any of Jason's work which is extraordinary and courageous. And this is a good example of why. Because when you start bringing up this issue and discussing it out in the public–just say nothing if you're white. If you're an African-American, oh, they come after you. They don't want to hear it. Dan Proft: And we're happy to now be joined by Jason Riley. Again, the author of the book Please Stop Helping Us: How Liberals Make It Harder for Blacks to Succeed. Jason, as I mentioned, former editorial board member of the Wall Street Journal, now a columnist and a Fellow at the Manhattan Institute. Jason, thanks so much for joining us, appreciate it. Jason Riley: Thank you. Dan Proft: And so this flap about excerpting a quote from your book, and one of the other quotes that was excepted by this school board member here in the northwest suburban Illinois was, "It's more important to have a black man in the home than a black man in the White House." And this has caused quite a stir among school board members and others liberally inclined in that school district. Are you surprised by this? Jason Riley: Oh no. No, not at all. I mean, it's the sort of discussion about race that strays from the orthodoxy, from what is acceptable in our society today. And the orthodoxy is that all black problems are explained by white racism. And when you inject a personal responsibility into the equation, when you start talking about whether or not black behavior or antisocial behavior or black pathology or black subculture of attitudes toward work or school or marriage or employment have any impact on the black outcomes we see today and the racial disparities we see today, you get your head handed to you. And that's what Jeanette Ward learned recently. John Tillman: Jason, what has it been like for you? I've read your work for a very long time. Long time admirer of it. And at some point, we'd love to have you come to Chicago and visit with us. What has it been like for you to lead on this? Because you certainly have been a leader. What kind of repercussions have there been in your own life? Jason Riley: Oh, I'm hardly–I'm flattered that you would say that, but I've hardly been a lead on that. I'm merely picking up a baton from people like Thomas [inaudible 00:04:12] and Clarence Thomas and Shelby Steele and many others who've been saying these things for decades. They are the true leaders on this issue. But our work is still cut out. I mean, you still see people like Al Sharpton and Jesse Jackson and the NAACP as the media go to individuals and organizations when it comes to speaking for Black America. And one of the reasons I wrote the book and one of the reasons I write the things that I write is to show that those folks do not speak for all Black Americans. That there are diversions, a very diverse set of views–and I encounter them when I go out and talk about these issues. Whether I'm talking to churches or college campuses or so forth. There are wide variety of views on what ails the Black community and how to move forward. John Tillman: What I think, Jason, is so dangerous about this whole sort of mindset is it's almost a form of bigotry in itself. It is a form of bigotry in and of itself of those who are sort of race baiters who are taking Jeanette Ward down. They're really alienating a significant segment of the white population that is all-in and sympathetic to the cause of racial harmony and racial justice. And I think that the danger is you start to actually cleave a coalition across ethnic groups–Whites, Blacks, Hispanics, whoever you want to pick–by the sort of racialization of politics. What's going to happen now with Hilary running in South Carolina and trying to further run with a group identity politics. What do you think of that in terms of the fact that it actually starts to alienate white voters and white citizens who used to be sympathetic to the cause and may not be anymore because they feel like they're–no matter what they do, it's not good enough, they're calling us racist, white, privileged people. Jason Riley: Well, I think that ship sailed many decades ago. Frankly, I think that's what you saw happen after the traditional Civil Rights. Leaders like Martin Luther King left to stay in the Black Power Movement. Came along equal opportunity, turned into racial preferences, and you started breaking up coalitions like Black coalitions or Jewish coalitions that have been together for decades till the first half of the 20th Century. So that ship's sailed a long time ago. And what's happened is the Civil Rights Movement has become an industry. And I tell you: a very, very lucrative industry. But it depends on keeping that narrative out there, that racism, White racism, is an all-purpose