Fighting Cultural Colonization

Representative Jeanne Ives is taking heat for standing up to cultural bullies in our schools. Tiny Dancer sues the federal government for trying to make him follow federal law. Will Gov. Rauner follow suit and sign sanctuary state legislation? No action on K-12 school funding this week as IL Senate Democrats are out of town for the coronation of one of their own. Pope Francis calls it "terrible" that children are taught they can choose their gender. Don't tell Chicago Tribune's Kim Janssen who identifies as a "reporter." Dan & Amy covered education funding, sanctuary cities, and Illinois politics with State Representative Jeanne Ives.


Bipartisan Bailout Of Energy Companies Would Be Another Hit To IL Manufacturers

Dan Proft & Amy Jacobson talked with Steve Rauschenberger, President of the Illinois Technology and Manufacturing Association, about the creation of manufacturing jobs (or lack thereof) in the past 8 years. Since the recession, Illinois has only created 20,000 new jobs while neighboring states like Michigan have created almost 9x as many. 

Related Content

Attorney For Individual A In Hastert Case Explains Civil Suit For Rest Of “Settlement” Money

Dan Proft and Amy Jacobson interview Kristie Browne.

View full transcript

Dan Proft: Good morning, Dan and Amy. So another ignominious chapter in Illinois political history comes to an end, of sorts, today, when Denny Hastert is sentenced in federal court. Amy, you’re going down there scalp a couple tickets; see if you can get into the hearing, right? Amy Jacobson: Yeah, I was there the first time and I reserved my seat, yes, for today’s hearing, but if you’re not there at a certain time, you’re going in the overflow room. It was a zoo last time around and I can imagine it’ll be the exact same this time around too. Dan Proft: Yeah, if you’re going to follow politics in Illinois as a reporter, you really need to buy a season pass to the federal court building, to make all of these appointments. And prediction, I think Judge Durkin is going to give Denny Hastert real jail time. I think he is going to do the unusual thing of discarding the plea agreement and the sentencing recommendation of prosecutors between 0 and 6 months, and I think you’re talking about 3 or 4 years in prison for Dennis Hastert, which is the minimum threshold for justice, in this case, in my estimation. Amy Jacobson: But don’t you think he’ll get 5 years? I mean, that’s a possibility too. That’s the most he could get. Dan Proft: It’s a possibility. Possibility, but he’s going to get real jail time; it’s not going to be home confinement. It’s not going to be a few months; in my best guesstimate. But there’s the other matter that was raised this week, that’s the civil case recently filed against Denny Hastert by “Individual A”; “Individual A” was the individual Denny Hastert was paying for past transgressions to keep “Individual A” quiet. And he was doing so apparently in a way that did not run a foul of the law, at least according to law enforcement and federal prosecutors, because they’ve not accused “Individual A” of extortion. Now “Individual A” has only received half of the three and a half million dollars that was agreed upon, apparently, between “Individual A” and Denny Hastert; has filed suit to get the rest of his money, and how that suit will proceed and how it will fair are very interesting legal questions, and for some indications on those matters we’re now joined by Kristi Browne. She is a lawyer with the Patterson Law firm, and she is representing “Individual A” in the foresaid civil case. Kristi, thanks so much for joining us, we appreciate it. Kristi Browne: Good morning. Dan Proft: Good morning. So explain this civil case in which your representing “Individual A”, because, from an outsider’s perspective, the whole arrangement between “Individual A” and Denny Hastert seems like it’s walking a very fine line between a legitimate contractual arrangement and extortion. And so, could you give us the background on what exactly was the nature of the deal between the two? Kristi Browne: It was basically an agreement to compensate my client for the injuries that he suffered as a result of Mr. Hastert’s activity. So it was similar to the settlement of a personal injury case, and like many settlements, it included a confidentiality provision. My client honored the contract in both respects, he didn’t file a lawsuit, he didn’t go to the press, and now he’s just looking for Mr. Hastert to honor his end of the bargain. Amy Jacobson: So “Individual A” has received 1.7 million dollars so far; you want the rest of the money. Did they sign an actual agreement, and was it notarized? Kristi Browne: They did not sign a written contract. That was at Mr. Hastert’s request; he didn’t want anything to be in writing. So it’s in oral contract between the two. Dan Proft: And the likelihood of success – I mean, is Denny Hastert, after this legal process, going to be effectively judgment-proof? Is there real hope that he will have the kind of assets left that are required to satisfy this agreement between “Individual A” and Denny Hastert after he’s sentenced today? Kristi Browne: That certainly I hope. We don’t have any inside information of Mr. Hastert’s financial situation; and certainly his attorney hasn’t reached out to us at all, let alone reach out to us to tell us that he does not have any assets. Amy Jacobson: How did Denny Hastert meet “Individual A” and what did he allegedly do to him? Kristi Browne: How did he meet “Individual A”? Mr. Hastert was a longtime family friend of “Individual A” ‘s family, and I’m not going to go into the details of the abuse. I think those details may or may not come out in court. They will if necessary, but I don’t really think it serves anybody so I subdue my interest to go into those details. Amy Jacobson: And speaking of court, “Individual A” has chosen not to go to the sentencing hearing today. Is he going be watching from a distance, or are you going to be calling him to tell your client what happened? Kristi Browne: I don’t know whether he’ll be watching from a distance. I certainly will be paying attention to what happens in court today, but I don’t want to go into any communications that I might have with my client. Dan Proft: Was there any - I know “Individual A” spoke with federal prosecutors, that seems fairly clear – was there any agreement, any provision of immunity ever granted “Individual A”, or was any question of “Individual A” ‘s conduct with respect to this contractual arrangement, so to speak? Was that never in question? Kristi Browne: It really was never in question. When the FBI first began investigating, Mr. Hastert did accuse my client of extortion and the FBI and the prosecutors investigated that. They had Mr. Hastert wear a wire in conversations with my client, and they concluded that it was not extortion. So there really was no concern with regard to immunity from the beginning. Amy Jacobson: Does your client individually want Denny Hastert to go to prison, or go on probation? Has he said? Kristi Browne: He really just trusts the judicial system to do whatever is the appropriate sentence in this situation. You have to keep in mind that Mr. Hastert is not being sentenced for the abuse. He’s being sentenced for the financial crimes. And so it’s a little bit different. Dan Proft: Does he ever have any intentions – “Individual A” that is – of coming forward and dispensing with the cloak of anonymity? Kristi Browne: No. Amy Jacobson: And why not? I know he’s had several offers; I’m sure you fielded several phone calls for him to come forward, but how has this affected his life and made him the person that he is today? Kristi Browne: Well, he’s an extremely private person and really has never sought out publicity, does not want to come forward publicly. These matters are extremely personal, embarrassing to anybody in his situation and difficult to deal with; the abusive… I’ve seen some long term psychological problems and he still struggles with those today. Dan Proft: What was the impetus for individual aid come forward and communicate with Denny Hastert such that this arrangement was struck? I mean, why didn’t he do it back when Denny Hastert was speaker of the house, or when he was a member of congress? It seems like there was significant time that elapsed between the abuse and the arrangement. Kristi Browne: And I think that’s not uncommon with abuse victims, particularly people who are abused as children. I feel a delayed reaction is pretty common in that’s essentially what happened here. Dan Proft: But in terms of the delayed reaction, what was the impetus for him to ultimately confront Denny Hastert about the abuse and strike this deal? Kristi Browne: I think like many abuse victims there was a lot of self blame and feeling like he was at fault for what happened, and not really recognizing that what happened was abuse. And eventually, prior to coming to Mr. Hastert, he came to the realization that this was in fact an abusive situation and that’s when he came forward. Amy Jacobson: Is “Individual A” the one who called in to C-Span, and said “Hi, Denny, do you remember me?” Kristi Browne: I don’t think so. Dan Proft: I wonder, did “Individual A”, in the communication with investigators and federal prosecutors, did he point them in any other direction in terms of other victims? Is he friendly with, does he know other victims of Denny Hastert’s? Kristi Browne: I’m not aware that he pointed them in the direction of any other victims; at the time, remember, the investigation wasn’t really an abuse investigation, as much as it was an investigation in the financial crime. Amy Jacobson: So “Individual A” was a family friend. He wasn’t part of the wrestling team, nor part of the Explorer’s Club. Did he go to the Bahamas with him? Kristi Browne: He did not. He was part of the wrestling team, but at the time the abuse occurred, it was the summer after his eighth grade year, so he wasn’t in high school yet. Amy Jacobson: And is “Individual A” still living in the area, and has he moved on? Is he married, does he have a family? Kristi Browne: I’m not going to comment about the specifics of his life; as we’ve indicated in the complaint, he still resides in Illinois. Dan Proft: And next steps in the civil case, where’s this in process? Kristi Browne: Well, it will take about 30 days before Mr. Hastert has to respond to the complaint, and once you see that response, we’ll be able to move forward from there. Dan Proft: Alright, she is Kristi Browne, she’s an attorney representing “Individual A”, who is the gentleman with the financial arrangement with Denny Hastert that has been so widely reported. Kristi Browne from the Patterson Law firm; thanks so much for joining us. Appreciate it. Kristi Browne: Thank you.

Related Content

Is Math an Opinion? IL Policy's Ted Dabrowski on Public Sector Salaries and Pensions

On this edition of Against The Current, Dan Proft is joined by Illinois Policy Institute Vice President of Policy Ted Dabrowski for a discussion on public sector salaries and pensions in the City of Chicago and the State of Illinois in K-12 education, at the collegiate level--like explaining why an U of I administrator makes $900k--and for public safety personnel. Dabrowski frames the choices Illinois families and policymakers alike face and suggests the way back from the fiscal abyss for the worst-run, worst-rated major city and state in America.

