In what counts as one of the worst moments in time for Illinois state government, Antoin “Tony” Rezko has been convicted by a jury of his peers on 16 counts of high level political corruption. Essentially, jurors found that Rezko abused his position in the governor’s kitchen cabinet by masterminding an extensive—and illegal—pay to play scheme, that forced businesses looking for state contracts to pay millions of dollars in kickbacks. Even in a state that has had more than its share of corrupt public and quasi-public officials, the sheer scope and audacity of Rezko’s actions—coming on the heels of Governor Ryan’s corruption conviction—has to shake the confidence of even hardened, political junkies in the institution of state government.
This lack of public confidence in all likelihood will impede the state’s ability to resolve the most significant issues that have vexed Illinois policy makers for decades, involving everything from inadequate, inequitable school funding, to slowing economic growth and the biggest of political bugaboos, tax policy. To fix any of these hot button problems, there’d have to be major voter buy-in and bipartisan cooperation, which is pretty hard to get without public confidence in the system. Consider the state’s tax policy as an illustration.
Illinois has one of the worst performing and unfair tax systems of any state in the country. Due to its structural failings, the state’s approach to revenue generation simultaneously creates two, fundamental problems that both impact all public services and raise broad issues of economic justice. The first problem is simple enough. State revenues don’t grow with the modern economy, because Illinois doesn’t tax the modern economy. But the cost of providing public services absolutely do grow with the economy, even if no service is added, expanded or enhanced in any way. The net result is deficit after deficit, and the financial inability of state government to continue the same service levels from one year to the next—without engaging in fiscally irresponsible practices, like stiffing healthcare providers on Medicaid payments or underfunding actuarially required pension contributions.
Then there’s tax fairness, or to be more precise, the complete lack of it in the Illinois system. U.S. Census data demonstrate that the vast majority of income earners in the country—80 percent—have seen their real incomes flatten out or decline over the last two decades. Virtually all growth in the nation’s (and Illinois’) economy has gone to the wealthiest 20 percent. Ignoring that, Illinois imposes a state and local tax burden on for middle and low income families that consumes over 10 percent of their annual earnings, while placing less than half that burden on those families fortunate to have incomes that actually increase—significantly—after inflation. Effectively, this means Illinois focuses tax burden on families paying from their growing poverty, rather than those who’d pay from their increasing wealth.
To fix that, Illinois needs tax reform that contemporaneously modernizes the system while creating more tax fairness. That, in turn, requires a bipartisan effort to reach out to voters and explain why Illinois government needs more revenue, not just to balance its budget, but to make needed investments in things like education and infrastructure that will grow the state’s economy—and why the state needs to shift tax burden from the bottom and middle to the top. Hard to have that difficult conversation if no one trusts the institution of government in the first place.
In fact, the biggest victims of the Rezko trial are the vast majority of Illinois’ state legislators, in both parties, who work hard, play by the rules and nonetheless have their reputations sullied, and hence ability to serve their constituents diminished, because of the taint in the public eye that Rezko’s shenanigans creates for all elected officials.
To move forward, two, significant aspects of state government must be cleaned up. Start with campaign finance reform. For too long, Illinois has been the wild, wild west on campaign finance rules. That has to end. The state needs stringent limits on the amount that can be contributed to candidates by individuals, businesses and PACs. Hard to have pay to play politics if you can’t pay much hay in the first place.
Second, state contracting processes need a thorough vetting. Legislation recently submitted to the Governor, that would prohibit businesses contributing in excess of $50,000 to an elected official’s campaign from receiving contracts from that official, is a good start. The hope is the Governor will sign it. The state should also do away with all no bid contracting, make public the terms of all bids, and have an oversight committee, comprised of say, representatives of both parties and individuals with pertinent expertise in the area, that approves any contracts awarded. Yeah, that may slow things down a bit, but from the evidence submitted in the Rezko trial, Illinois has been spending too much time in the fast lane to begin with.
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Ralph Martire, executive director of the Center for Budget and Tax Accontability, is a regular columnist for The Chicago Daily Observer.