Remembering Terry Parke

Of all of the criticisms of State Rep. Paul Froehlich (D-Schaumburg) launched in recent days, the most ludicrous is that Froehlich is somehow responsible for longtime conservative gadfly Terry Parke's loss to Hoffman Estates Trustee Fred Crespo.

Let's look at the facts:

1. Terry Parke's voting record was his own worst enemy. Parke's 100% Pro-Gun, 100% Anti-Choice, 100% pro-insurance industry voting record was out of touch with suburban voters. He was hammered for it by the Crespo/Madigan campaign operation, and its the reason the Chicago Tribune handed Crespo the endorsement.

2. The district, it is a changin'. Parke walked the conservative line when it came to immigrant issues, enabling Crespo, a Latino, to mobilize the district's rapidly growing Latino population -- and other immigrants. According to the 2000 Census, Hanover Park is 27% Latino, 25% of the households in Schaumburg speak a language other than English at home, and in Hoffman Estates 30% of households are non-English speakers.

3. Parke spent money like Paris Hilton. Parke outspent Crespo $380K to $130K, but a closer look at Parke's filings with the State Board of Elections raises serious questions about Parke's resource management abilities. Parke spent $133,884 on a single Elmhurst consultant in five months, over $8,000 on newspaper ads (always a waste of money), over $3,500 on t-shirts, emery boards and other trinkets, nearly $2,500 in donations to local business groups, and over $3,300 on pizza and other food (one pizza party ran up a nearly $600 tab). As Burt Natarus proved, you can raise all the money you want, but if you spend it like Paris Hilton, it ain't gonna help your re-election efforts.

4. Cross bailed on Parke. The House Republican Organization made a total of $40,000 in contributions to Parke's Tier One race, mainly for staff, even though Terry Parke was telling Statehouse types back in the Spring that he would be Madigan's #1 target. By contrast, HRO spent over $200K on Aaron Schock's Tier One race in 2004 and a whopping $530,000 over six months trying to push John Caveletto over Kurt Granberg. Parke barely got more help than newcomer Sandy Cole did the same year, for a Tier Two race.

5. There's no evidence of voter suppression. The attack on Froehlich is that his organization laid down on Terry Parke and failed to get out the GOP vote. However, according to the State Board of Elections, voter turnout was up by 7% in 2006 and 1,300 more ballots were cast (compared to 2002, the previous non-presidential election). Interestingly, Jesse Macro, Parke's Democratic opponent in 2002, spent only $16,000 and got 7,140 votes without an ounce of help from Madigan. It's not difficult to understand why increasing spending on a race tenfold, sending in top notch staff and precinct captains would add 3100 votes four years later.

Finally, but most importantly, even if Froehlich is responsible for Parke's departure, its a little hypocritical for House Republicans to criticize him since not one of their caucus misses him. "Despised" is not too strong a word to describe how many of his former colleagues felt about Parke, especially his suburban colleagues, and especially female lawmakers. They used words ranging from "creepy" to stuff that can't be reprinted to describe him. Just as telling, despite decades of carrying water for the insurance industry and other business groups, not one single statehouse lobbyist has offered Parke a job, despite his months of searching.

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Be Careful What You Wish For

"If a man could have half his wishes, he would double his troubles" Ben Franklin once said. No one understands this better than House Speaker Mike Madigan, who has developed the genie-like knack of giving folks what they wished for in a way they never dreamed of.

In the waning days of the budget debate, Governor Blagojevich said it was his wish to pass a budget without giving Republicans a seat at the table. Blagojevich was assuming that would give him and Emil Jones the upper hand.

Blagojevich was wrong.

It appears to me that Madigan has given Blagojevich exactly what he asked for. A Democratic budget -- the only Democratic budget possible at this point -- has passed the Illinois House. And while it's on hold thanks to a motion to reconsider filed by downstate Democrats, pending an agreement on electric rates -- the measure has already received the required simple majority needed to pass the Illinois House prior to May 31st, and could become law if Emil Jones uses his super-majority to make it happen (note, Emil Jones might be thinking right now that a super-majority wasn't such a smart thing to wish for).

Granted, a supplemental budget will be needed to tweak the hastily crafted budget around the edges, but that supplemental can be given a post-Jan. 1 effective date so that it only needs a simple majority in both chambers. (SEE Update Below)

So, Rod Blagojevich can have his wish for a Democrats-only budget, if he's willing to lean on Emil Jones to get an electric rate deal done (note, ComEd might be thinking right now that the reverse auction wasn't such a clever thing to wish for, and state help buying Illinois Power before that), and if Rod's willing to capitulate to Madigan on every budget issue.

