Why is Thad Glad?

One of the mistakes that I consistently make is that I believe people think like I do.  This is especially true in politics, especially in the state of Illinois.  While I am frustrated with our state government, I am going to stay positive and offer a modest proposal that will surely improve our state.

In 2018,  I wrote an small optimistic post about our newly elected governor, JB Pritzker, affectionately known as JB,  and his potential to improve the state of Illinois.  My theory was that with all branches of state government firmly in single party control, we might see reforms that would help the state win the future.  The Democrats could fix things for the longer term because they would be fully accountable.  My logic was that JB had run businesses and therefore would apply executive mindset and expertise to running the state.  I envisioned him attacking the apparently unsolvable problem of debt, especially pension debt, while imposing fiscal discipline.

Since then, indicators like the following continue to show that the state is off track:

• Kiplinger’s rates Illinois as the least tax friendly state for middle class families
• Illinois has the second highest gas taxes in the nation
• Illinois has the lowest credit rating in the nation, despite recent bond rating agency upgrades 
• Illinois has the fourth highest state and local government debt as measured on a debt per person basis 
• Illinois is second to last in funding government employee pensions
• Illinois ranks as the number three most corrupt state and Chicago is the most corrupt city 
• Illinois rated D+ on for small business friendliness
• CEOs rank Illinois the third worst state for business
• Illinois has second largest population decline
• Illinois ranked as fifth most fun state (Good news!  More on this later)

With rankings like these, I erroneously think politicians would act like their hair is on fire and legislate reforms with a sense of urgency.

My thinking is simple:  if we are a high tax and high debt state, we must have a spending problem. Fix that.

It’s not just me. People and businesses are moving out.  More people leave the state than move in.  Caterpillar, Boeing, and Citadel are leaving the state.  McDonald’s is saber rattling too.  As the nation retools in preparation for a future with less fossil fuels and on-shores manufacturing after the COVID supply chain mess, businesses are expanding in other states. For me this point is exemplified by the electric truck startup Rivian, which purchased an abandoned car manufacturing plant in Illinois.  However, they are now building their second and significantly larger factory in Georgia.  Chicago has some examples of corporate growth as companies like Google, Facebook, and Salesforce expand for access to white collar talent, which is great. However, if Illinois is a going to be a state for the “hardworking families” that Democrats represent, we need our fair share of manufacturing jobs.  They are not coming until things change significantly.

Pro-union Illinois is surrounded by Right to Work states and is one of only three Midwestern states that are not Right to Work.  Right to Work, lower taxes, and more friendly regulatory environments draw companies to other states, especially Southern states.  In our alternate universe, Illinois politicians do not seem to think we are pro-labor enough, because they put a referendum on the ballot in November that will further solidify privileges for organized labor, especially the powerful public sector unions that fund Springfield.  It’s called Amendment 1.

Gerrymandering has become a national obsession and Illinois excels at it.  Obama was famously against it saying, “We have to end the practice of drawing our congressional districts so that politicians can pick their voters and not the other way around.”  At one point JB supported the idea of a constitutional “Fair Maps” amendment. However, his thinking must have evolved. Illinois politicians are fully committed to picking their voters.  In the most recent redistricting exercise, two of three of the Illinois election maps received F’s from the Princeton Gerrymandering Project.   Illinois Democrats have to be optimistic about their future.

My fundamental flaw is thinking that government can be run like a business.  JB is competent, capable, and strategic.  He is just playing a different game.  It’s not the Fix-Illinois-Long-Term-Fiscal-Issues game that I want to be played.  Instead, he is playing the Position-Myself-For-Higher-Office game.  The rule of that game is power, as in getting it, keeping it, and expanding it. 

Perhaps I am again in error.  JB might just be using his business expertise to focus on growing revenue more than managing expenses.

In 2017, Democratic super-majorities in the General Assembly increased personal income tax rates by 32%, to 4.95% from 3.75%, while also increasing corporate income taxes by 33%, to 7.0% from 5.25%.  Despite the recent increase, upon taking office, JB doubled down on revenue increases by advancing an amendment to eliminate flat tax provision of the Constitution to raise state income.  He poured $51 million of his own money into a losing campaign to convince voters to approve it.  Fortunately, our billionaire former resident Ken Griffin spent heavily against it.