explanation for these racial differences and outcomes we see today in employment, in education, in household income, and so forth. And when you stray from that narrative, they come after you. Because it is a very, very lucrative industry so they need to keep that narrative front and center. Dan Proft: Do you see that changing at all as you move down at the age demographic? I mean, I know you've got left wing intellectuals like [inaudible 00:07:02] that's popular among younger African-Americans as well as leftists and intellectuals. But it seems to me–I'll just use Chicago as an example. And you have a broader perspective, you travel around the country speaking and so forth. [inaudible 00:07:17] happening elsewhere. I was talking to an ABC7 political reporter recently, Charles Thomas, who's an African-American gentleman. Been around Chicago for a long time. And he said what's happening in the [inaudible 00:07:28] and everything that's happened in Chicago under [inaudible 00:07:30] five years–the schools melting down–becomes civil society in Chicago, frankly, melting down is that there's different conversations happening in the neighborhoods now that I haven’t heard in 30 years. And he sees at least some segment of the African-American community moving from the Civil Rights [inaudible 00:07:52] case in terms of prosecuting that case–being an advocate for that case–to economic. That, look–he says, "Look, I live downtown and I don't really encounter races. I can do whatever I want." That's not the issue. The issue is economic opportunity, and the conversation's changing in that direction, and that could be a positive thing that provides the opportunity for different coalitions to be built. Jason Riley: Well, I wish I could be as optimistic as some of the folks you've been talking to. But what we've also seen the rise of in the recent years is the Black Lives Matter Movement. Dan Proft: Yeah. Jason Riley: Which is of course built on this crazy notion that there's an epidemic of cops shooting young black men. When we all know that the biggest threat to [inaudible 00:08:41] Blacks are other Black criminals. I mean, I know something about growing up Black and male in the inner city. And it's not that tough to avoid getting shot by a cop. It's much more difficult to avoid getting shot by other young Black men. The leading cause of death for young black men in this country is homicide. And it is not because cops are shooting them or because the Ku Klux Klan is driving through Black neighborhoods spraying them with bullets. These are other young Black predators, and they are preying on Black people. Primarily poor Black people. But you have a Black Lives Matter Movement out there pushing an entirely different narrative that has no [inaudible 00:09:25] in reality. And it's got [legs? 00:09:28]. I don't think it's going away anytime soon. You saw the way the Democratic candidates for President were lined up and told to say Black Lives Matter and they did? Dan Proft: Yeah. Jason Riley: And the White House opened its door to dealing with the leaders of this movement? This is also what's going on. So I feel some optimism on things like education. Charter schools disproportionately are helping low-income Blacks who need better childhood education [inaudible 00:09:56] Blacks are realizing that. But see that movement gaining some strength and that's a [powerful? 00:10:03] development. But this criminal justice issue, I think, is a big deal. And it's not going away, and the wrong side seems to be winning this today. Dan Proft: And now you have DeRay Mckesson, one of the founders, running for the mayor of Baltimore. Jason Riley: Yes. Dan Proft: Isn't that, and won't that be interesting? Jason Riley: Yeah. Dan Proft: All right, Jason Riley, Wall Street Journal columnist, Fellow at the Manhattan Institute. The book, Please Stop Helping Us: How Liberals Make It Harder for Blacks to Succeed. Jason Riley, thanks so much for joining us. Appreciate your time. Jason Riley: Thank you. Dan Proft: Dan Proft back with John Tillman, President and C.E.O. of the Illinois Policy Institute, illinoispolicy.org. And John, I'll tell you what. Crain's is really an interesting outlet these days. Crain's Chicago Business. John Tillman: The progressive business publication. Dan Proft: Right. Or the anti-business business publication. John Tillman: Right. That's actually better. It is the same language but I think yours is a little more expressive. Dan Proft: The irony is lost on them. Sen. Daniel Biss, and one of these intolerable prigs from the North Shore. John Tillman: Did you say prig? Dan Proft: Prig. John Tillman: Okay. Dan Proft: Yeah. He wrote an op-ed [calling? 