View full transcript

Dan Proft: Thank you for joining us on another edition of Against the Current; coming to you from the Skyline Club, on top of the Old Republic building in downtown Chicago. My name is Dan Proft, and our guest on this episode is Ted Dabrowski, who is the Vice President of Policy for the Illinois Policy Institute, the Free Market Think Tank, economic liberty orientated think tank in downtown Chicago. Ted, thanks so much for joining us, appreciate it. Ted Dabrowski: Thanks for having me. Dan Proft: There’s a lot to talk about. You’ve got judicial decisions, as relates to pensions, both at the state level, with regards to Chicago pensions coming on the heels of Illinois Supreme Court’s decision from just a year earlier on state pensions, and then you’ve got the Supreme Court decision because of these Scalia absence on the Friedrichs v. California Teachers Association, as it pertains to forced union dues; that’s a lot to talk about against the backdrop of the second teachers’ strike looming in less than four years, and an almost junk-rated city of Chicago, according to Fitch, mostly because of the inability to solve the pension problem, combined with a junk-rated Chicago public school system, combined with the state, that has the worst credit rating in the United States. So, some challenges I think is a fair assessment. Ted Dabrowski: Some pretty big challenges. Dan Proft: Yeah. So why don’t we start with Chicago public schools, and the looming teacher strike over the teachers’ unwillingness to increase their contribution from 2 percentage points of the 9 percentage points they pay into the pension system to not have the Chicago Public School System pick up the other 7 percentage points anymore, as it’s been the case for the past 3 decades. Of course, the management side wants them to pick it up, so they can start trying to make the math work, and the teachers don’t want to essentially take a pay cut to increase their contribution to their pensions. Why is the teachers’ position unreasonable? Why should they pick up the 7 percentage points that the school system has been picking up for these past 3 decades? Isn’t that just another promise that was made to them, like they say, the Constitution made a promise to them and it shall never be changed? Ted Dabrowski: It’s another perk that Chicago teachers have had for a long time. It was gained back in 1981, and the issue, I think, the bigger issue is that the Chicago teachers do pretty well when you compare them to big cities across the country. They have the highest salaries of any big school district in the nation, and so what’s amazing is… Dan Proft: So higher than New York, higher than California, higher than L.A, higher than Houston. Ted Dabrowski: Higher than Miami, etcetera. So, they do pretty well, and again, it’s something they’ve negotiated, but they’ve done well, and included in that is this teacher pension pickup. That’s fancy words for, “Look, teachers, you don’t have to pay your full pension share, full pension payment you’re required to pay. We, the School District, which means tax payers, will pay it on your behalf”. And that’s been going on for about 3 decades, and the School District is broke, any way you look at it, it’s broke. And so CPS, Claypool and others trying to fix the problem are asking the teachers just to pay their fair share. Dan Proft: And by the way, I had the opportunity on the morning show that I do on AM 560, Chicago’s Morning Answer, to speak with Jean-Claude Brizard, a couple of CPS superintendents ago; this is not the CPS superintendent that’s going to jail, for those of you scoring at home, but they were running billion dollar budget deficits when he arrived as Rahm Emanuel’s first Chicago Public School superintendent. Nothing has changed in the intervening 5 years; in fact, it’s gotten worse, so do we start with the pension pick up and the distribution of who’s picking it up, or do we start with the fact that 9% paying into your pension, that’s also insufficient. Ted Dabrowski: Right, that’s insufficient. I think that the bigger issue is that the School District has been mismanaged for a long time, and you’ve got issues from not funding pensions for nearly a decade, you’ve got issues of Barbara Byrd-Bennett being indicted for fraud. You’ve got a situation where you’ve got a Teachers’ Union that’s willing to strike two contracts in a row, and they’ve won the last contract. They won big; they strike, despite the fact that the city, or the district, was already billion dollars in the hole. They had no business striking then, and they have no business striking now. So really, what you’ve got is a situation… Dan Proft: But they strike because… they struck, they won, so they’re not incentivized to do anything other than strike if they don’t get what they want, because they figure that the politicians will bend over… Ted Dabrowski: Like they have… Dan Proft: Like Tiny Dancer did four years ago. Ted Dabrowski: And he’s even weak. If he was weak then, he’s even weaker now, given the situation he has at home. So this is a situation where the two big groups, the Administration and the Teachers’ Union, they collude when they need to, they strike when it makes sense to then, and in the end it’s all the kids who get left out, and I think that’s the whole sad part of the story, which is why many people talk about bankruptcy. If Rahm Emanuel doesn’t want to do something about the finances, if Karen Lewis doesn’t want to do something about the finances, let it go bankrupt, and finally get a situation where we can get a focus back on the kids and not on the adults. Dan Proft: Well, that’s what the Governor said, Governor Rauner has said, “Bankruptcy needs to be something that the city and CPS take under consideration”. They’ve rejected that because of course, nobody wants to be the person, or people in charge, right, to be taken over by the state, to go bankrupt on my watch; what does that say about my leadership and my management; making the tough decisions to bring us back from the precipice, just rather than pushing us over. So why not – and this is more of a political question than a policy one – but from Governor Rauner’s perspective I’ve offered to pitch in and help. I’ve offered, here are some options, and by the way, I have kind of a 30 year track, because the reason I’m 100 millionaire is because I’m pretty good at reading the balance sheets and understanding what the real world options are, and if they don’t want to entertain real world options, why not just wash your hands and just say, “Okay, geniuses, okay, Tiny Dancer, okay Karen Lewis, whatever, Forest Claypool, you figure it out. But you can come down to Springfield with your pickle buckets and panhandle outside the Capital, and we’re not giving you anymore money”. Ted Dabrowski: Yeah, and I think politically that’s where it goes. I think that’s where it goes, and the sad part is – and I think everybody knows this – is that, you know, we just had a massive property tax hike in Chicago; the largest on record, and that only solves a small part of the problem; we probably need to have another two of those to try to start getting toward balance, and so the sad part is that Chicagoians are already burned with all kinds of nickel and diming fees, and red light… you know, anything you want to talk about, there’s a fee or a tax for it. Chicagioans can’t afford more, and we’ve already heard about people leaving the city. Dan Proft: But at least Teachers’ Union is honest about… I mean, I give them credit… they’re kind of like Bernie Sanders; they are like the honest socialists, as opposed to the disingenuous socialists. Property tax increase – sure. Chicago Teachers’ Union is on board for that; Karen Lewis – yeah; Graduated State Income Tax – yeah; fine. Ted Dabrowski: Financial services is back. Dan Proft: Yeah, on Nassau Street, on the exchanges, financial transactions – good. They’re contemplating the institution of a new city income tax to layer on to all the other taxes – we’re open to that; all they care about is the revenue side; at least they’re genuine about it, so you can have an honest conversation. Tiny Dancer and the Chicago Democrats trying to cling to power, they understand the political difficulty of that, because they have to stand for election outside of 30,000 teachers, and so they play this game like something can be solved by getting a half of billion dollars every other month from the state of Illinois. Number 1 – it doesn’t solve it; number 2 – it’s not going to happen. So do you give the Teachers’ Union at least credit for being honest, so we can have an honest conversation? Like here is where they want to solve the problem; that’s one option. Confiscatory taxation on top of confiscatory taxation; and here’s another option, like you and the Illinois Policy Institute have charted, that presents a real choice for Chicago residents and Illinois residents to consider. Ted Dabrowski: I think you’re right, they are, to say, honest about their motives with you, and Karen Lewis is pretty clear about it, but I think that’s why we call them the most militant union in the US. They say what they want, they strike for it and they go for it. Dan Proft: And they unironically wear red shirts to their rallies. I mean, beat me over the head with a cudgel, I get it. Ted Dabrowski: I think the saddest part for me – and the parents haven’t figured it out yet – still the parents are still backing with the Union. In the first strike they did it still seems like they have backing, but at some point that’s going to break, and when people realize that those strikes mean bigger and bigger taxes, increase in property tax, especially for the low income families, right, because they may not pay property taxes because they’re owners, but they certainly pay higher rent; they certainly pay higher sales taxes, higher X, Y and Z, and at some point there’s got to be a connection. Dan Proft: But those are the unseen costs that they don’t kind of…are people connecting the dots. Because it seems to me what Karen Lewis is good at doing – and to some extent, Rahm is good at doing as well – is presenting it like Rahm and Karen Lewis are on the opposite sides. They’re not on the opposite sides. They’re fighting over who gets to be the central planner in charge, right? And so the free market perspective of the economic liberty movement, to some extent has to also bear some culpability for not charting a third way, and explaining to people that you’re getting played by both sides. They’re not looking out for your best interests, and they don’t have a plan that solves this without imposing additional duress on you, on your children, on the taxpayers read large, so that the city continues to shrink and the number of revenue producing wards continues to winnow, and we continue the death spiral to a place that you’re not going to be insulated from in terms of pain. Ted Dabrowski: No, I think you’re right, but these guys have always worked together. That’s why I said they collude. They’re like two monopolies, or an oligopoly, and they work together pretty closely; they choose to fight every once in a while, but never – and if you think about this, are the discussions and the fights about better outcomes – we don’t hear much about that; it’s all about who’s going to win the power struggles; whether it’s Rahm or there’s Karen Lewis; whether it’s Claypool, whether it’s Rauner in the takeover; but nobody’s talking about how to help the parents win. And what you’re right about is that really this is a battle over who controls billions of dollars in salary, and billions of dollars in pension payments. And Rahm loves to be in control of that, and so does Karen Lewis. Dan Proft: I know, the 6 billion dollars CPS budget; what is it, a third of it is salaries? Ted Dabrowski: Oh yeah, you’ve got over 2 billion, sure. And so that’s the control power, and so when we talk about, and you’re right, the free market movement that hasn’t done a great job in Chicago, in Illinois, about saying “Hey, it’s time we take the power out of Rahm Emanuel; it’s time we take the power away from Karen Lewis, and give it to the families; let them be in control of the dollars, and let them hold schools accountable”, and by that I mean the parent would have the ability to walk away from the school and use that public money for a private school, if he/she wasn’t having their kids’ needs met. Dan Proft: Or a public school. Ted Dabrowski: Or a public school. It could just be give them the power to walk, and when the parents have that power, then the public schools would have to listen. Dan Proft: Well, you say, you know, the parents side with Karen Lewis and the Teachers’ Union; well, that’s because they experienced the teachers. Right, their kids experienced the teachers, and so they like Mrs. Smith, who teaches 4th grade, and they like Mr. Jones, who teaches 8th grade. They know those two, so when Mrs. Smith or Mr. Jones or their local school principle says, “Are you going to throw in with me, or are you going to throw in with that little cleptocrat on the 5th floor of City Hall?”, that’s an easy choice. Ted Dabrowski: It is, but I think, though, more and more teachers are starting to realize; and if you’re a 35 year old teacher and you hear the arguments going on, you say, “Wait a minute, is there going to be a pension for me? I’m going to contribute for years; will there be a pension for me?”, and I got a call yesterday, as a matter of fact, from a teacher; she’s 67, retired from CPS, lives in the suburbs, and she’s scared to death whether her pension is going to be cut totally. Dan Proft: When did she retire? Ted Dabrowski: She retired just a few years ago. Dan Proft: So about the average age of 63, which is like the average age of a CPS teacher retiring? Ted Dabrowski: The average retirement age is closer to 60, so over half retire in their 50s, and you’re hitting on a good point, Dan. The reason these pensions are so expensive is because the average worker who works there is retiring in their 50s, most of them with full benefits, and because they get automatic costs for living adjustments, those pension benefits double after 25 years. It’s a fantastic gig, and it’s something that tax payers can’t afford. Dan Proft: Let’s talk numbers, kind of get out of the unfunded liabilities and the billions, and this and that, that don’t mean anything to most people, and you can’t kind of distill down to something they can’t relate to. Let’s relate it. So the Chicago public school teacher retiring in 2014 with 30 years in max out in terms of pension, what annual pension are they receiving? Ted Dabrowski: About 68,000. Dan Proft: $68,000? Ted Dabrowski: Right. $68,000. Dan Proft: Which is almost 40% more than the medium household income in Illinois? Ted Dabrowski: Sure, close. And you can compared a medium household income; that’s more than one person. Dan Proft: So maybe it’s 25% more than the medium household income in Chicago. It’s still a big number. I’ve looked at the work that you and Illinois Policy Institute has done, and I just want to relate these numbers because they are staggering for anybody that works in the private sector, and frankly, anybody that works. This is IPI numbers – a Chicago public school teacher retiring in 2014, 30 years in will have paid these around numbers, $133,000 into their pension, will receive 2.1 million dollars back, a 15,000% plus return on investment. Ted Dabrowski: And let me just say one thing, that that 133 is giving the teacher credit on having made the full payment, when in fact the school district was picking up… Dan Proft: Would they had made less than 25% of it. Ted Dabrowski: Correct. So it’s phenomenal. These are great returns. Dan Proft: You’re right. So how do we have a bankrupt school system, and a bankrupt city, and a bankrupt… I mean, come on? Ted Dabrowski: And how many people in the private sector have 2 million dollars from having their career sitting there waiting for their retirement? Dan Proft: What’s the private sector counterpart? I think you guys have this too. So if you wanted the average retiree kind of same-similar situated, if you wanted to receive 2.1 million dollars in pension benefits back, pay yourself 70 grand+ a year in retirement, how much would you have had to contribute into your 401? Ted Dabrowski: Around one and a half million dollars, because interest rates are so low, so you’d have to put