JB and the General Assembly then successfully enacted more than twenty tax and fee increases, the most painful of which is doubling of the gas tax with built in annual increases. They also doubled motor vehicle registration fees.  Both changes hurt lower income people the most.

Illinois politicians raised voluntary taxes by legalizing recreational cannabis, legalizing sports betting, increasing video gambling machine taxes, and expanding gambling licenses with casinos coming to Chicago and Waukegan soon. 

While the state budget may appear balanced on JB’s Twitter feed, it’s balance is a mirage supported by Federal COVID relief funds and the traditional practice of under funding pensions.  See Wirepoints.

Based on recent speeches in New Hampshire and Florida, it’s clear that JB has national aspirations, and his re-election messaging focuses on his record supporting national Democratic priorities rather than the fiscal needs of the state.  Below are some of his legislative highlights.

Supporting Immigrants

• Expanded Medicaid eligibility for undocumented noncitizens at cost of about $68 million per year
• Signed the Keeping Illinois Families Together Act, which prohibits local law enforcement from coordinating with Immigration and Customs Enforcement, or ICE

Criminal Justice Reform

• Passed the Safe-T Act, which eliminates cash bail, gives detainees more rights, and expands accountability for police

Enhanced Reproductive Health Access

• Expanded access to abortion in Illinois to include removal of parental notifications and expanding access to abortions until fetal viability

Supporting Labor

• Agreed to AFCME contract provisions complete with pay raises, back pay and bonuses which were being negotiated by the prior administration and expanding budget.  See Illinois Policy
• Made election day a holiday for state workers 
• Supports Amendment 1 to the Illinois Constitution which enshrines the right to collective bargaining and more
• Raised minimum wage to $15 per hour

Fighting Climate Change

• Passed the Climate and Equitable Jobs Act, charting the path to a clean energy future by 2050.  Read the press release to see a ton of equity, labor, and consumer protection provisions 

Regardless of your views about the above, JB has achieved a legislative record that should play well with liberal leaning Democratic primary voters.  But that is not all.  With some Machiavellian genius, he scored a triple win in the Republican gubernatorial primary by covertly funding support for Darren Bailey.  With Bailey’s win he sets up a JB vs MAGA election while also defeating the more electable moderate Republican funded by his mega-donor nemesis Ken Griffin.  Assuming JB wins in November, he can credibly position himself as a MAGA slayer with a solid liberal legislative record.  Clearly, JB is playing to win the Presidential nomination game.  He had a plan and he executed against it.  Biden just needs to step aside.  Of course, JB’s opponents can broadly paint him as a woke, tax and spend, soft on crime liberal, terms that some might not find complimentary.

Whatever the outcome of JB’s Presidential aspirations, Illinois still has unresolved financial problems that neither JB nor the General Assembly is prepared to address.  It’s hard to accurately predict the future, but I see two paths for the state.  Since I always want to be solutions oriented, I am also proposing some modest out of the box ideas that might work in our single party state.

When Hell Freezes Over – Politicians Pass Needed Reforms Soon

• State passes a Constitutional Amendment to allow modifications to public sector pensions and the General Assembly passes needed reforms, which the Governor signs
• State passes a Fair Maps amendment to end gerrymandering
• Politicians enact nation leading ethics reforms
• Politicians enact Right to Work and other business friendly reforms
• State government operates with financial discipline and adopts stringent accounting standards and long term planning
• Illinois becomes the go to destination for manufacturing jobs including some union jobs and the economy grows steadily
• Because of our fiscal discipline and economic growth, we rapidly reduce debts and begin to lower taxes, especially property taxes
• It’s not going to happen.  The stars are not going to align.  Voters are not going to demand change. Democratic legislators will not endorse this agenda. Mitch Daniels is not going become Governor of Illinois, he does not even live here.  The General Assembly is not going to flip Republican.  Is there even a viable Republican party in Illinois?

Pay the Piper – The Path We are On

• Business as usual
• We pass Amendment 1 and expand public sector union influence in politics
• At some point, a recession will reduce tax collections while the impact of rising interest rates will absorb an even larger share of the budget
• The unpaid bill backlog will skyrocket
• Politicians will raise taxes and fees to cover gaps – I bet we see another version of the Fair Tax Amendment which will pass since all Republican mega donors have moved to other states or no longer like wasting their money
• People and businesses will continue to leave the state further reducing revenues
• The state will become insolvent
• The Feds will need to solve the problems through a bankruptcy style oversight process, and/or through a bail out
• It’s not going to fun but who knows how long it will take. Pray that the Federal reserve can engineer a soft landing

My Modest Proposal

If you are a fan of show Seinfeld from the last millennium, you might recall episodes where the neurotic George Costanza achieves a series of successes by just doing the opposite of what he would normally do.  I have some ideas that are opposite of my Hell Freezes Over preferences and they might just hold the Piper at bay.