00:00:51] Texas' policies. I mean, just a second. He wrote an op-ed as an Illinois state senator criticizing Texas' economic policies which, I believe, is the state that's home to six of the ten fastest growing counties in the country, created more jobs since the Great Recession than the other 49 states combined. John Tillman: Right. Dan Proft: This state, the worst governed state in America, we've got a state senator who is criticizing Texas saying, and I'm quoting him: "Texas' achievements are real but they come at a huge cost: Lower wages, less regulation–" as if that's a bad thing, "–and a weaker safety net are causing poverty to rise and the middle class to shrink in Texas." Hmm? So we don't want to pursue the policies that were pursued in Texas, so says Daniel Biss. Well, how about we get a Texas perspective on that? Joining us now is Chuck DeVore. He's the Vice President of National Initiatives for the Texas Public Policy Foundation. Chuck, thanks so much for joining us. We appreciate it. Chuck DeVore: Hey, thanks for having me. Dan Proft: So it seems like the criticism we're referencing from a state senator here of Texas is similar to the criticism that was lodged about Texas when Rick Perry was in the presidential campaign. That, yeah, a lot of the jobs, with their low-paying jobs, you don't have the social safety net with respect to–you have a high percentage of population that's undedicated–all of these kind of poverty and wage-related criticisms that suggest that the Texas economic miracle is a bit of a mirage. How do you respond to that criticism? Chuck DeVore: Well, I love it when folks criticize Texas because it gives us the opportunity to talk about the truth and how poverty is measured in America. Most people don't realize that the Census Bureau, with their 50-year-old official poverty rate, doesn't take into account the cost of living. John Tillman: Right. Chuck DeVore: So as far as they're concerned, it costs the same amount to live in Brooklyn as it does in Live Oak, Texas. Which is [inaudible 00:02:46] ridiculous. And if you take into account the cost of living as well as non-cash benefits–the other thing they don't do is they don't count the value of things like food stamps now called SNAP or Supplemental Nutritional Assistance Program. Right. They don't count housing vouchers such as rental assistance. They don't count that. So when you look at an alternative way of looking at poverty called the Supplemental Poverty Measure, Texas is at the national average. John Tillman: In addition to that, Texas also has many challenges. And that you have this massive immigration of people from all over the country, and of course, you have migration from Mexico. And Texas has done a pretty darn good job of absorbing those people and giving them meaningful work. During this time when you're doing this, your wages are rising. And in fact, I believe Texas [inaudible 00:03:32] overall are manufacturing average household income just past Illinois, traditionally a high-income state, Texas, historically a low-income state. Texas' wages have been rising overall for a long period of time. Isn't that correct? Chuck DeVore: Well, that's correct. And you pointed out an interesting thing about people moving here and opportunity and demographics. There are only four minority-majority states in the country–Texas, California, New Mexico, and Hawaii. And Texas looks an awful lot like the future of America. At least what demographers think is going to happen. So you only have 42% of the population that's white, non-Hispanic in Texas. You also have a lot of people who move here from other countries that tend to have lower-than-average wages. And they're moving here because there's opportunity, just like people from Illinois are moving to Texas. Dan Proft: How important is this kind of rather unique thing about Texas that a lot of people don't know? That its state legislature meets once every two years and basically gets [inaudible 00:04:30]. They're not a professional political class the way that we have here, for example, in Illinois with the highest paid or very near the top of–in terms of salary and benefits of state legislators, and they're seemingly always up to no good. Chuck DeVore: Yeah. Well, I think you're onto something, but it's also about the culture here. I was a lawmaker in California for six years and just termed out. And on a hunch, I looked at the backgrounds of the people in the majority party in the two biggest states–California and Texas. And what I found was about 71% of the majority party in Texas a couple of years ago were businessmen, farmers, ranchers, doctors. Right. People who work for a living on the private market. The equivalent in California was 18%. So 71% in Texas working for themselves or