The Civic Federation’s Laurence Msall Discusses Illinois’ Dire Finances, Reform

Interview conducted and condensed by Jeff Bailey

Laurence Msall

I remember talking to you nearly a decade ago, and at the time, Illinois and its municipalities were dead last among the 50 states in funding public worker pension obligations. The hole was $50 billion. We’re still dead last, and the hole has grown to more than $100 billion. Is this our worst fiscal problem?
If not the biggest problem, it is having the biggest impact on Illinois’s inability to stabilize its finances. Illinois has the worst-rated credit of any state except California. We have the expectation at the state level of government of being able to continue to spend regardless of the revenue.

Delusional, in other words. If we’d tackled pensions a decade ago—actually funding the damned things and also requiring workers to chip in more, work a bit longer, collect a little less—could we be fully funded by now?
We probably would be on the road to full funding. Because the hole was so deep, it’s not likely. But the gap could have been reduced.

What needs to happen next?
The state moves forward on reforms for existing employees. It already [reduced] benefits for new employees.

It can be discouraging being a citizen in these parts. Illinois, Cook County, and Chicago are all financial basket cases, and poor management has compounded their problems. If you had to rate our current leaders’ will and skill to fix things, how would they stack up, from best to worst?
Toni Preckwinkle has shown amazing promise and success at getting her arms around a very dysfunctional [county] government. Mayor Emanuel has been in office less than 100 days [as of this interview] and has not had to produce a budget. But he is saying the right things. He has teams of people working on the right things. We see a lot of positive signs. Illinois has been facing a severe financial challenge for several years, and though it has taken initially modest steps, it has not effectively balanced its budget. The 2012 budget overestimates revenue by at least $1 billion.

You didn’t mention Governor Quinn by name, but I will.
Governor Quinn has been in office the longest of the three. But he has been the least effective at marshaling the legislature. He inherited a mess.

Any state or municipal governments out there that are role models for us? Phoenix gets mentioned for its system of making public sector departments compete against private companies to hang on to work.
There are things in a lot of governments that Chicago and Cook County could emulate. New York has fewer management levels in its police department.

Your group takes in $1.3 million a year from foundations and other donors, and your staff of 12 pumps out research recommending public entities behave in more businesslike ways. What’s the batting average in getting your advice taken?
It’s hard to assign a batting average. We tend to hit a lot of singles. Performance management at the County Board [pushed by Preckwinkle] has its roots at the Civic Federation. Chicago City Colleges recently passed a budget that followed all the recommendations the Civic Federation has been giving them for years.

 

Photograph: Bob Stefko

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