If anyone in the Blagojevich camp has any sense, they'll take that deal and run. History has shown that the longer and harder you try to squeeze Madigan, the more he makes you pay for it. It only takes one wish.

UPDATE - X1

Rich Miller makes an important point regarding the supplemental in the comments. It would have to be post-dated for June 1st. Still possible to pass a Democrats-only supplemental, but a bit trickier.

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Follow the Yellow Brick Road

House Speaker Michael "The Wizard of Oz" Madigan has spoken, and the Rod "The Wicked Witch" Blagojevich's Gross Receipts Tax is dead. Even if The Witch can't admit it yet.

The Wizard has also made it very clear that some sort of tax increase is headed out of the House, noting at various times recently that he doesn't think that a zero-growth budget is in the cards and that a tax increase seems inevitable.

So, where exactly are we headed? No one knows for certain what Madigan's thinking, except that he has announced that House Democrats will meet this Tuesday morning to discuss an "alternative tax plan."

Here are some things that could be on the table:

Corporate and Personal Income Tax Increase - $3.4 billion
The Civic Committee of the Commercial Club of Chicago (a big business group) has recommended an increase in both the personal income tax of 1% and corporate income tax rate by 1.6%, while the Center on Tax & Budget Accountability (largely union-backed) has recommended 2% and 3.2% respectively. These increases would generate $3.4 billion to $6.8 billion. Because a veto from the Governor is promised, House Republicans will have to be in on the deal, so if this is part of it, expect $3.4 billion.

Sales Tax on Personal & Entertainment Services - $1.7 billion
This is another area where there is common ground between The Civic Committee and CTBA, with the Civic Committee recommending a $2 billion expansion and CTBA a $2.2 billion. State Rep. Jay Hoffman has been kind enough to offer an exhaustive list of what would be taxed under HB 750. The Governor has taken special exception to the tax on hair cuts (insert Blagojevich joke here), without noting that every state around us also taxes haircuts. I expect some of the proposed service niches to be shelved for political reasons or due to the skill of their lobbyists. Just note, however, that businesses tend to offer less resistance to sales taxes because they are transparently paid by consumers, while the state allows the retailers to keep a significant portion of the tax. Municipal governments, too, get a piece of the action. Still, I'd expect this would be scaled back at the end of the day (taxes on haircuts and funerals), but I'm betting it could still bring in $1.7 billion.

Expand Gambling - $2 billion + $1 billion one-time
Legislation sponsored by State Rep. Lou Lang to create four additional Casino licenses, expand gambling slots at existing casinos, and allow slot machines in racetracks has already cleared the House Gaming Committee. Lang says the measure would bring in $3 billion the first year and $2 billion in additional years. The new casino licenses would go to Waukegan (Read: Senator Terry Link), the south suburbs (Read: Senator Emil Jones), O'Hare airport (Read: State Rep. Skip Saviano) and the City of Chicago (Read: Mayor Daley). Gambling is, as CapitolFax's Rich Miller puts it, "a tax on people who can't do math," while lawmakers who support it call it a "voluntary tax." While previous gambling proposals have often collapsed under their own weight, if Madigan puts it into legislation, it will pass. Senate President Emil Jones has wanted this for years, Senator Terry Link, who is credited for picking up two new seats for Democrats in Lake County, has wanted this for years, and Mayor Daley has wanted this for years. The problem for Madigan is that he doesn't want to leave our next Governor (Read: Lisa Madigan) with budget problems, and gambling revenues tend to flatten out pretty quickly, while the state budget grows with inflation. Gambling can and likely will be part of the mix, but it will never be the whole answer.

Closing Corporate Loopholes - $300 million
As Madigan noted during floor debate on the Gross Receipts Tax, he was one of 23 lawmakers that supported efforts by the Governor to close six corporate tax "loopholes" a couple years ago, to the tune of $300 million. Capitol regulars privately snickered of course, because there was little doubt if Madigan had been earnest about closing those loopholes, the bill would've gotten more than 23 votes. Madigan of course didn't want to be blamed by the Governor for standing in the way at the time, and two years later we see once again just what a chess master Madigan is. The fact that Madigan has resurrected the idea of closing loopholes now -- at a time when business groups can see their are much worse alternatives -- leads me to believe this will be part of the deal.