in a lot of money just to get that. Dan Proft: So in the private sector it’s one and a half million dollars in for 2.1 back; at CPS it’s 133 in for 2.1 million back. Ted Dabrowski: Correct, and this is phenomenal. And it’s not sustainable, I mean, don’t forget the reason why it’s so high. That 2.1 million is because they get that 3% automatic bump in their pension benefit each period. Dan Proft: The cost of living adjustment turned out to be an annuity because that’s seven times the rate of inflation for the last decade. Ted Dabrowski: Correct. And so basically, somebody’s pension benefit doubles over 25 years. It’s phenomenal. Dan Proft: And this is the case – not to get too far field off of teachers and CPS's; that’s really kind of at bar with the strike looming in May – but the numbers for Chicago firefighters, for Chicago police officers, for city of Chicago municipal employees, for city of Chicago laborers, and the laboring public sector, they’re basically the same. Ted Dabrowski: Pretty similar, yeah; of course, Chicago police and fire will be a little higher. But basically it’s the same, and you’re talking about the average career worker getting somewhere in 2 million dollars and more in retirement; and it’s really hard to ask taxpayers who are struggling to pay that over and over again. Dan Proft: And so, when you look at these numbers, the public sector union, a lot of the ranking file, the response is “Wait a second; why are you attacking teachers, and firefighters and police officers? Don’t you respect the job we do?” And even if you say you respect the job that we do, “Hey look, we play by the rules that were set forward by the politicians that set the rules, so why should we take a haircut, when they made a promise and we relied on that promise?” Ted Dabrowski: I think it’s a good argument. Look, I always want to blame the people who set the laws. It’s the politicians who agreed to bad deals. I think everybody fights for their own special interest, whether it’s the Teachers’ Union, or an employee wanting a raise, or better terms, so I think it’s important that we don’t vilify teachers or cops; my kids go to the public schools. I love my kids’ teachers. I think they do a great job, but the bottom line is this is not about that. This is about the state’s ability, and people’s ability, and taxpayers’ ability to pay for these benefits, and so I don’t think we should vilify them, but I think there has to be realization that the agreement, whatever it was… we should meet whatever obligations we made; whatever’s been promised and has been earned we should pay. But going forward we need to strike a new deal, and I think that’s what this whole discussion is about. Striking a new deal that’s fair for the public sector workers, but also fair for the tax payers that fund them. Dan Proft: Yeah, I just want to emphasize that, because this seems to get lost in the conversation; I have the opportunity to talk to and hear from the public sector workers a lot in my radio program, and they don’t seem to hear it when I say “Wait a second, whatever you’ve earned, even if it was a bad deal, you should get, because there was reliance created by the state, you did anticipate these benefits, you earned the benefits, you should receive what you’ve earned. Full stop; however, at a date into the future, certain, like a year from now, there’s a new deal for the existent workers who have not earned those benefits, because they haven’t worked those days in the future yet, as well as for new hires, that is not going to be the same deal that you have now”, and point of fact, don’t we have that with the state employers with the tier 2 for new higher at this point, even at present? Ted Dabrowski: Yeah, so of course, tier 2 is a brand new employee, but I think what we’re saying is that for even existing employees – and this happens in the private sector every day. The private sector can’t take away benefits you’ve already earned. That would be a huge problem, and that shouldn’t happen here in Illinois either, at the state or city level. But going forward, we have to have a deal that allows the state budget, the city budgets – because we haven’t talked about cities; this is a huge problem all across Illinois with pensions for firemen and policemen… Dan Proft: And nationally. Ted Dabrowski: And nationally, of course. It’s a huge problem everywhere, and it’s pushing up property taxes – I’d like to talk about that in a minute, about all the taxes that are going up, but at some point there has to be another deal, because here’s the issue; right now you and I are saying we want to protect benefits we’ve already earned; if we ever go into bankruptcy courts, federal courts don’t care about state Constitution; federal courts trump the state Constitution, so like you saw in Detroit, like you’ve seen in Alabama, like you’ve seen in Rhode Island, pensions have been cut as a result of bankruptcies, and so if the public sector union workers don’t finally realize that they can actually have their pensions cut under bankruptcy, they’re going to get hit with exactly what they don’t want to see. Dan Proft: So many of them are listening to their public sector union bosses, rather than looking at the math and just taking a common sense approach to it to say “Do I really want to pay Russian roulette with my retirement?”. It’s not roulette; it’s Russian roulette, because all it takes is one federal bankruptcy judge to say, for example, “Yeah, states cannot go bankrupt under federal bankruptcy code”. But if pension funds go upside down and they can no longer pay out beneficiaries, then I’m going to say that pension funds are separate and distinct from the state, and instead of checks in the mail you get IOUs until they figure it out. Ted Dabrowski: Or you have a 15% - 20% haircut. And I think that’s a real distinct possibility. That’s why I think at some point, and I think the state ruling recently that came out last week… Dan Proft: This is on Chicago pensions. Ted Dabrowski: On Chicago pensions; where it starts to say that things like pension benefits can’t be collectively bargained if there’s some exchange, some consideration given for changes in the pension benefits… Dan Proft: Simple contract law theory. Ted Dabrowski: Exactly. And that being the case, I think behooves the unions. And let’s talk about Chicago policemen and firemen. You were talking about teachers and others. The worst funded pensions in Illinois right now are the Chicago fire and police pensions. They have about 25 cents of every dollar they should have in their account. So imagine, you have your 401(k), you open it up and you think you have $100,000. You open it and there’re only 25,000. You’re missing three quarters of the money. That’s exactly what’s happening to policemen and firemen right now. And I don’t know why they’re not jumping up and down and saying “I want a new deal. I want something better. Promise me what I’ve earned, but give me a new deal going forward”. And I think that’s what they should be fighting for, because they run the big risk of having a massive haircut. Dan Proft: If you have a police fund or a firefighter pension fund that’s only a quarter funded, are those pension funds salvageable. Ted Dabrowski: I think, we’ve run numbers, I think we can salvage them, but it’s painful, right? And you’ve got to have a long term process, but you got end the game now. But effectively, in any private sector scenario, they’re bankrupt; they’re done. They would have been closed up if they were part of a private sector group, they would have been closed, liquidated and gone. So it’s something, I think, they have a huge interest in hitting the table and negotiating. I think the way to look at this, Dan, if we can stop the bleeding now, and move to a new 401(k), stop playing go and forth for all benefits earned going forward, then what we do is we treat the unfunded liability as debt. Chicago just has a bunch of debt and it’s going to take years to pay that debt off; but I think it can work with Chicago’s numbers if we stop the pain. Dan Proft: Then you can start to bend the cost curve and catch up. Ted Dabrowski: Exactly, but it’s not just police and fire, you have to do that for teachers’ pensions and for the other pensions in Chicago, so it has to be a whole deal, because remember, you have one taxpayer in Chicago, and that one taxpayer has to pay all those pensions and Cook County pensions as well, and of course, the shortfall at the state-level; so we have to be careful to respect the taxpayers in Chicago. Dan Proft: It seems to me the taxpayers are starting to understand what is in the offing, and I just look at out-migration; is there any better indication of the vitality of a community, county or state than whether people choose to live there or not, and in 2015, according to the census, Cook County lost more population than any other county in the country; this against the backdrop of the state of Illinois continues to compete with New Jersey for the largest out-migration year after year. Ted Dabrowski: I think that’s the biggest issue, and it’s something that we talk a lot about as respecting the taxpayer. And I don’t think Rahm Emanuel, Michael Madigan, they don’t understand… sorry, they may understand, but they don’t care; it doesn’t fit into the political calculus, but the reality is that people are leaving and I think more telling them the 2015 numbers is the out-migration that occurred between 2000 and 2010 by middle class Blacks. 180,000 blacks were lost during that period, and if you look at what happened in Detroit; first you lost the White taxpayers when you had the White Flight, but the problem really happened in Detroit when the middle-class Blacks left. And then the tax base was gone, and I think Chicago has to start thinking about how to protect its residents – doesn’t matter what color they are – but if you don’t protect your tax base you’re done. And we’re entering that spiral today. Dan Proft: Well that’s interesting, so I have a conversation with my aldermen; I’m in the 42nd ward when, you know, the wards that looks fancy on the outside, and you hear this propaganda from the likes of a Brendan Reilly, who’s just a toady for Madigan and for Tiny Dancer. Well, look at the planters on Michigan Avenue, and look at the tower cranes with new rental units going up in Streeterville. Everything’s on the up and up, and my response to them is, even let’s accept your premise, that this ward, one of 50 wards, is on the up and up; explain to me how you think – let’s say there’s 10 wards, 20% the city, that are kind of revenue producing wards that have substantial economical activity ongoing – so you’re telling me that 80% of the city can burn to the ground around us and we’re not going to be impacted? Do you really believe that? Does anybody really believe that except a craven feudal lord, which is what these aldermen are? Ted Dabrowski: I remember the first time I went to Detroit right after the bankruptcy, and I came back and wrote about it, and the lessons I learned from it, as it relates to Chicago; a lot of pushback, you know, Chicago is not a Detroit. Dan Proft: No, never happen here. Ted Dabrowski: And listen, Chicago’s not a Detroit when you think about the diversification of businesses; you walk down in the loop here, it’s hot, man, it’s rocking, it’s a lot of stuff going on, but I think what people forget is bankruptcy is not about what you look like; bankruptcy is whether you can afford to pay your debts. It’s simply that, and you take the best paid athletes in the nation. A lot of them go bankrupt; they’re making 100 million dollars, but they go bankrupt because they don’t manage their spending, and I think that’s where Chicago is. Dan Proft: Yeah, how can they be bankrupt? They’ve got a nice home, they’ve got a nice car and they wear nice clothes? How can they be bankrupt? How can Antoine Walker – he’s an NBA champion – how can he go bankrupt? Terrible investments; he put his money to use in all the wrong places. That’s how you can go bankrupt. Ted Dabrowski: And I think that’s where Chicago is. Chicago is exactly there. And let me make one other point, and I think this is important. Chicago’s got a big footprint. We used to have 3.5 million people, right? We’re down way below that. The population in Chicago now is below the 1920s. That’s a massive change. We still have that same infrastructure, and I don’t just mean physical infrastructure, like the highways and all that. We have the same public sector infrastructure, and that public sector infrastructure’s not shrinking fast enough with the city. What it’s doing is it keeps growing; the cost of that infrastructure, the unions, the teachers, the police and fire; it’s too expensive. It’s outpacing the growth of what people make in the city, and that’s what’s going to break us. Dan Proft: So you wanted to talk about the taxation that your median Chicago resident faces. Let’s talk about it. Ted Dabrowski: What you see in Chicago is a lot of people saying “Oh, property taxes are much, much lower in Chicago than they are in the suburbs. Dan Proft: Subsidized by commercial. Ted Dabrowski: Subsidized by commercial one, but two, they are relatively lower, but what people don’t talk about is the… you know, Daley was a genius. We all know that. He knew that he shouldn’t go after property taxes, so what he did, and the other who followed, is they came up with a bottled water tax, and a dollar tier tax, then you had to add the red light cameras, they had every kind of tax and fee to hide the fact that the raising taxes on you. And it’s really hard to track what’s going on, so we did all the numbers, and it’s amazing how much higher, when you take all the taxes that there are in Chicago than in any other city – Evanston’s a competitor – but any other city in Illinois, the taxes are tremendously high. So I think there’s a lot of deceit, the press hasn’t wanted to talk about it properly, none of the politicians want to talk about it, but Chicagoians are taxed up the zahzoo, and in the end, middle class families know it; I think, when we talked about the Black families earlier, schools aren’t working for them, crime is certainly hurting them, and taxes are going against them; why stay? And I think that’s a question that people ask themselves. Dan Proft: Sure, and they ask themselves and they’re answering in the negative. Why stay? It makes no sense not to stay. Ted Dabrowski: And it’s not easy for people to leave, right? It’s hard to pick up and leave. Dan Proft: Right, sure. You laid down routes, you made an investment here, it is a great city, it’s a beautiful city, it’s a fun city; great restaurants and night life and arts and culture. Why do I want to leave here? I don’t want to leave here, but you’re making it such as I can’t make it make sense to be here. And frankly, even someone like me - who does relatively well, because I’ve got phony baloney job on the radio that pays me a lot of money and I work 20 hours a week - even me, I say, “Gosh, move over to Northwest Indiana and lower my cost of living by 40%, my muffling it up by 40%? What am I doing here? Ted Dabrowski: You’re hitting on the issue that recently I was in South Chicago, and I met with this company, Modern Drop Forge – they’re a big steel stamp planter, steel stamper – and they tried to stay in Illinois, they worked hard, nobody paid attention to them; this is a year and a half ago; and so they finally looked at Indiana, and Indiana opened their arms, said come here, the company eventually moved there. I was at there, I think I was telling you about this. I went to their new facility, this massive, beautiful huge facility; state of the art, and a lot of the workers who didn’t want to move to Indiana from Chicago, they went and they looked at the house prices and said wow; they looked at the property taxes, much lower; school choice. Dan Proft: And what you get for those numbers in terms of home and property. Ted Dabrowski: It’s a huge home, and he said he took his wife, this worker who didn’t want to go, he took his wife; they moved. And they’re so happy; and I saw him at the new plant, he’s ecstatic, and that’s what people are experiencing, and we shouldn’t force people to look at those alternatives, but I think what we’re doing is we’re making it such that people… people don’t move because their taxes are high. People move because things get difficult, the opportunities aren’t