working in the private markets versus 18% in California. Now, in California, in the majority party, it was pretty evenly divided between people who are government workers, community activists, and trial attorneys. So [inaudible 00:05:37] the bigger state in the country. So of course, they have high-progressive taxes and a crushing bureaucracy and all these regulations. Because that's what they're used to. John Tillman: Chuck, you worked for the Texas Public Policy Foundation run by my good friend, Brooke Rollins. You'd be sure to tell her that when I come down there, John Tillman, she owes me dinner. And that you need a bigger office and a huge headquarters building you've just built. She can afford that. Dan Proft: Yeah. Chuck DeVore: There you go. Dan Proft: Especially for all the people emigrating to Texas. John Tillman: Right, right. Dan Proft: I mean, Chuck, you came from California. We were just talking before the segment, Allen West moves from Florida to Texas to get involved in Public Policy there. You move from California to Texas. So it's a magnet for deep-thinking, free-market intellectuals as well, apparently. Chuck DeVore: Well, let's not sell Illinois short. You've got the Illinois Policy Institute which does a bang-up job. And I think the governor in Illinois, Gov. Rauner, really got some good policies if he can only get some support and traction in his legislator. John Tillman: We're working very hard on that. Dan, in fact, is working very hard on that. He runs a superpack, and we hope to see some changes because of Dan's fine work. And the models are very different in Texas. You're trying to prove something, I think, is very interesting that [inaudible 00:06:51] too earlier which is our ideas, the pro-free-market [inaudible 00:06:55] ideas are colorblind, ethnic blind, gender blind. Texas, as you said, minority white is winning over Hispanics, is winning over African-Americans, is winning over new immigrants with the ideas. And Illinois on the other hand is a blue state. We're trying to prove you can turn from blue to purple to red. So very different games. But I think what's going on in Texas is that [inaudible 00:07:14] Hispanic community. Chuck DeVore: Absolutely. I very much agree. Dan Proft: All right. Chuck DeVore, Vice President of National Initiatives for the Texas Public Policy Foundation. Chuck, thanks so much for joining us. Appreciate your time. Chuck DeVore: Thank you. Dan Proft: And maybe, John, you might consider locating the Illinois Policy Institute [inaudible 00:07:31] in Texas. [inaudible 00:07:32] doing your work from there. John Tillman: We've done the analysis. We would save over $250,000 a year in cost if we move to Texas. Dan Proft: That is– John Tillman: Okay, I made up that number, but the idea's the same. Dan Proft: Staggering. Yeah. Dan Proft: Dan Proft back with John Tillman, President and C.E.O. of the Illinois Policy Institute. And John, we touched on it a little bit earlier on the show, Pres. Obama's speech in Springfield to the General Assembly on Wednesday. And let me get into one specific policy proposal he offered up consistent with the idea of the new tone of politics, more civil areas of compromise, bipartisanship–all the stuff that he says but doesn't really believe. At least not in terms of translating into action. But one of those items is redistricting reform. Let's refocus on–districts don't need to look like earmuffs. Right. Picking your constituencies rather than having constituencies pick their representatives and so forth. More competitive elections that will lead to more participations. These are the presidents' words. Well, let's listen to what he said. "Second step towards a better politics is rethinking the way that we draw our congressional districts. Now, let me point this out–I want to point this out, because this is another case of cherry-picking here. This tends to be popular in states where Democrats have been drawing the lines among Republicans, and less popular among Republicans where they control drawing the lines. So let’s be very clear here–nobody has got clean hands on this thing." Including the speaker. I'll tell you what. It was nice to see how much applause that all kinds of ruling class politicians representing gerrymandered districts could muster for redistricting reform. John Tillman: There's so much lie, obfuscation, opaqueness, and just outright flimflammery in that whole refuge is played. First of all, he's trying to present himself as the higher oracle of love and, let's all just get along. Right? It's just so ridiculous. He's been the most divisive president by race, by gender, by generation, by ethnic background, by party affiliation. He's the most partisan president since Harry Truman, a