While I admit to being old and cranky about Illinois taxes and budgets, I also think that Illinois is a great state.  We have a ton going for us and the crown jewel of the state is the city of Chicago.  Chicago has world class sports, dining, museums, universities, architecture.  It’s located on beautiful lake Michigan, which is full of a lot of water.  Chicago is a transportation hub. It will soon have a casino.  Chicago is the reason Illinois is the Fifth Most Fun State and we should not settle for fifth place.

I think there are opportunities to combine the gifts of Chicago with some of our other statewide strengths. I think our solution lies at the intersection of Water, Fun, Taxes, Regulations, Unions, and Corruption. 

I am not a marketer and bet there will be better names for this initiative, but, for simplicity now, let’s rebrand Chicago as the Las Vegas of the Midwest or Las Vegas with Water.   With climate change and the drought in the West, Las Vegas is not sustainable.  Lake Meade is going to dry up at any moment and so is the fountain in front of the Bellagio.  People need to gamble and blow off steam somewhere with water.  This is our opening.  We just need few hooks to get people to visit. I think those hooks are enhanced amenities. 

We need more casinos.  If we are going to compete with Vegas, we need to build a lot more casinos.  It sounds like retailers are leaving Michigan Avenue so it should be easy to transform the Magnificent Mile into a gambling wonderland.  If that does not work, imagine the debaucherous entertainment district that could be built around the proposed Bears stadium in suburban Arlington Heights.  Either option will take a massive construction effort, which will be a good source of union jobs to replace those lost as our manufacturing base erodes.

Let’s legalize prostitution.  I am guessing Vegas has prostitutes, but not legal ones.  I am not advocating for human trafficking, just expanding women’s right to control their bodies.  JB likes to say Illinois trusts women, as he should.  Let’s keep trusting them.  Heck, lets trust men and gender nonconforming people too. I get that people may not support promotion of sex tourism for moral reasons. Those objections might be politically challenging.  I think we can overcome associated obstacles by mandating union membership for all sex workers to ensure safe working conditions while also providing a steady stream of political donations.  We will also need some strong regulations to prevent unauthorized disclosure of client information.  Convention attendees need to know that their personal information will be kept confidential for this to work.  It goes without saying that these services would be taxed to the maximum extent possible.

With gambling and prostitution in place, the next piece is clearly cocaine.  It has to be legalized with a slew of regulations to assure purity and quality.  We cannot have any fentanyl slipping into our legal cocaine business.  Nothing puts a damper on the cocaine business like the fear of fentanyl overdoses.  Cocaine is a rich person’s drug.  The prospect of easy access to pure legal cocaine will surely attract high end clientele with capacity to spend big money in the Vegas of the Midwest. High taxes will not be a barrier for this crowd.   I have to imagine that cocaine manufacturing is complex process that can only be addressed by union donors, I mean employees. 

The fly in the ointment is crime.  We are not going to successfully grow tourism and leverage our new amenities until we resolve Chicago’s crime problem.  I think there is an easy solution, but I had to dig deep into my George Costanza play book to find it.  Corruption and organized crime clearly intersect with politics, gambling, prostitution, and drugs.  We just have to embrace organized crime as key part of the solution.  With a little mutual understanding, I think natural incentives will work in our favor.  No respectable criminal enterprise will tolerate street crime that interferes with a lucrative business.  I am not sure if the Italians are still in this line of work. If not, the next best option is either the Mexican Drug Cartels or the Russian Mafia.  There are pros and cons to each, but I am sure both have the skills needed to deter your average Chicago car jacker, drive by shooter, or mugger. 

Isn’t it great how all the pieces fit so nicely together. I will gladly give credit to the enterprising politician who wants to run with this agenda for a small percentage of associated kickbacks.

Seriously, just vote no to Amendment 1 and pray that Jerome Powell knows what he is doing.