there, it gets too costly; they finally make a calculus and some way say “Hey, I’m going to go somewhere where there’s a new opportunity”. Whether it’s Atlanta, Houston, Dallas, whatever. Dan Proft: Well right, it’s cumulative. It’s not a single tax, it’s not that if I don’t have a city sticker, my fine is going to be like $42,000 to make the numbers work for the city for one year additional. It’s just the cumulative impact of every time you turn around, you’re just being fleeced. Ted Dabrowski: So it comes around to that’s why we need these massive reforms, and until we get them… Dan Proft: Which, by the way, the funny thing is, the other side, that has been unwilling to advance these structural reforms says we need these structural reforms. What did Rahm come in on? He came in on a wave of here’s a tough guy, he was the Chief of Staff to the President of the United States, and he’s going to make these tough decisions. He’s going to endure the political capital that must be spent to make the difficult decisions to bring the city back, to right the financial ship; and he hasn’t done it. Ted Dabrowski: This is Rahm though, right? He was the guy that was going to let nominate crisis go to waste. Dan Proft: The tutu should have been the leading indicator that this was not a tough guy. Ted Dabrowski: A lot of people were excited, and it’s amazing, because he actually did something that is pretty bold when he first came in. He went down to Springfield, and he sounded like he was proposing the Illinois Policy Institute’s ideas. He talked about COLA – Cost of Living Reforms – producing them, he talked about bringing retirement agents down, and he talked about optional 401(k) style plans for workers. That was awesome, he actually went down to Springfield and did that, and Daley didn’t do that, he didn’t go down to Springfield. So there was a lot of hope in the beginning, but quickly, once the negotiations got tough, once Karen Lewis put her foot down, he caved. Dan Proft: Well the 401(k) thing was interesting, because the response you get from a lot of people is “I don’t want to be subject to market fluctuations; I guess it’s okay if everybody else who is not in the public sectors is subject to market fluctuations with respect that they’re 401(k)s, but we want a guarantee, the define benefit plan”, and so the response to that, that we want this guarantee, 401(k) doesn’t work for us, at the university level, this is kind of an under-reported story, but you were the first one to kind of alert me to this. There are thousands of actual university employees, public employees in this state who are part of a 401(k) retirement system within the larger public university system, so number 1 – is it working for them? – number 2 – if it is, why don’t we scale it? Ted Dabrowski: Well, what’s amazing is that somewhere along the way, 1998, not Mike Madigan, but a guy named Robert Madigan, he passed a law that allowed university professors to have a 401(k) style plan. Why? University professors wanted that portability. They wanted to control their retirement fund. They wanted it to be in their name that they could take when they left the state if they left. Now what’s amazing is that we would allow a professor to have that, right, but not a Chicago fireman, a policeman, or a teacher, who should have their ownership, their own title and control over that money; rather than being dependant on Madigan or Rahm Emanuel, these university professors can take their money and nobody can touch it. And what’s interesting about that whole thing is we’re sitting again almost on record highs in the stock market; these guys are doing really well. The money that’s in there is going up, and despite the massive recovery of the stock market, Illinois’ pensions continue to do worse and worse. Dan Proft: The public sector pension funds. Ted Dabrowski: The public sector pensions get worse despite this massive improvement in the stock market. Dan Proft: So I guess the argument would be made, wait a second, if Dan Proft with his financial guy can figure out where to put his money and how to distribute risk and how to have a balanced portfolio, then why can’t a Chicago police officer, Chicago firefighter, Chicago teacher do the same thing? They can do the same thing. I’m no smarter than they are. My financial advisors are no smarter than the financial advisors they could have access to. Ted Dabrowski: They make it so easy now to invest. You just call Charles Schwab, you call Fidelity, and they make it easy. I think that’s the whole thing, you know, public sector employees have gotten so in bed with the government, that they’re letting the government control their lives for them, including their retirement lives, and the government’s made a disaster of that, and people are scared that they may not have a retirement. We argue that the workers should have control; they should have that freedom to control their own retirement account. If they want the state to manage them, let them. But for those who want something different, give them the option; it’s only fair. Dan Proft: I want to go back to the Chicago public school system for a second, because we got a couple of things, a couple of chiblits that are always advanced by the Teachers’ Union, and their acolytes that need to be addressed. One is this idea the state’s not paying; it’s fair share the CPS, that’s the problem. Why don’t we just start there? Let’s do one at a time. So CPS receives a majority of its funding from the state, which is materially different than all the Collar County districts – well, most of the Collar County districts – and for the Collar County districts that it’s not materially different, that are majority funded by the state, they end up – districts like Matteson; low income – they end up subsidizing; so you have low income people in Matteson subsidizing people in Chicago. Ted Dabrowski: Well, let me just hit the first point. We’ve run the numbers, we’re going to be releasing them pretty soon. What Forest Claypool says, he’s using a logic that I don’t think makes sense, but let’s follow him with his logic; he says they have 20% of the students; they should get 20% of what the state doles out, to all the districts; and he says that that’s not true; well, we’ve run the numbers, and if you take the last ten years, including pensions, because he argues that Chicago public school district pays their own pensions, whereas the state pays the pension for all the other school districts; he says that’s unfair; and you could, at face value, agree with that; what Forest Claypool doesn't tell you is that the funding formulas for education more than make up for what the city looses on a pension, so bottom line is that we ran the numbers for the last 10 years; they’ve gotten more than their share every single year in the last 10 years, with the exception of this past year. They’ve gotten more on average than all the other school districts. So they’re getting their share, and I think we’re going to debunk his myth. He has to stop complaining that he needs a state bailout and start focusing on what reforms he can pass in Chicago. I think that’s where he really needs to focus on. Dan Proft: And so let’s just kind of again do this; like a little bit of classroom math – not common core style either, because I don’t know how to do math common core style – but the city of Chicago spends around 15 grand – a little bit north of that, but let’s use round numbers – 15 grand per kid per year. So classroom of 30 – keep it simple – that’s 450 grand per classroom in the city of Chicago; 650 schools, a little bit less than 400,000 kids like it normally used to be, because of the exodus from Chicago; so $450,000 per classroom; the teacher all-in cost the district $120k a year; let’s say you spend another 50 grand on supplies, because that’s 150. It’s a $1,700 per kid for the pension pick up, for the pension costs, so again, let’s round up to 2 grand; so that’s another 60 grand. So it gets me to 210; let’s say we throw another 50 in for the building of the infrastructure and all that – per kid – so that’s 260. Where’s the other 200 grand per classroom in Chicago go? Does anybody know? Because I asked Karen Lewis this question, I asked Forest Claypool this question, I asked aldermen in the city of Chicago this question. Nobody has the answer to this question. And the other thing that’s even more infuriating than not having the answer is nobody much seems to care. Ted Dabrowski: It kind of reminds me, after they closed the 50 schools and – I forgot who did the analysis – but they couldn’t find the computers, they couldn’t find a lot of the supplies, they were gone; and they can’t track themselves. I think the biggest issue was CPS, is that they’re too damn big, right? It’s a monolith, and they can’t manage themselves, and I think that’s the big issue. Dan Proft: So at the state-level or at the city-level, because the dynamics are very similar? Illinois Policy Institute, what’s a path forward? Everybody gets the benefits they’ve earned up to a date certain; what’s the path forward? What does that look in terms of retirement age? Pension contribution, all of the cost of living adjustments, all of the drivers for cost in the system? What should that look like, that is respectful and reasonable that we can potentially afford, that provides that balance? Ted Dabrowski: So let’s come back to that state university retirement system plan that’s a 401(k). That thing’s been around for 17 years. You’ve got about 1700-1800 workers and retirees in it. What that plan does, and the people who are on that 401(k) style plan, they don’t get social security, so the 401(k) style plan they get is robust enough to meet IRS standards, and to give a sufficient retirement. And what it does is the state puts in 7% into the 401(k) every paycheck, and the employee puts in 8%, so every paycheck period, 15% is going into their retirement account. And that’s been deemed good enough, and has been around for a long time, and many people get it. So we think that’s a good basis for creating a plan for all workers, new workers, and for benefits going for choosing some starting date; we think that would be a great start. You know, there could be debates on how to structure it, but we think that’s a really good start because going forward, what it would mean is that all the benefits that have been earned, any worker or retiree would continue to get… retirees wouldn’t be affected by this plan, but all workers would have earned their benefits up to a point, then going forward, everything goes into a 401(k) style plan. So it’s a fair plan, you respect retirement ages, you respect all that, and it does a lot to fix the problem in Illinois. We’ve run numbers and it depends on how strict we are with the terms, but we believe that we can cut the unfunded liability by 30-40%, which is pretty massive, and we can create a repayment plan on the rest of the debt that gets us out of this problem; in 30 years, but in one that there’s control and certainty, rather than the one we have today which is uncertain. Dan Proft: And to repeat just for emphasis, that means you’re not messing with the retirement age, you’re not messing with COLA's, or the other component parts of a person’s employment or retirement? Ted Dabrowski: Correct. I think what you want to do is leave what people have earned, because I think it’s all a question of constitutionality. Dan Proft: But even prospectively, even for the new hires today. Ted Dabrowski: Well the new hires today are looking for 401(k) plans. Dan Proft: Right, but you’re saying “Hey, if you have 30 years in and you’re 50, 55, 60, whatever, because you’ve got the 401(k), we’ve more or less achieved a solomonic balance of – we’re paying 7%, you’re paying 8%; you’re managing your funds; not defined benefit, it’s defined contribution like it exists in the private sectors, to the extent that even those exist in the private sector today – and everybody’s charting their own course. Ted Dabrowski: Right, and then from then on we just manage the debt that we have and the outstanding liabilities, but we don’t keep creating these unfunded liabilities which we’ve seen just keep growing every single year. They grow out of control. It’s like a mortgage that grows every year, rather than paying it down, it just keeps growing and growing, no matter how much you put in it. That would be the example of a home owner. You keep paying down your debt and it keeps getting bigger, and you can’t get control of it. Dan Proft: Right, and it would also obviate the need to make our mortgage payment with a credit card, which is essentially what we’re doing now, to the extent that we still get credit card companies that will issue us credit cards effectively, because at some point the bond markets are going to seize up and they’re going to disallow borrowing, except that usurious Soprano rates, like CPS just did. Ted Dabrowski: Here’s another point I wanted to make. So we talked about this 401(k) style plan already existing in Illinois; so it’s like some pipe dream we have; this is something that’s a legitimate plan that works, and if it’s good enough for our university professors, why isn’t it good enough for anybody else? But it’s not just Illinois that’s done this; we’ve had massive reforms across the country, and Michigan actually started this. In 1997 they moved all their employees to 401(k) style plans; back in 1997. Dan Proft: Michigan, big union state. Ted Dabrowski: Big union state, 1997, and so they got ahead of this long time ago. Let me give you another state that did a big change. They did a hybrid half, pension half 401(k) style plan, and that was Rhode Island. Democratically controlled legislature, they got it passed; big reform, very painful, but they did it. And Alaska has passed in 2006 a 401(k) style plan for new employees, and most recently Oklahoma passed one. So this is something that’s happening across the country. It’s not some dream, it’s happening. Dan Proft: So the question I’m sure a lot of people are thinking is “If it’s happening across the country and it’s working for 17,000 university professors who are not bitching about it – at least we don’t hear from them bitching about it – why haven’t we scaled it already?” Ted Dabrowski: Well, I think it’s been easy for Karen Lewis and others to say the rich aren’t paying enough. All we need are more taxes. And unfortunately, the union members have bought that argument. They’ve bough that argument that the taxes need to go up. There’s a solution, there’s a promise been made; don’t change what we got as a promise, no matter whether it’s 20 years into the future. Let’s just raise taxes to solve our problems, and at some point there’s going to be revolt. It’s not a big revolt, it’s a quiet revolt by people just leaving the state, leaving the city over and over again. Dan Proft: Isn’t that the problem? Again, it’s a political problem, but people leave the state; we essentially have a hollowing out in the city and the state. People that are insulated from bad public policy, the very rich and the very poor, that are beneficiary to the transfer payments, they don’t feel it, they don’t live in the world of trying to make ends meet, and so that’s what you’re left with, and frankly, that’s the constituency of the left. That’s the constituency of the established power structure in Chicago and the General Assembly. Ted Dabrowski: I think the big issue that’s going to continue to drive change are the property taxes. We’re seeing places, like you said, Matteson, and nearby - Southland – communities, where the tax rates on property, so the effective tax rate on a home is about 4-5% of the value. So if somebody would have tried to buy that house today would have to pay the cash for that home, they’d have to pay the value for that home, and within 20 years, because of taxes, they would have repaid for that home again. Dan Proft: So for most people with a 30 year mortgage, they pay for their home twice. What you’re saying is in Illinois and a lot of regions you’re going to pay for your house the third time because of the property taxes. Ted Dabrowski: Exactly, and that’s why people are starting to walk away from their homes in the Southland area. So you got a place where the manufacturing companies have gone. You see the big swaths of land just empty, and you’re starting to see now these nice big homes that have collapsed in value, and