very partisan president, for those who might remember. I don't remember, but I read a lot. Dan Proft: He couldn't export this successful Illinois political culture to D.C. I mean, that's essentially what he said. John Tillman: Yeah. Dan Proft: Illinois, there's no meanness here. But he couldn't get that done in D.C. and that's one of his few regrets. John Tillman: There's two important points here. First of all, the reason he's making this case now is because Republicans control over 30 states. And so on the average, you're just handicapped. But I'm going to be better off if I sort of equalize it. But the more important thing, Dan, secondly, is that the Democrats [inaudible 00:03:07] that every time there's some sort of reform for redistricting, in the end, they still control it. In the end, they gain the system. And the Republicans and the people on the right are just not competent at playing this game because the other side plays for keeps. The right does not. Dan Proft: And so we have a movement of foot in Illinois. The Independent Map movement. It's not exactly the model that I would support, more like maybe the Iowa model or you have computers draw the line based on the criteria the supreme court has set forth–contiguousness, compactness, respect for local units of–community boundaries, essentially, and let the computer draw them and then have what may, you would have a more competitive elections. You'd have an increased number of competitive elections. But this is something [inaudible 00:03:53] been in public office, state, federal level for 20 years. It's an easy thing for him to do on his way out the door. To ring the bell for bipartisanship that he didn't practice and it doesn't really have that much interest to practice. John Tillman: Well, I think that's exactly right. As he starts his Farewell Tour, he's going to be very conflicted. Because on the one hand, he has to make sure he has a successor that will protect his legacy, a Democrat nominee that wins. He's going to have to continue the divisive politics that he has mastered over the last 7 ½, 8 years. So he's going to do that. But on the other hand, he's going to go on this tour around the country and he's going to revert to where he was between 2004 and 2008 with his lofty rhetoric, and let's bring everybody together, and I'm the healer. It's going to be a very interesting dance he does. And whether the Republicans and the people on the right and the middle fall for it. Dan Proft: Well, dispensing with Pres. Obama's falderal– John Tillman: Falderal. Nice. Dan Proft: It's a fun word, isn't it? John Tillman: It is a great word. Dan Proft: Dispensing with that for a minute, the underlying issue of redistrict reform, it's something that Gov. Rauner has promoted. He mentioned it in the State of the State Address along with term limits and [inaudible 00:04:56] kind of his political reform agenda addition to all the structural budgetary and financial reforms, regulatory reforms. So what about that? What about the Independent Map movement in Illinois or some other kind of redistricting reform where the balance of power to change in the General Assembly? John Tillman: We certainly understand the interest in this. We've looked at that proposal very carefully and we're very ambivalent about it. We think it is [inaudible 00:05:23]. One of the things you like to say, Dan, is that it's not broken, it's fixed. Dan Proft: Right. John Tillman: This proposal has fixes in it that worry me greatly that the political class will continue to control the process there. After there are truck who highways and byways you can drive through to prevent the actual goal which is fairness and [inaudible 00:05:42]. Dan Proft: Yeah. And in addition to that, I mean, look. It isn’t part of personnel problem, but one of the things the Independent Map–and I mean it's a cultural problem and not kind of the creative cartography of the Democrats as part of the political cultural problem in Illinois. But it seems to me we focus on–we'll have more competitive elections although you suggest there are highways and byways out of that in this proposal that's being bandied about, and it's worth noting. Mostly by progressive leftists. So that should be a– John Tillman: [inaudible 00:06:09]. Dan Proft: Yeah. That should be of a concern as well. But it's also not just the personnel problem, it's also a culture problem. And so you have seen huge turnover in the General Assembly in the last decade. But that hasn’t changed a political culture in Illinois, in part because you have the same leadership and in part because of the underlying culture. And I think that's a larger conversation we have rather than believing that redistricting reform or even term limits