Alternative Minimum Tax - $400 to $500 million
Those looking to bring the governor on board are floating the idea of a Gross Receipts Tax on businesses that would be much more targeted than the Governor's proposal. How much revenue would be generated depends on where the cut-off is; the Governor has repeatedly blasted companies with more than $50 million in gross revenues that pay no taxes, so that seems like a likely target. House Majority Leader Barbara Flynn Currie pointed out in a speech to the Taxpayers' Federation of Illinois that corporations are only paying about $500 million less in corporate income taxes now than they were in 1980, so I'm using that number as the likely tab of an Alternative Minimum Tax.

I'm skeptical about the AMT for a few reasons. First, the Gross Receipts Tax by any other name is still a Gross Receipts Tax, and lawmakers who vote for it could still be nailed for voting for "Governor Blagojevich's Gross Receipts Tax." Secondly, it generates very little revenue compared to the political price, and lawmakers would still have to include expanded gambling, increased income tax, or expanded sales tax to make a dent on our budget woes, all three of which the Governor has previously said he'll veto. Third, Madigan mentioned during floor debate that taxing companies on gross receipts rather than reported income is a dramatic shift in tax policy, so he doesn't appear to keen on the idea.

And finally, the Illinois Constitution makes it clear (Article IX, Sections 2-3) that any form of a Gross Receipts Tax could be unconstitutional, and is certainly likely to be challenged. Section 2 requires corporate income taxes to be uniform, Section 3 prohibits a graduated corporate income tax rate and says that there can only be one form of income taxes on businesses. The GRT could be used to replace the corporate income tax, but any type of corporate income tax PLUS GRT/ATM appears to be prohibited.

Still, as long as its still floating around out there, I'll keep it alive for discussion.

3% Payroll Tax - $1 Billion
This idea has gotten very little attention, mainly because its tied to the Governor's "Illinois Covered" proposal. I think "Illinois Covered" is as dead as the GRT, and no lawmaker has yet to come out in support of a payroll tax of 3% on all businesses with 10 or more employees. Still, let's not forget it.

Sale/Lease of Lottery - $10 billion one-time, minus $650 - $1.2 billion per year
Next to the GRT, the plan to sell the lottery in exchange for more money for schools is probably the politically dumbest thing floated by the governor in the last year. Anyone involved in school funding debates over the last two decades knows that you don't put "lottery" and "education funding" in the same sentence. The idea got an ice cold reception from lawmakers on both sides of the aisle, as well as editorial boards.

The Gov has since retooled his idea slightly, calling for the one-time revenues generated from the sale/lease to go directly to a one-time reduction in state debt. That makes it politically more pallatable for budget hawks, but other problems remain. Chiefly, the Lottery currently generates $675 million a year for education, an amount that is expected to grow steadily to $1.2 billion over the next 20 years, so any sale of the Lottery creates a hole in the education budget that must be filled. In addition, GenTech, a client of Blagojevich fundraiser John Wyma, has already been identified as one of the companies most likely to bid on the lease -- and was even exempted from the GRT if it got the contract. Madigan is unlikely to hand such a windfall to a Blagojevich ally, so any measure allowing the sale/lease of the Lottery is likely to contain language similar to HB 1 that would prevent one of the Governor's campaign contributors from getting the contract.

A NOTE TO POSTERS: I'm sure lots of you are thinking that we are getting the cart before the horse when we talk about raising taxes before we talk about reducing spending. I hope to have a thorough outline of some of the spending proposals and cost-cutting proposals later this week, but given that this revenue discussion will be taking place tomorrow, I wanted to outline some of the things that will be on the table. Feel free to e-mail me with your cost-cutting or spending ideas.

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Madigan and taxes; Rep. Monique Davis and HB232; and the Olympics

Sat AM odds and ends:

Daily Herald on our lawmakers' appetites,

Current state taxes can no longer satisfy lawmakers’ spending appetites, all but ensuring a tax increase is coming this spring, House Speaker Michael Madigan recently told a suburban audience.

“Before we finish the budget in May or June, Illinois is going to need a tax increase,” said Madigan, a Chicago Democrat, during an appearance this week at the College of Lake County’s Lakeshore Campus in Waukegan. “You’ve heard it many, many times: We need more and better education. That takes money.”