people walking away because they can’t afford it anymore. Between the mortgage and a second mortgage being the property taxes, they’re leaving. Dan Proft: And here’s something else I hear too, a lot of small and mid-sized businesses, 25 to 250 employees, they don’t make headlines when they leave, they don’t make headlines when they lay people off, they’re not big enough, but they’re impactful. They represent three quarters of the jobs in the state. They’re just quietly closing up shop, or they’re downsizing, and kind of methodically moving operations somewhere else. And it’s one of those things, like the old kind of sun also rises, how did you go bankrupt - gradually, then suddenly. So it’s kind of the whole thing, it’s like wait a second. Where did all the businesses in Elk Grove Village and the ring suburbs around O’Hare go? Well they slowly moved out over the course of the last ten years. Now how do you get them back? Ted Dabrowski: That’s really hard, and that’s why I always argue that… I talk a lot about the one reform that we can do tomorrow, and it can be agreed upon all the parties as new employees. Move to 401(k) style plans tomorrow. New employees don’t have a contract, they’re not protected by the Constitution, they would just enter with a new contract. Make it a reasonable, fair, 401(k) style plan. Then people would say “That wouldn’t save a whole lot of money”, but I’m saying “It may not save a whole lot of money, but that sure would send a different message than any message that we’ve sent over the last 25 years”; and that would send a message to the rating agencies, that reform is coming, that’d send a message to future employers, people that want to live in Illinois, but we’ve got to send a positive message, and right now there’s no positive message, and we know with the budget flight there’s no positive message. We need a positive message. Dan Proft: I want to level-up one level of education; the post secondary education in universities, we’ve talk about this cadre of university of professors in a 401(k) system, okay, but a lot of the discussion and the consternation in the context of this current state budget impasse is about universities, and they’re not receiving the funding they’ve become accustomed to from the state, and so there’s the prospect of laying off employees, and there’s a protest on campuses, state colleges, universities, and it’s all directed at the state of Illinois; what are they doing, they’re divesting from higher education. Well, it turns out, and this is some good work that’s been done by State Representative Mark Badneck - who’s a Freshman Republican from Oswego, Plainfield area - it turns out that if you do a little bit of comparison, in terms of what the state of Illinois provides in per pupil support, as compared to their conference peers – whether it’s Illinois State in the Missouri valley, or University of Illinois in the big 10 – it turns out we’re providing almost twice as much state support for pupil than the conference peers in other states, and yet tuition at our state schools is still 40% higher than their peers, their conference peers in those states. Explain that dynamic. Ted Dabrowski: Well, we looked at the numbers in higher education, and it’s easy to blame the lack of a budget right now. It’s easy to do that because it’s easy to point the finger at somebody. Dan Proft: That’s why they’re doing it. Ted Dabrowski: And that’s why they’re doing it, and of course, no budget has created a crack, sorry, is showing all the cracks that exist in higher-ed. But this problem has been building for 10 or 15 years or more, right, and a lot of it has to do with how much public funding is making it to education from the federal government and the state. And what these universities are doing is they’re taking all the available money they can find, and they’re hiring administrative staffs that are much too large, they’re bloated, and they’re paying massive salaries and massive pensions. And so when you look at what’s happening, it’s tuition's are having a double, not because education’s doing that much better; it’s all going to fund big, big administrations and super big pensions. Dan Proft: And we saw… we’re talking about the Chicago teachers’ strike in the not too distant past. How about the U of IC 1,100 professorate strike that was just two years ago – 2014. And they wanted to lift the floor for essentially part-time adjunct facility from 30 grand to 45 grand; 50% increase in base salary, and of course, that levels all the way up; we increase the floor here, and that increases the floor at every rung above that. And so how do we get out of that trap? Ted Dabrowski: It’s the same issues we’re talking. We’re talking pensions again. Dan Proft: Well, we’re talking salaries plus pensions. Ted Dabrowski: What happens is that these salaries are high and so what’s happened now is that when you take the state appropriations to go to education, higher-ed, they’ve actually grown a lot in the past decade. They’ve grown about 60% in the last decade; from 2.6 billion to over 4 billion. So it’s a big chunk of change; the problem has been is that 50% of all that money, 50% of what the state appropriates isn’t making it to higher-ed, it’s going to pay for pensions, and I was amazed when we did our work the other day, to find community colleges; community colleges pay their top person $500,000 a year. Dan Proft: You mean like the president of the university. Ted Dabrowski: The president, right. And of course, like you said, all those salaries get scaled up. Dan Proft: Tell us the story just for illustrative purposes, because it speaks to a larger cultural problem. In your research, the white paper that I read that you did in concert with colleagues at Illinois Policy Institute, a $900,000 administrator at the University of Illinois? Ted Dabrowski: Yeah, $900,000. Dan Proft: What the frack does that administrator do that warrants $900,000?! Ted Dabrowski: Included in that was a roughly $450,000 retention bonus after few years. Dan Proft: Okay, so what the frack does that administrator making 400 grand do that warrants a $450,000 retention bonus? Ted Dabrowski: Exactly. That person will probably get somewhere in the range of who knows, 8 to 9 to 10 million dollars in pensions. Think about that money, how many kids, how many scholarships that would fund in a given year for kids that tend Chicago State; that one person. Dan Proft: But they don’t hear, I mean you may hear it incredulously, but you’re going to hear it. Well, you want to attract and attain talents in academia, don’t you? Ted Dabrowski: So you can say that, now the question is, to how many people do you pay that? There’s a great study done by the Illinois General Auditor, and he looked at the number of administrators that these universities have, and it’s amazing. We looked at Chicago State… Dan Proft: This is like the Teldar Paper story, like all these vice-presidents, they just send memos back and forth; I can’t figure out what they do; this is the Michael Douglas moment? Ted Dabrowski: Well, nobody knows what they do, but they’re walking around through halls, but the point was, for Chicago State, they have one administrator for every 18 students. Dan Proft: Not one professor. Ted Dabrowski: No, they have one faculty member for every 16 students. So it’s almost the same number. Dan Proft: One administrator per every professor? Ted Dabrowski: Yes, so you could be sitting in a class, and your professor would be giving you a lesson, and there’d be an administrator right there watching over, making sure things are good. Dan Proft: A supervisor. Ted Dabrowski: You know, and again, a lot of that is because federal mandates, etcetera, but you can’t have that kind of bloat and not expect your tuition's to double, as they have in Chicago state, to the point where – here’s the sad part – the tuition's have gotten so high that you can’t have a kid who wants to work and go to school, because it’s just too expensive. And that’s why they’ve come to rely on scholarships. They’ve come to rely on free money because it’s no longer affordable. If these community colleges were meant for these kids to have an opportunity, why have we priced them out of touch? Dan Proft: So at the post-secondary educational level, where there’s community colleges, and we have some good community colleges, you know, 50 somewhat community colleges that provide… at least you can get your gen-ed requirements knocked out at a lower cost/credit hour at the community college before you go on to a four year university. But what you’re suggesting is that actually that’s not even the case anymore, and oh, by the way, because K-12 education, if so subpar, a lot of the costs at the freshman sophomore post-secondary education level is remediation, you’re paying for high school twice. I mean, if you talk to community college presidents, and university presidents, college presidents in the state, they’ll tell you the one in three kids that are going on at post-secondary education, I’m paying for them to do high school again for the first year, because they’re not prepared to do post-secondary work; so we’re paying for high school twice, and then we’re paying for administrators layered on to kids that are going to post-secondary education, not ready for the work, and then we wonder why the medieval poetry major can’t get a job when they get out of NIU, Illinois State, or U of I, or wherever, or Northwestern, for that matter. Ted Dabrowski: I think you’re capturing the problem really well, and what’s really scary is that not only can’t they get a job, but many of them have debt that they’ll never going to be able to repay, and that’s why you’re seeing these problems, right? You’re seeing trillions of dollars maybe becoming the next big problem in our country, with all this student debt the kids can’t pay back. A lot of it, again, bring it back around, a lot of it driven by pensions. Dan Proft: Fundamentally, if we’re thinking about K-12 education, and we’re thinking about higher education, with the bleak financial picture that we’ve painted, and the systems that have effectively been set up – let’s be just real honest about it – have effectively been set up to pay generous salaries and benefits to the adults in the system, not to educate children and to program for success in life. Ted Dabrowski: The Jerry Jones Program. Dan Proft: Clearly that’s not happening for the majority, then if there was one or two things where you could wave a magic wand at the Illinois Policy Institute and say this is the way to kind of a halt and do a 180, take a step back, and then chart a completely different course, what are those one or two things that get us off this path to ruin that we’re on, and onto a path of fulfilling the mission as stated of K-12 and post-secondary education? Ted Dabrowski: I think K-12 – I’m huge in empowering parents; I’m speaking generally, off course of some great public schools; and there’s people who are dedicated… Dan Proft: As there are at the post-secondary level. Ted Dabrowski: Listen, it’s not that people aren’t dedicated and they don’t care. I think systemically, and I think CPS, I’m sure there’s thousands of teachers and employees that care, I think the system is broken. The system – I’d say – is morally bankrupt. And it’s not going to work, and so until you get into a situation, and again, we’re seeing this happen again, same like we talked about 401(k)s, we’re seeing the same thing for school choice plans. Parents should be given the choice over where their kids go to school, and that’s one super empowering for parents who feel like they’ve been just totally left out of this, and that they think that more money is the solution, rather than being given a choice and control over their children’s education. So I think that’s number one. And we just saw Nevada, all of its 500,000 public school students have been given the choice of a voucher up to that $5,000; all of them. It’s amazing, state-wide, amazing. There’s now 26 states that offer school choice. Why isn’t Illinois one of them? Why isn’t Chicago one of them? Dan Proft: So that’s K-12 at the university level the problem is choice, right? Because Illinois, all the auto makers in the 70's have been insulated from competition, and kids are taking their GI bill, their Pell Grant, their stafford loan money, and they’re not going to school in Illinois. Ted Dabrowski: Right, they’re going outside, and they’re not coming back, and I think that higher-ed is a bigger problem, because it’s also a federal piece to it. You’ve got all that federal money, the schools know it, the schools know that the kids can borrow, and so therefore they raise their tuition and their hiring their jobs program to match that. So I think we need to stop a lot of what’s been happening there, and that would allow the cost come down dramatically; if we didn’t have all these subsidies feeding the cost up; but until we do that, I think it’s going to be tough. With that said, there’s a lot that can be done locally, because we don’t have to pay the salaries that we pay, and 2, we don’t have to have the administrative bloat that we have; and we certainly don’t need to have the pensions that we have. There’s no reason why people are getting 7 and 8 and 10 and 12 million dollar pensions. Dan Proft: So other than scaling the 1,700, go back to the 1,700 person university professors in a 401(k) style program, would you say that the state should starve the beast of academia? And force them to make changes that they’re otherwise not inclined to make, as long as you keep the spigot open? Ted Dabrowski: Well, sadly, that’s what’s happening, right? And it shouldn’t be that way; you’ve got a lot of people in pain now. You’ve got kids who thought they had a scholarship, now they don’t. They don’t care about those problems; then they had to have a plan. You’ve got teachers, professors who thought they had a job; they may lose them. And the way it’s happening now it shouldn’t be happening. It should be the administrations taking control of what they do and running an efficient system, but they’ve never been forced to do it, and Governor Rauner and the budget impasse is making them do that. They don’t like it, they don’t like having a gun to their head, but it’s forcing them to look at their costs, and it’s how it may happen. Dan Proft: So effectively, I mean, this K-12 or university, the common denominator is you have to have families be the accountability mechanism to how their tax dollars are being spent for the experience of their children, they have to be an accountability mechanism for their own local K-12 schools, they have to be an accountability mechanism for the universities they send their kids, for those kids to go onto post-secondary education. Ted Dabrowski: That’s absolutely right, and it’s interesting when you think about Chicago, and this comes back again empowering parents, families, the residents. Not the bureaucrats. When you look at the Laquan McDonald case, right, and you’ve got a Chicago, a police force and or mayor, or a attorney general who can hide information from the public for more than a year. When you have a situation where a school district can strike two times in a row on families; when you have a police force, when you try to take the problems of a Jason Van Dyke and discipline him – the police officer that shot Laquan McDonald, but you can’t use his old history of complaints, there’s a lot of things that the public is not seeing, and they seeded that too much of their power is residence to the Government, and a lot of what we’re talking about today is giving the power back to the residents. Give it back to the families, at least give it back to the people. Dan Proft: He is Ted Dabrowski, he’s the Vice- President of Policy at the Illinois Policy Institute. Nobody does more numbers, reality based research on these intractable problems in terms of the quality of public education in the state from pre-k through post-secondary than Ted and his team at the Illinois Policy Institute. You should read their stuff religiously so you’re empowered with the information they have researched and called to be that accountability mechanism that we’re talking about. Pleased to have Ted Dabrowski, Vice- President of Policy from the Illinois Policy Institute on this edition of Against The Current. Thank you for joining us, Ted, thank you. Ted Dabrowski: Dan, I appreciate it.