or the combination of the two is going to be some kind of [inaudible 00:06:36] for all the [inaudible 00:06:37] Illinois. John Tillman: You know, we're going to [inaudible 00:06:38] in a few minutes, we're going to talk to Chuck DeVore, from the Texas Public Policy Foundation. He points out the make-up of the legislatures' matters. Do they come from the private sector or are they activists, lawyers, and others who [inaudible 00:06:49] the system. In Illinois, politics is a career choice just like trading is, just like pharmaceuticals are. This is an industry that is profitable. That's not true in some other places. Dan Proft: Yeah. And it's an industry. The only way it's profitable is by making every other industry unprofitable. John Tillman: Right. Dan Proft: Dan Proft back with John Tillman, President of the Illinois Policy Institute. And John, we've got South Carolina coming up. Kind of earth-shattering events in terms of the performance of one Donald Trump and one Bernie Sanders in New Hampshire. And you had an interesting analysis of what you think happened in New Hampshire and how you think what happened in New Hampshire [inaudible 00:00:36] for South Carolina and the rest of the race. Give us your insights in that area. John Tillman: Let's talk about the Democrats first. What I think is so interesting with Bernie Sanders, the people of New Hampshire were feeling the "Bern", as everyone likes to say. Dan Proft: Yeah. John Tillman: It got to 60% 22-point win. Dan Proft: And Madigan can take a shot of Penicillin in [inaudible 00:00:54]. John Tillman: Yes. I think Hillary would like to give Bernie a shot, but I don't think there'd be Penicillin in there. It might be hemlock, perhaps. But the thing that's interesting about what's going on in New Hampshire is he kills her, right? The only thing that's now emerged, of course, is that delegate-wise, they're about 50-50. Sort of interesting. He wins in a landslide and can't gain on her on delegates. Dan Proft: Well, because of the superdelegates. The six superdelegates. Now, they can always flip for Sanders but I mean, it seems to me as you head into New Hampshire, Bernie Sanders couldn't make the argument [inaudible 00:01:21], think the system is rigged for the powerful, for the insiders, and that's–it's rigged against me and it's rigged against you and that's what we're collectively fighting against. John Tillman: I think that's exactly right. That feeds the narrative which is the one [inaudible 00:01:31] that U.S. and news and world report piece that I wrote after the New Hampshire Primary is that both Trump and Sanders are mining the same thing–the discontent of angst and anger among the elector. Both sides of the isle, voters are very unhappy with the political establishment. They feel the game is rigged against them, they feel they're on the outside looking in, they feel the game is all about the insiders, the cronies, and everybody that's making deals, and they want to reject it. I think, Dan, [inaudible 00:01:55] recently had a comment in the Wall Street Journal that the rejection of Hillary and the rise of Bernie is really a repudiation of Obama's seven years. This guy's been here for seven years, she's running as his [inaudible 00:02:07] in continuation of the Obama be the third term. And Bernie is ironically doing the best job of eviscerating the Obama legacy on the Democrat side. I think that's interesting. One of the things you said when were recently at a Hawks game was that Trump's support is inelastic. I thought it was a very good way to express it. What I put in the piece was that Trump–everybody including me used to talk about–he's got a upside cap. And there still may be truth to that, but the point you made, which I think is really interesting that I sort of stole and expanded on in this piece is that he has a floor. With below which you cannot go down below and [inaudible 00:02:44] rather. And then because there's still a big field with their spreading out the remaining 65%, this is perfect for him. He can win as a plurality nominee state by state by state. So in order for this to change, people are going to have to start attacking Trump and not Rubio and other sideshows. Dan Proft: Well, right. But the problem is, of course, I mean, they're in a bit of a trick bag. This is a prisoner's dilemma game. So it's Trump then Cruz, Rubio, Kasich, and Bush. And the best thing that happened for Trump in addition to his win in New Hampshire was John Kasich's 2nd place finish. Because it keeps Kasich and Bush [inaudible 00:03:16] respectable 4th place finish, I suppose. It means 10% for $35M. I don't know. John Tillman: $1,200 [per vote? 00:03:23]. Dan Proft: Yeah. That's a high price to pay but I guess he's got the money. But I mean, it keeps them in. Certainly through South Carolina. Probably through Super Tuesday. And if Trump continues to win the states, that is [current pulling? 