Collin Hitt on one lawmaker's efforts to make sure technology not part of better education,

Amidst efforts by the Chicago Teachers Union to shut down the Chicago Virtual Charter school,State Rep. Monique Davis (D - Chicago) has introduced legislation designed to stop public schools from funding a form of distance learning called"virtual schooling."

Illinois traditionally has been supportive of greater student access to learning technologies. The state board of education has funded and maintained the Illinois Virtual High School for ten years. Lt. Gov. Pat Quinn recently has begun promoting his I-Connect Initiative to provide every seventh grader with a laptop computer.

Introduced in January, Davis' legislation to prohibit virtual schools (HB232) working its way through committee would ban the Illinois State Board of Education and local school boards from, "establishing, maintaining, or in any way supporting any virtual schools or virtual classes for elementary or secondary students in [Illinois]."

The legislation has subsequently allowed for "virtual classes" in public school, yet still denies charter schools funding for virtual learning of any kind, even with privately-raised funds.

And the Gov wants to use some of the money Illinois doesn't have to underwrite Chicago's bid for the Olympics,

Like their counterparts in California, Illinois taxpayers could be on the hook to help bankroll Chicago’s bid to host the 2016 Olympics.

On Saturday, the U.S. Olympic Committee will decide whether Chicago or Los Angeles will represent the United States in the international competition to host the summer games.

If Chicago gets the nod, Gov. Rod Blagojevich said he will commit $150 million in state funds as a safety net in the event the games lose money.

Great, just great....

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GRT and The Art of War in Illinois

There are three books I consider required reading for all policymakers, political activists, and political junkies. The Art of War is first on the list (I'll talk about the other two soon). First not because it takes pre-eminence over the other two, but because it's the most venerable, and because so many folks make reference to it without ever actually having read it. And this is a book that bears re-reading.

I was reminded of Sun Tzu today by CapitolFax. Those of you who subscribe to CapitolFax (if you don't subscribe, you really should pony up the $30 a month) know that CapitolFax founder/political reporter par excellence just spent several intimate days with Governor Blagojevich on his statewide bus tour. Based on his time spent with the Governor, Rich Miller offered up his analysis of the Governor's persona as someone who is always itching for a fight. [Editor's note: if you want to read what Rich Miller says, you need to subscribe]

Sun Tzu would not be impressed with the Governor's gladiator mentality. The ancient strategist, mandatory reading in all military officer courses through out the world (Hitler allegedly based his Blitzkrieg attack on the writings of Sun Tzu), offers us this surprising pearl of wisdom:

"To win a hundred victories in a hundred battles is not the highest excellence; the highest excellence is to subdue the enemy's army without fighting at all."

The Governor has also made it clear in many statements to the press that he's willing to drag out this fight over the GRT as long as necessary, and expend great resources -- political capital, state staff time and resources, even his own political funds and those of his allies. Sun Tzu warns against this exhaustively, but the clearest passage is this:

"When you engage in actual fighting, if victory is long in coming, then men's weapons will grow dull and their ardor will be damped. If you lay siege to a town, you will exhaust your strength.

Again, if the campaign is protracted, the resources of the State will not be equal to the strain.

Now, when your weapons are dulled, your ardor damped, your strength exhausted and your treasure spent, other chieftains will spring up to take advantage of your extremity. Then no man, however wise, will be able to avert the consequences that must ensue.

Thus, though we have heard of stupid haste in war, cleverness has never been seen associated with long delays.

There is no instance of a country having benefited from prolonged warfare."

We see this happening now. While Blagojevich's hopes of passing his original GRT have passed, and his dream of passing any form of the GRT grows dimmer every day. Meanwhile, he's been weakened politically, and his top ally Senate President Emil Jones becomes increasingly weakened by the lack of progress on electric rates and fractures within his caucus over the GRT. At the same time, Speaker Madigan and Lt. Governor Pat Quinn are growing in strength, without actually expending any of their original resources at all.

The top beneficiary of the Governor's extended anti-business campaign, ironically, is the Illinois State Chamber of Commerce. While the State Chamber is spending money and resources on organizing opposition and t.v. ads, I'm betting that their fundraising is far outpacing their expenditures. GRT has also giving them a new-found relevancy in state politics, after a period of dormancy. A new tool for organizing local businesses and expanding their base. And a key ally in the Illinois Press Association.

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