related content

Kathleen Murphy discusses the results of the Illinois primary on FOX Chicago

View full transcript

Fox 32 Anchor: We're joined now by Attorney Sam Adam Jr. and Communications Director for the Illinois Opportunity Project, Kathleen Murphy. Thanks for coming in to analyze the results here. Sam Adam Jr.: Thank you. Kathleen Murphy: Thank you. Fox 32 Anchor: We want to start with the GOP race. We've got Donald Trump with big wins, 'Huge' wins I should say, but losing in Ohio, he's got a substantial delegate lead over his closest republican challenger Ted Cruz. So how do you see this panning out? Can Cruz and Kasich catch up before the convention in July? Kathleen Murphy: Donald Trump doubled his lead last night. It was a huge night like you said. I don't think Kasich winning in Ohio, I mean it's nice to win in your home state, but he has won 1 state out of 29. Mathematically he can't do it. Ted Cruz has multiple wins over Donald Trump but the establishment hates him. Right now the GOP establishment needs to decide what they are going to do. Are you going to come in for the guy you hate, but has proven he can win and beat Donald Trump, or are you going to go with the guy you like and feel you can work with but hasn't been able to win anywhere but in his home state. And Governors always win in their home states. They need to make up their minds what they are going to do and they need to do it right now. Fox 32 Anchor: I'm going to throw another question at you Sam. With the winners we say last night, we have Donald Trump and Hillary Clinton presumably as well, what does that say about what Americans want as their next President? Sam Adam Jr.: That's a very good question. We are in a time that I have not seen in my entire lifetime which is so polarizing, so opposite. You have those on the left that really seem to want change, but for government to come in. You have those on the right who really now have moved even more conservative to the idea that government is not going to be part of our lives. We're going to get rid of it as much as possible. IF that means we're going to call people names, we're going to keep people out of the country, so be it. That's where we're at in this country. It's going to be a very interesting race come November if it is Clinton vs Trump. Because you're going to see two polar opposites come head-to-head. With Donald's money and the Clinton name, it's going to be one heck of a fight. Fox 32 Anchor: Talk about an interest contest because we have the republicans declaring Donald Trump the winner in Missouri, still no declared winner for the democrats. Basically a margin on both sides of .2% between the first and second place winners, so it's really interesting in that state. Lets talk though very quickly the democrats as well and the delegate count because we did with the republicans. Kathleen, do you think there's anyway that Bernie Sanders can catch up to Hillary Clinton? Kathleen Murphy: He's giving her a run for her money which I like. I mean who would have thought a 74 year old socialist would challenge Hillary Clinton. I think that is the nature of their race. It's the enthusiasm gap. People are looking for something that is from outside of Washington and we see it on both sides of the isle. It's been a major factor in this race. So I wouldn't count him out yet. I think he can do it. I don't think he could overcome Hilary, but I think he could give her a very strong run for her money. Sam Adam Jr.: He's never going to be able to overcome Hillary at this stage. But what he can do is change the message. He can say 'Listen, this is what American seems to want, at least on the left, and I'll stay in this race and keep my message going, and you need to start coming more toward where we are. You have to understand, once you get in that general election, these people want to hear more of Bernie Sanders out of Hillary.' If he can start changing that message, we're going to have one heck of a democratic side. Fox 32 Anchor: That would be a win for him even if he isn't the nominee, right? Alright we're going to talk about the Cook County States Attorney with you too coming up in the next half hour. Another interesting race here. ------- Fox 32 Anchor: We're joined now by Attorney Sam Adams Jr. and Kathleen Murphy, communications for the Illinois Opportunity Program. Thanks again for joining me. We didn't scare you off the first time. Sam Adam Jr.: No, no, no. Fox 32 Anchor: Ok. Lets start with the race for the Cook County States Attorney. Unbelievable numbers here. Kim Foxx beating incumbent Anita Alvarez in the democratic primary. 58% to 29%. What does this indicate to you both about what voters are thinking here in Cook County? Sam Adam Jr.: Obviously they sent a very strong message here that they did not want Anita Alvarez. I said yesterday, if people come out in strong numbers, big numbers, that Kim Foxx was going to win this race, and she did. I think it sends a very strong message that says 'We need to be heard, we need to have fairness, we are going to make sure everyone is held accountable.' They sent that message to Kim and I think she got it. Fox 32 Anchor: : The endorsements helped as well that she received. Kathleen Murphy: Yes, absolutely. This was a bad night for Rahm Emanuel actually. This was a referendum on him. 2019 is not that far away. It was a proxy war between the establishment and the anti-establishment and the anti-establishment won. Fox 32 Anchor: Kathleen can you tell us a little bit about who Foxx is going to be facing in November? Her republican challenger. Kathleen Murphy: Of the 4 who were in the field, I think he was the most qualified. He's a 31 year criminal prosecution attorney. He has a background as a teacher, he's a certified teacher. I think republicans should advance the guy. Clearly there's an appetite for reform in the city with this victory and I think republicans should start to advance the case for something that is substantially different. Fox 32 Anchor: Something to keep in mind, Kim Foxx did not win it all outright. She still has a republican challenger in November. We want to transition to the race for US Senate. Congresswoman Tammy Duckworth beating her democratic challengers Andrea Zopp and Napoleon Harris. Incumbent Senator Mark Kirk beats his challenger James Marter on the republican side. So we have a Kirk vs Duckworth battle for November. I know you guys went all out on this yesterday, but I'm asking you the question today: who wins? Sam Adam Jr.: Oh, definitely Duckworth at least in my opinion. She's going to pull that out. I think voters cannot get behind Mark Kirk anymore. I think they don't want to be behind him. Tammy Duckworth is coming in, adding a fresh face. She has a message. She's run a very clean campaign. I think it's going to continue to be a very clean campaign. I think the Senate needs to be definitely diverse and she's going to be bring some of that as well. I think she's going to be able to get all of the voters behind her. She's going to Washington. Fox 32 Anchor: Kathleen, I know that Mark Kirk saying in his victory speech last night that he's been consistently underrated in the polls. So can he pull out a win? Kathleen Murphy: No. He has done nothing for his face. He voted against defunding Planned Parenthood. He voted against school choice. He's anti 2nd Amendment. What is the difference between him and Tammy Duckworth? Why would anyone who is interested in policy agenda that he is advancing vote for someone with an R behind their name? He can't beat her. ------- Fox 32 Anchor: Now we're joined by Attorney Sam Adam Jr. and Communications Director for the Illinois Opportunity Project, Kathleen Murphy to talk about what's going on politically, especially at the national level right now. Thanks for coming in guys. Sam Adam Jr.: Appreciate it. Fox 32 Anchor: Lets start with you Kathleen. Is there anyway of stopping Donald Trump right now. Certainly the idea that he can't capture the delegate count he needs to secure the nomination before the convention suggests that the stop Trump folks have some hope to get something done at the convention. Is that realistic? Do you see that happening? Kathleen Murphy: He seems unstoppable. He doubled his delegate lead last night. The story out of last night was that the Washington establishment is lost. They have been beaten badly. Washington politicians, republican politicians, have been weak, they have been cowardly, they have broken promises immigration, on Obamacare, on spending. The people who are looking at this race, who's quality of life has been declining for years now who have supported them, want something substantially different. Donald Trump is substantially different. I don't like him, but he makes people like, with him in the White House, they can take control of their lives again and they can improve their futures. That is a very attractive message right now. Fox 32 Anchor: Sam, talk to me about Bernie Sanders. The Michigan magic was saw last week was not in evidence last night. Why? Sam Adam Jr.: I think that people believe Hillary can win an overall election. Bernie is resonating, don't get that mixed up here. Exactly what she's talking about on the republican side is happening on the democratic side. There are people who want to feel as if their politicians are about them. That it's no longer about Washington and doing things for themselves. Bernie makes you feel that way when you listen to him. He says 'Look, I know who to blame, which is the 1%, and we can make your lives better by taking from them and moving it down.' That's resonating. Now what I think is going to end up happening here, is he's going to be able to shape the message for the democrats going forward. He's not going to to probably be able to pull this out and win. It's going to end up being mathematically impossible. But if he can take his delegates and he can take his people that back him and change the message, and make Hillary move further to the left, that is a victory for him. Fox 32 Anchor: Kathleen, question about John Kasich. Finally won a state. His home state of Ohio last night. Staving off Donald Trump. Lot of excitement with the Kasich folks. Folks who support him. Mathematically though he's got no chance to win the delegate count. But he says he's in it to the end. What is he hoping for? What is his path to the nomination? Kathleen Murphy: I don't think he has one. But you know what's interesting, we started this race with 9 republican governors and last night was the first win for any of them. The GOP needs to decide right now what they're going to do. Are you going to come in behind the guy who you hate? But has won, has beaten Trump. Or are you going to come in behind the guy you like and think you can work with but hasn't won anywhere but his home state.

related content

Exclusive: Dan & Amy Interview Pres. Candidate Gov. John Kasich

Just before winning big in Ohio, Dan Proft & Amy Jacobson interviewed Presidential hopeful, Governor John Kasich.

Just before winning big in Ohio, Dan Proft & Amy Jacobson interviewed Presidential hopeful, Governor John Kasich. Full transcript:

related content

Dan Proft & John Tillman

On this edition of “Illinois Rising”, Dan Proft and John Tillman, CEO of the Illinois Policy Institute, discuss education funding for a bailout of CPS, the political proxy war between Gov. Bruce Rauner and House Speaker Mike Madigan, a new poll showing that a majority of Illinoisans support right-to-work legislation, Donald Trump, Illinois’ Primary Election and the delegate count.

related content

Gov. Rauner on Democrat Legislative Leaders, "These guys don't want to do anything..."

Gov. Bruce Rauner joined Dan & Amy on Friday to discuss the reaction of legislative leaders to his State Budget Address including to his school funding proposal. Rauner also spoke about pending negotiations with AFSCME, the possibility of a state worker strike, merit pay for state workers and the elimination of unfunded mandates on local units of government.  