00:03:34] level most of the states which is very similar to New Hampshire–I'm at 35 and everybody else is under 20. So they have to fight each other to get to 2nd place so they could focus on Trump because there's this free rider problem–any of them have to go in together as a cartel to say, "No, we're all going to train our sights on Trump." Well, why am I going to train my sights on Trump if I'm not going to benefit? John Tillman: Right. Well, see, I disagree with that now. I think the race is a vow to the point where rather than–which is what Christie did, right? He kills Rubio by eviscerating [inaudible 00:04:05] debate. And then it also killed Christie, which is ironic. Now that wasn't cause and effect but it was a little bit a part of it. Dan Proft: Yeah. John Tillman: But Christie didn't come across–he didn't present his vision. He didn't present what he stood for other than saying, "This guy is not ready. I'm a governor, I am ready." But no compelling case. Dan Proft: Well, although Christie outperforms his polling going into the New Hampshire Primary. John Tillman: Yeah. He went for half a point or two points? Dan Proft: Well, he went from four to eight. John Tillman: Okay, four to eight. Dan Proft: I mean, as compared to Rubio, after Iowa, going from 17 to 10. John Tillman: But my point is–going back to the point about how you fight with each other to be the 2nd place person. Dan Proft: Yeah. John Tillman: I think the race has changed now that among the also [inaudible 00:04:43] between 10% and 16%, one of them will emerge by attacking Trump. In other words, now is the time to go after Trump. And what Henninger said, which I completely agree with, they need to go after him on policy chops. Dan Proft: Right. John Tillman: Visionary policy chops, and dissect the weakness of Trump, that he has no substance and endorse and buy into Trump's anger and angst. And the person best prepared to both of those is Ted Cruz. Dan Proft: Yeah, I think so, too. And he's best prepared to do that in a different way than any other candidates as well. Because he has never really gone after Trump in a personal way. He hasn't attacked the persona, he's focused on the policy difference. And I also think he's the most iconoclastic of the office holders or former office holders so he's seen as somebody who, if not Trump, a lot of Trump supporters would be willing to align with Ted Cruz. Whereas from Marco Rubio, for Jeb Bush, certainly for John Kasich, certainly, that is a much heavier lift. John Tillman: Yeah. He can say with legitimacy his bonafides– "My [inaudible 00:05:47], the people in Washington D.C. the purple establishment, they hate me. They hate me so much, they're thinking of [inaudible 00:05:53] establishment is thinking of supporting Trump. Now, I love Donald, I love what he's appealing to–let me tell you why I'm the guy that you should all rally to because we both are anti-establishments. But let me tell you what I will do policy-wise that Donald doesn't even know how to discuss or debate me on." Dan Proft: Well, right. And here's the opportunity, really, that only exists for Trump because for Cruz because the others are unwilling to really go after their colleagues but they'll go after the GOP-controlled Congress in the way that Cruz and Trump will do. Obama's last budget. Why has debt more than doubled under Pres. Obama? And he continues to pile on more taxes and more regulations and more profligate spending as is exemplified in the last budget he just presented. It's not just because of Pres. Obama. It's because of this go along Republican Congress that if I'm Ted Cruz, I have stood a [inaudible 00:06:46] telling Mitch McConnell he's a liar. Nobody else is willing to do that. And for Donald Trump, they're all part of the problem, Ted Cruz included because they're all members of Congress. So those two are uniquely positioned to continue this line of attack that a good percentage of Republican primary voters ascribe to. John Tillman: Absolutely. I think I haven't actually heard that argument made up because that's a very good one. Because what the other argument you get opposite that is, "If Cruz becomes president, he can't get along with the Republican majorities in the House in the Senate." Things have a funny way of changing when you have the bully pulpit [inaudible 00:07:16]. Dan Proft: Yeah, yeah. The bully pulpit and the associated– John Tillman: Power and money and all the rest. Dan Proft: The pen and the phone, as a president once said.

 

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