View full transcript

Dan Proft: Good morning, Dan and Amy. Amy, this is an important guest for you. Amy Jacobson: Yes, I know. Dan Proft: Not just as an Illinois resident, but as a Swede and as a finalist for your Swedish reality TV show. Amy Jacobson: Yeah. The TV show is called Allt för Sverige. Dan Proft: Of course. Amy Jacobson: You don't even say it right. Dan Proft: Yeah. Of course, of course. Everybody watches that. Amy Jacobson: And it's the #1 show in Sweden and it's all about–the premise of the show is bringing Americans and some Canadians to Sweden for the first time and then they have to go through challenges and obstacles and eat herring and lutfisk. And whoever survives then gets to meet their living relatives that they've never met before in Sweden. Dan Proft: Maybe, and maybe you could have a certain Illinois governor. The Swedish roots write you a little bit of a letter of recommendation to help put you ahead you ahead of the pack in the competition. Amy Jacobson: Yeah, it's a fierce competition. There's 2,000 people applied, they'd choose only 5. Dan Proft: Well, why don't we bring Gov. Bruce Rauner on to ask him the important questions–will you help Amy get on a Swedish reality TV show? Gov. Rauner, thanks so much for joining us. We appreciate it. Gov. Bruce Rauner: Good morning, Dan, good morning, Amy. How are you doing? Dan Proft: Good. Gov. Bruce Rauner: I love the sound of that show, that sounds pretty cool. Amy, are you trying to get on it? Amy Jacobson: Oh, yeah. I've made it past the first round, but we're going to be filling out a questionnaire later. Dan's going to help me on the air. Dan Proft: Yeah. Gov. Bruce Rauner: Well, I tell you, if you get through it, it's fantastic. I took my Swedish grandfather back for his 90th birthday. I have never been to Sweden. He he been writing to his relatives his whole life from Wisconsin, and he'd never been. And since he was like two-years-old, and I took him over and we spent a week, I cried every day, he was hugging these people. The average age was like, 102. And we saw the cabin where his family came from. It was fantastic. It was really fun. Dan Proft: Maybe Rauner and Jacobson on that reality TV show. What do you think? Amy Jacobson: Who's going to finish first, though? Because it is a competition and I am just a tad bit aggressive. Dan Proft: I understand, I understand. Well, governor, you gave your budget address on Wednesday in Springfield and you made Democrat legislative leaders an offer. If you want to work with me in structural reform, then great, let's get to it. If you don't, then thus with me the authority to bring the state budget into balance, and I'll do the dirty work that you don't want to do. You have any takers on that yet? Gov. Bruce Rauner: We've had a lot of silence that was mixed with criticism. These guys don’t want to do anything. Basically what they want to do is authorize more spending than we have in revenue again just like they did for the last couple of years. Well, actually, frankly, for 20 years. And then they don't want to vote for tax hike unless Republicans support the tax hike. So it's a ridiculous position that they’re. Amy Jacobson: How do you stomach this job that you're doing, and working with the man who's just so stubborn and so power-hungry? How do you sleep at night? Gov. Bruce Rauner: You know what? This is a labor of love. I love Illinois and I'm a volunteer and it's a big deal. It's a privilege for me to do it. It’s hard. It's really hard. But any important change in direction is hard. I mean, I knew it's going to be difficult. People keep saying, "Oh, it's about the budget. Stop fighting about the budget just work it out." It's not about the budget, it's about the future direction of Illinois. Are we going to stay on the track we're on with massive tax hike, deficits, unfunded pensions, job losses, lower incomes, defunding schools, or are we going to go on a different, more positive direction? That's what this fight's about. Madigan has controlled the General Assembly for decades. He likes the status quo, he doesn't want to change anything, and that's what this battle's about. Dan Proft: It seems to me that one of the things that's happening concurrent with this budget impasse is that a lot of people who maybe thought that they were protected by the power structure in its current formation and its previous formation before you were elected, that they're insulated from the pain. And that everything can burn down but they're going to be okay, and they're finding out that nobody is insulated from the pain when you have state on the trajectory you were describing. Gov. Bruce Rauner: No, that's a very messy tragedy. The people of Illinois have been not served by our government under Speaker Madigan. We've been going down a bad road for decades and it's all coming home to roost now. We have fewer jobs and we have lower family incomes than we had 17 years ago in Illinois. We have been going the wrong way. Speaker Madigan has controlled it and we've got to change that direction. If I could just negotiate with Pres. Cullerton or the mayor in Chicago, we'd fight, but we'd have it worked out. But everything I work out some sort of compromise with either one of them, Speaker Madigan comes in and says, "Nope! Don't like it, no changes." Slaps them back and we're back to square one. Amy Jacobson: You know, a lot of my lefty lady friends say that you're trying to break the unions. I try to explain to them that you're really trying to make them take concessions. Is that correct? Gov. Bruce Rauner: That's correct. Look, the unions are not going away, they're part of culture. In fact, they’ve done many good things in our society over the last 100 years. But we've got to have a balance of power. And what other states have done is where it's needed inside government taken certain things out of collective bargaining in order to protect tax payers when it was necessary. And Chicago and the Democrats in Chicago have done that for years. I'm not proposing something that's some sort of radical new extreme idea. This has already happened. We just need to do a bit more of it to get our state going in the right direction. Dan Proft: Well, Chicago Democrats have tried to take something out of collective bargaining. You out of collective bargaining. Gov. Bruce Rauner: That's true. Dan Proft: And so what's the difference? Can you give us a sense of the dynamic? We've made this point on the show. So you've negotiated contract with other labor units like the teamsters that represent smaller group of state employees than does AFSCME the largest public sector union representing state workers. You've negotiated deals with them, what's the difference between negotiating with the teamsters and negotiating with AFSCME? Gov. Bruce Rauner: See, the teamsters have to deal with reality. I mean, they're a union that did works in a lot of different environments. So they work in business. And they know what it takes to be reasonable and to work out compromises when times are tough. They've done it before. AFSCME had the run of state government. They've basically dictated terms and set everything they wanted for decades and Republican governors and Democratic governors have basically given up everything they've ever wanted for 30, 40 years. I'm the first governor who said, "No, I'm sorry folks. We can't afford another $3B in compensation for you the next four years. You're already the highest paid state of police in America.” God bless you, that's fine. But we can't have another $3B more. We've got to have state salaries stay flat for a few years. And only give merit pay increases based on productivity or saving tax payer money. And they said, "Oh no. We always got what we wanted. You're going to give it to us, governor." I said, "No, I'm sorry. I'm not." And then they said, "Well, we might have to strike." And I said, "Well, I hope you don't. Please don't. I don't want you to. But if you do, we will still keep the government running because that's my job and I know how to do that." And they said, "Oh my goodness. No governor has ever said that to us. That's not fair." And I said, "That's totally fair. That's how the law works. I'm just doing my job." And they said, "Uh-oh. You're a little too tough. Most politicians run or screaming from the room when we threaten them. We're going to have to get you out." They went to Speaker Madigan and said, "We want the governor out of the negotiation. He's too tough. He's not giving into us like everybody else always has. We want him out. Bring in a labor-friendly arbitrator to give us what we want." Speaker Madigan passed that law, I vetoed it. And we were able to keep one Democratic legislator off of it, so my veto stood. And now I can stay in the negotiation. And that is going to protect taxpayers from billions of dollars. Dan Proft: Well, if AFSCME is intent on striking if they don't get everything they want when they wanted it has been the case historically, you just described, is there going to be a Reagan and the air traffic controller’s moments, potentially? Gov. Bruce Rauner: No, I don't think so. I certainly hope not. And we will keep the government running. But I'm not trying to replace everybody, that's not my goal. My goal is to protect taxpayers had the government run well, have our state employees paid well–maybe not necessarily the highest-paid in America for the next 20 years. But very well-paid–and I want them to make more based upon–what I've said is, "I'll give you raises. I'll give you 5% of every $1 you save for taxpayers. You can make a lot more money." A lot of the employees go– "Yeah, I love that." Because they've got good ideas. The union leaders say, "No, no, no. We want seniority only. We don't want merit pay or bonuses based upon savings." So we're going to have a philosophical difference. We're going to have to work it out. Amy Jacobson: C.E.O. of CPS Forrest Claypool basically is claiming that you're a hoarding money, that you're not giving the school district what it needs. Can you get on that, please, because we have some teachers who are worried about their future? Dan Proft: Hoarding money. Gov. Bruce Rauner: It's so– Amy Jacobson: Let it go. Gov. Bruce Rauner: You can't make this stuff up. It's so ludicrous. So far as Claypool is criticizing me, that was it. The governor's defending the indefensible. He's hurting low-income children. He is protecting the status quo. The school funding formula was created by Mike Madigan and the Democrats 20 years ago. I didn't make this stuff up. And I want to change it. But what Speaker Madigan said, "It's too hard to change, I don't want to change it." Forrest Claypool should be screaming at Mike Madigan every day. Well, what did he do? He protects Madigan and he criticizes me, and I'm not even–I mean, I just got here. I'd admit I didn't put this system in place, it's a terrible system. Dan Proft: Well, they need Boogeyman to push attention away from exactly what you said, who's been in charge for all those time, who's lorded over CPS, the city of Chicago, for 100 years. And we find ourselves where we find ourselves. Gov. Bruce Rauner: Exactly. That's exactly right. Dan Proft: So on the issue of school funding, though, another important piece of your budget address was $400M more in early education funding, but you made the point a couple of times but General Assembly, you got to send me a clean bill, no games, a clean bill. What did you mean by that? Gov. Bruce Rauner: Yeah. Well, see, here's what's going on. They're trying to place games–what Pres. Cullerton, the Democratic leader of the senate has said, he's Madigan's spokesman most of the time. He basically came out and said, "I won't support funding schools this year." So schools can't open in the fall unless Chicago gets a bail out, Chicago gets a lot more money. They need more money, and I'm going to demand, Chicago gets a lot more. Otherwise, no schools are going to get their funding. And I said, "Whoa, whoa, whoa. Wait a minute, guys. That is baloney. That is not happening. No matter what, our kids come first across the state of Illinois. And we're going to have a clean education funding bill with more money from schools than we've ever had." Fully funding the foundation level more than ever in Illinois history. Schools are most important. And we're going to get them open and we're going to get their money no matter what. Dan Proft: All right. Gov. Rauner. He is going to be at Glenbard East High School. Gov. Bruce Rauner: Yup. Dan Proft: Today. Gov. Bruce Rauner: Yup. Dan Proft: This afternoon at Lombard at Glenbard East. The mascot, Amy? Amy Jacobson: Uh-huh. Dan Proft: The Rams. Amy Jacobson: Oh, excuse me. Dan Proft: The Glenbard East Rams. Come on. Amy Jacobson: The Glenbard West is The Hilltoppers. Dan Proft: That's correct. Amy Jacobson: I knew that. Dan Proft: That's very nice. So you're going to be at Glenbard East today along with State Senator Jason Barickman, State Representative Ron Sandack, to announce support for unfunded mandate legislations sponsored by those two legislators. This goes back to trying to help local units of government. Gov. Bruce Rauner: Yeah. I cut cost and school districts save money. Yeah, we're going to be at Glenbard East and Lombard this morning between 9:30 and 10:30. I'm heading out there just in a few minutes. And basically, what we're trying to do is get Springfield off of school districts' backs and let them teach the way they want to teach. We're doing a few things. One, we're getting rid of the restriction on outside contracting for non-instructional services like janitorial or maintenance or others, like transportation services. Chicago has already gotten that special exemption so that they can outside contract. Other school districts haven’t gotten that exception; we are getting that for all school districts in the state. The other thing we're doing is giving school districts more flexibility on how they teach Driver's Ed. and how they handle P.E. so that they can–athletes don't have to skip classes for P.E. they can take the classes as well as do their sports. And Driver's Ed. can be taught by outside commercial services they don't all just have to be taught strictly by the school district itself so we can save money. That's what these mandates are all about. Dan Proft: All right. Well, enjoy Bucolic DuPage County. Gov. Bruce Rauner, thanks so much for joining us. Appreciate it. Gov. Bruce Rauner: Thanks, Dan. Thanks, Amy. And [inaudible 00:12:52], go for it. Get over to Sweden. Have fun. Amy Jacobson: [inaudible 00:12:53]. That's for me to know and for you to find out. Dan Proft: Thank you, Gov. Rauner. Thanks. Gov. Bruce Rauner: Yeah.

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.

View full transcript

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.


related content

He who has gotten used to unreason is ready for unkindness

At Speakout Illinois Dan Proft discusses how to make this year's theme: “Illinois Lives Matter” a reality, rather than an aspirational statement.

“Illinois Lives Matter”. That is the theme of this year’s Speak Out.

It turns out that is an aspirational statement rather than one that reflects the reality on the ground here.

While the incidence of abortion continues to decline—down another 6% last year and Thank God for that—Illinois still retains its title as the abortion dumping ground of the Midwest.

Chicago has a higher murder per capita rate than New York and Los Angeles combined.

Illinois ranks 47th in the nation in providing services for developmentally disabled persons

The divide is widening between those who believe they are their brother’s keeper and a government that acts only as the keeper of their brother’s money.

Now I am not going to overstate the case as to the State of the State of Illinois because there is no need. The problems we have here exist everywhere because man exists everywhere. There is no utopia on our mortal coil just outside Illinois’ borders.

However, the problems endemic to the human condition are particularly pronounced in Illinois. Someone always serves as the bad example and this is the role Illinois has chosen to play for the United States.

And there is a reason. It is because we have given in to unreason.

As the great Christian apologist (and convert to Catholicism…a little shout out for my faith tradition) G.K. Chesterton observed in a column in the Illustrated London News during the darkness of The Great Depression, “He who has got used to unreason is ready for unkindness.”

When we get used to injustice—particularly institutionalized injustice—we are ready to usher in unkindness, even barbarism.

Do you remember five years ago when the State of Illinois cancelled its 92-year-long adoption contract with Catholic Charities soon after the passing of civil unions? Robyn Zeigler, a spokesman for Attorney General Lisa Madigan, said at the time in explanation of the decision, “Our focus remains on doing what is best for the care and welfare of children in the foster care system in Illinois.”

For 92 years the state said it was renewing the contract because it was in the best interest of children to do so. Then, overnight, Lisa Madigan cancelled the contract because it was doing what was in the best interests of children. The only problem is, Catholic Charities' policies didn't change from 24 hours earlier when the state said it was operating in the best interests of children. Likewise, nothing changed about the child's best interest.

But something changed for the thousands of children in Catholic Charities foster care and the thousands of children Catholic Charities placed in loving adoptive homes. Their interests were sacrificed on the pyre of intolerance masquerading as tolerance.

He who has got used to unreason is ready for unkindness.


Speaking of adoption, you may know because you’ve probably seen them on the roads that 29 states have the “Choose Life” license plates.

These are so-called specialty plates where residents pay a premium for their license plate and a portion of the premium is distributed to organizations consistent with the mission of the plate sponsor. With “Choose Life” plates the benefiting organizations are crisis pregnancy centers and other such adoption service providers. Tens of millions of dollars have been raised through the voluntary purchase of these plates to support CPCs and adoption services providers

Illinois has more than 100 specialty license plates. For example, there’s a plate to support youth golf—for the youth that make it to golfing age in Illinois.

There is no “Choose Life” plate but it hasn’t been for lacking of trying dating back to 2003. The effort has been led by pro-life heroes Jim Finnegan, Joe & Carol Walsh, Jill Stanek, Tom Brejcha, Peter Breen and Tom Morrison—long before they were State Reps.—and many others.

But two leaders for the cause deserve special mention in a story not enough people have heard and not enough people remember: they are Rev. Scott & Janet Willis.

After losing 6 children in a horrific car accident involving another driver who had obtained his CDL license by bribing a Sec. of State’s office employee—the most egregious consequence of the George Ryan-era corruption—Scott & Janet Willis appeared at an African-American church on the south side of Chicago (I was there as well) and said this, “Eight and one-half years ago, Janet and I lost six of our children in a terrible van accident. The tragedy, as the people of Illinois now know, was partially due to a licensing system in Illinois that had been abused for political greed and power. The system of licensing is not bad. The abuse of the system is what has been so destructive. We believe that offering this 'Choose Life' specialty plate is one way this system can be cleaned up from its corrupt core and be used for good."

A State Senator running for US Senator named Barack Obama called the “Choose Life” license plates, “contentious.”

Part of that effort early on included a meeting with House Speaker Mike Madigan, he was House Speaker then just as he is now just as he was when Illinois was incorporated in 1818.

Madigan spoke of his support for adoption because, you know, he told Rev. Scott & Janet Willis (I was at that meeting too), I adopted my daughter Lisa. I suggested to Madigan, that this was great news (though I already knew it) and, despite the suggestion he made that he is but one legislator, we all know him to be a very persuasive legislator and if he wants something voted up on the House floor, then that thing will get voted up on the House floor and we’ll go ahead and hold him to that standard of excellence he has set for himself.

That was the first and last time I was included in a face-to-face meeting with Madigan. Madigan bottled up the “Choose Life” plate legislation in committee and 13 years later the effort continues.

(Remind me to tell you the Emil Jones story).

The short of this is Rev. Scott & Janet Willis brought their grace to the General Assembly in support of a positive development from the incalculable tragedy they endured and at the hands of a government they financed no less. Their views were humored but not considered because voluntary support of adoption service providers through a forum the state has made available to speech (state license plate) was too “contentious.”

You know of the good work CPCs do for children and families alike. Think how many more children and families could have been served by those who live their lives for others with the resources this license plate would’ve unleashed.

He who has got used to unreason is ready for unkindness.


In 2009, when I was running my ill-fated campaign for governor, I got an email from a friend asking if I had seen an executive order issued by ill-equipped Gov. Pat Quinn, also a Catholic (Chesterton, Pat Quinn…we’ve got a big tent…too big), that would allow the public sector unions to try and organize the state-contracted home health care workers.

I had seen something about it but I took to be another public sector union gambit and, at the time, didn’t fully appreciate the implications.

That changed after I met with a group of parents, including a woman named Pam Harris, who had children with developmental disabilities.

They explained how the state’s home health care worker program worked to me in its actual operation. The state provided a rather modest stipend to the home health care worker for a developmentally disabled child for that child’s care. The home health care worker most often turned out to be one or both of the child’s parents because, of course, who has a bigger stake in the care of a child then his parents.

This was the rare state program that was actually in alignment with the interests of Illinois families specifically and civilization generally.

Well, of course, this could not stand. What Quinn’s executive order would’ve allowed is to close the shop of home health care workers and herd parents into the Service Employees Union because SEIU is always looking for to force more dues-paying members into their ranks.

Think about this for a second, the parent would be (forcibly) represented by a union against their child. I’m sorry, Joey, you don’t get fed right now, I’m on one of my two 15-minute breaks.

The courtesy and customer service of the DMV for the developmentally disabled.

He who has gotten use to unreason is ready for unkindness.

Pam Harris and other parents were having none of it. They were not going to let a SEIU business agent come between them and their children. Pam Harris took her case all the way to the Supreme Court of the United States and five years after Quinn’s executive order, Harris was victorious.

I’ve got to give you at least one “and they lived happily ever after” ending.


Unfortunately, the news is generally not so happy as I mentioned at the outset with Illinois’ ignominious record of serving persons with developmental disabilities.

This week Lutheran Social Services announced they are laying off some 750 employees, nearly 43% of their staff, and shutting down a number of programs in the areas of senior services and addiction services because the state owes them $6 million for services already rendered and LSSI can’t afford to float the state any longer.

Catholic Charities is suggesting similar reductions because the state is in arrears to them for $16 million.

There are cries from social service providers to get a budget done, to raise taxes, to make funding social services a priority.

Let me close by informing the fact-free news reports you have likely seen recently on this matter.

$214 billion in debt. $30 billion in assets. 7:1 debt to total assets ratio.

That’s the State of Illinois.

You don’t rack up $214 billion in debt overnight. In fact, Illinois has not passed a constitutionally balanced budget in 14 years.

Illinois has the 5th highest total tax burden in the country according to the Tax Foundation and the worst credit rating in the country according to everyone.

So think through this with me and go help others to do similarly.

My legislative representatives and yours tell me they’re committed to helping the truly vulnerable, those who need temporary help and those who need long-term assistance and services through no fault of their own.

We have $214 billion in debt.

So after all of the taxing and spending and borrowing and spending, if the truly vulnerable was the priority how is it we’re 47th in providing services to the developmentally disabled and tens of millions in arrears to social services providing operating other laudatory programs?

How do you reconcile the contradiction?

They’re lying. That’s how.

Recalling the “Choose Life” license plate matter for comparison and emphasis: Illinois state government doesn’t spend the money it takes from you as they say the will while preventing you a channel to voluntarily spend your money for the benefit of others.

He who has got used to unreason is ready for unkindness.


In close, the good news is that the antidote for unreason and unkindness are the reasoned people in this room who with a servant’s heart those within your circles of influence who are similarly disposed.

I’m not the mindless happy talk guy. So I have to tell you what I think is true, that Illinois has in many ways become a barbaric place to live.

But that need not be our destiny.

What you do matters. Your civic engagement. Your charitable work matters. The opinion leadership you provide within your circles of influence matters.

We need people who know better to share their knowledge, collectively demand better and labor for better.

I find myself going back to read passages from Whitaker Chambers’ “Witness” often to remind myself that the point is to put in the fight for what you think is right even if you think you’re going to lose. You never know. You may be wrong about the outcome.

Thank you.


Dan Proft & Pat Hughes

On this edition of “Illinois Rising”, Dan Proft and Pat Hughes, Co-Founder, Illinois Opportunity Project, discuss State Rep. David McSweeney’s plan to keep and grow manufacturing jobs in Illinois, DuPage County’s burdensome startup costs forcing retailers to leave the county, the constitutionality of forcing agency fees on teachers who don’t want unions to represent them and more.

related content

Dan and Amy interview Chris Pfannkuche, candidate for Cook County State's Attorney

All the talk on the talk on the Cook County State's Attorney race is about the Democrat primary with Toni Preckwinkle minion Kim Foxx endorsed by the Cook County Democrat Machine over beleaguered incumbent Anita Alvarez. And yet, there is a Republican candidate for the office who worked in the office for three decades and turns out to be more qualified than the three Democrat candidates combined. Meet Christopher Pfannkuche and learn more about him at VoteChristopher.com.

related content

AFSCME impasse: Will Rauner show the Political Ruling Class who's boss?

chicago tribune mast head
chicago tribune mast head

By Dan Proft, Featured in the Chicago Tribune on 1/15/2016

Screen Shot 2016-01-15 at 5.43.55 PM
Screen Shot 2016-01-15 at 5.43.55 PM

Gov. Bruce Rauner is interviewed at the Illinois Executive Mansion in Springfield on Monday, Jan. 11, 2016, about his first full year in office. On Friday, he announced that his administration has asked the Illinois Labor Relations Board to determine whether or not the the state and AFSCME are at an impasse. (Zbigniew Bzdak / Chicago Tribune)

A study done last year by the think tank State Budget Solutions found that total compensation for Illinois state employees was on average 27 percent higher than their counterparts in the private sector.

Illinois state employees made nearly $4,000 more in wages and $13,000 more in benefits than the private-sector employees.

More than half of Illinois state workers will retire before age 60 with guaranteed state pensions that average more than $42,000 and compound at 3 percent annually.

Here's what you already know: The state is in a financial death spiral with ground impact imminent.

All of this is useful to consider against the backdrop of Gov. Bruce Rauner breaking off contract talks with AFSCME, the state's largest public sector union representing some 36,000 state workers.

AFSCME has been unwilling to give on its demands for annual salary step increases of 3.8 percent in addition to annual general wage increases. The step increases alone represent a raise of more than seven times the rate of inflation in 2015. AFSCME has been unwilling to give on payment of overtime after 37.5 hours of work in a week.

The lowball estimate of the cost of what AFSCME demands is $1.6 billion. That's $1.6 billion more from Illinois families, who pay the highest property taxes in the nation, who are already on the hook for $8.5 billion in unpaid state bills and $111 billion in unfunded state pension liabilities.

The fiscal reality of the state was not lost on unions that represent smaller groups of state workers. The Teamsters, representing nearly 5,000 state employees, agreed to a four-year general wage freeze, a four-year freeze on step increases and starting overtime compensation after 40 hours of work.

This is not an attack on public sector workers. This is not an attack on public sector unions. The Teamsters, and many rank-and-file AFSCME workers with whom I have spoken, have proved eminently reasonable.

This is a story of the funding arm of the Illinois Political Ruling Class that preaches fairness but enjoys being downright spoiled by those it has bought, paid for and sent to Springfield. AFSCME has always gotten what it has wanted — no matter the price. It likes it that way. And it's not particularly keen on changing the cozy arrangement it's had with both parties for generations.

This is Rauner's moment of truth.

Even more important than a fiscal-year budget is sending the unmistakable message to AFSCME (and its SEIU and teachers' union cohorts) that the balance of the nearly 13 million residents of Illinois not in their ranks do not exist as spare parts for the machine that spits out compensation packages 27 percent higher than their own.

If that involves a siege on Springfield like Wisconsin Gov. Scott Walker confronted in Madison, so be it.

If that requires layoffs and outsourcing of state work to contractors, so be it.

If that requires losing an election, so be it.

Rauner ran for governor saying he is not a politician. He said he is a businessman who will make the difficult decisions to turn around the state he loves.

We're about to find out if that's true.

Dan Proft is a talk show host on WIND-AM 560.

Exclusive: Gov. Rauner drops the hammer on Mayor Rahm Emanuel

Exclusive interview with Dan Proft and Amy Jacobson.

Illinois Gov. Bruce Rauner dropped the hammer on Rahm Emanuel this morning. He also discussed his plans for local government consolidations and the conditions to resolve the state's budget impasse.

related content

Dan Proft & Ted Dabrowski, VP of Policy, Illinois Policy Institute

On this edition of “Illinois Rising”, Dan Proft and Ted Dabrowski, VP of Policy, Illinois Policy Institute, discuss how Lincolnshire is the first municipality in Illinois to become a right-to-work zone, the Chicago Teacher’s Union received 96.5 percent support from its members for a strike, a group of Republican legislative candidates supporting legislation to recall Rahm Emanuel and more.

related content

Republicans Should Take Lead to Recall Rahm

In the immortal words of Judge Smails in Caddyshack, “Well, we’re waiting!”

We’re not waiting for Danny Noonan to make a putt at Bushwood Country Club. We’re waiting for bush league Illinois Republicans to stop puttering around and seize the moment.

Every single one of the 67 Republican superminority state legislators should sign on as a co-sponsor to the legislation filed by State Rep. LaShawn Ford, an African-American West Side Democrat, to recall Chicago’s feudal lords in general and its present mincing mayor in particular.

Retweeting #RecallRahm is not sufficient.

For the first time in at least three decades Republicans have a chance to regain relevance in the governance of the City of Chicago and simultaneously begin to reshuffle the political allegiances of minority families in the state.

Five years into Rahm’s rule and two of the core institutions in the city, the police and the schools, are disintegrating to say nothing of the underlying Enron-ian city finances undergirding the whole system.

For Rahm Republicans, this is the opportunity to do penance for their sin of supporting the Shetland scammer.

We have a recall mechanism for Illinois’ governor. Why shouldn’t we have one for Chicago’s mayor? More former governors are convicted felons, yes. But that doesn’t mean as many former mayors weren’t just as deserving.

So spare us the rationalizations and cop-out capitulations.

Who would come next? What if they’re worse?

I am happy to have that discussion on the occasion of Rahm’s head on a spike in front of City Hall.

What about the structural reforms needed in Chicago? Just replacing the mayor isn’t enough.

I refer you to my answer above.

A former radio colleague of mine Deborah Rowe enlightened me long ago as to the answer to the question, how can Republicans do a better job of attracting African-American families to their ranks?

Rowe told me, one of the things we need to see is Republicans standing up when they should stand up.

This is that moment.

Illinois Republicans have a choice. They can either stand up and speak with moral clarity against the injustices of the day or they can settle into the superminority for many generations to come.

But House Speaker Mike Madigan will never call the bill so what’s the point?

Maybe he will. Maybe he won’t.

Public pressure is a funny thing. It can force outcomes once thought unimaginable.

Regardless, Republicans who are content to predict what will happen rather than work for what they would like to see happen will be seen for the cowards they are.

As C.S. Lewis observed, “Courage is not simply one of the virtues, but the form of every virtue at the testing point.”

If the Illinois Republicans Party is not a courageous party it cannot be a virtuous party and it will never again be a majority party.

related content

Dan Proft & Kristen McQueary

For the first time Kristen McQueary speaks publicly about the repercussions from her Hurricane Katrina column. And, as someone who has covered Chicago and Illinois politics for the past 15 years, she offers candid assessments of Mayor Rahm Emanuel, Governor Bruce Rauner and city and state finances.

related content

Dan Proft, Pat Hughes & Diana Rickert

On this edition of “Illinois Rising”, Pat Hughes and Diana Rickert, VP of Communications at the Illinois Policy Institute, discuss Cook County Board President Toni Preckwinkle's proposed tax on bowling, golf and cable TV, the state's budget impasse, and Marvel Comics' Captain America series portraying villains as a “right-wing extremist group”.

related content