By DONALD SEVENER

Adlai Stevenson

Running again as the Democratic candidate against incumbent GOP Gov. James R. Thompson, Adlai E. Stevenson III speaks on the issues, from taxes to education, and offers criticism of his opponent, state policies — and himself.

THE HEIR to one of the most famous names in Illinois political history, Adlai E. Stevenson III, is trying for the second time to capture the office held by his revered father. I spoke with the Democratic candidate for governor about three weeks after his slating by the party's state central committee for a rematch with incumbent Republican Gov. James R. Thompson. We chatted in his suite at the State House Inn in Springfield.

Sevener: Aren't you tempting fate by staying in the Governor's Suite?

Stevenson: Do you think I'm being presumptuous? I've stayed in this suite since 1965, just after it was built. I was in the legislature. The Abe Lincoln used to be the Republican hotel; Democrats would stay in the Leland, I think. And then the St. Nick was built and that became the Democratic hotel. And the two sides of the legislature, everybody would literally go to one hotel or the other; there was no common meeting ground.

Sevener: You've accused Gov. Thompson of lying about the need for a tax increase in the '82 campaign. Would you have raised taxes if you had been elected?

Stevenson: No! [Pause] Let me qualify that. During the campaign, I said if anybody could avoid increased taxes, it was me, because I was the only candidate with plans for the state's economic development, which would have produced increased revenues, and for economy in government. By the time the election was over, the financial condition of the state had deteriorated to such a point that a tax increase was not avoidable. The governor proposed a large, permanent increase in the income tax. I don't know what I would have proposed. I'd like to think I would have had enough wisdom not to have made that proposal. I said that about him because the only alternative explanation for his behavior was that he didn't know what the economic condition of the state was, and I find that unbelievable.

Sevener: Do you see any need now to increase tax revenues?

Stevenson: No, no. Tax revenues have just been increased again for about the twelfth time under the governor. I see innumerable opportunities for economies. The auditor general has reported the state has over $2 billion in uncollected debt. That is just one example.

Sevener: Well, mention a couple more. You say there are innumerable opportunities.

Stevenson: Well, I can tell you some of the past symbols of the fiscal profligacy of this government. You know, they had a party not long ago [to dedicate the State of Illinois Center in Chicago] for which the taxpayers had to spend $120,000. And one ribbon to decorate the State of Illinois Building cost $15,000. The State of Illinois Building itself is a horrible example; and I don't mean just the hundred million dollar cost overrun. It is now the world's most expensive building to operate. We're in Springfield, I pick up the paper and find the state is buying another building for roughly twice the appraised value of the building. The governor loves parties. I read a story about another party held by the Bureau of Employment Security not long ago. I don't know how much that cost the taxpayers. Some of these examples are absurd, except that they typify what has been going on in state government.

February 1986/Illinois Issues/7

I want to do what I did as state treasurer. I didn't know how I was going to save money [but] I had been around long enough to know that there isn't an agency of government that isn't wasteful. I didn't increase expenditures in four years in that office, and we quadrupled the earnings on the investment of state funds and made it the model of the nation. In other words, I brought the concept known in the private sector as increasing productivity to the government. That's what I'm going to do to state government. By and large it requires two things: some ideas, and most of all the courage to do it. The ideas are frequently obvious, but the courage to fire people, to make unpopular decisions is frequently lacking.

Sevener: Are you satisfied with the present tax structure? Would you favor, for example, a local income tax for municipalities or school districts?

Stevenson: No, I doubt it. I want to relook at that question, but I came out against a local income tax in the last election and for reasons I think were sound; they included administrative complications. We're going to propose a comprehensive review of the tax structure in Illinois. But I look at these questions very much in terms of economic growth. You hear people, especially Democrats, talk about fairness. What is fair about a tax structure that puts you out of work? Look at the savings level of our industrial competitors, rates of investment and rates of productivity growth. Investment is going to create jobs and put people to work. So, where we'll come out, I cannot say, but it will be, I believe, a recommendation for overhaul that is sensitive to these questions of fairness and equity but also to the need for investment in Illinois; the lack of it produces the supreme unfairness, the crime of poverty.

Sevener: Speaking of investment, you've criticized the package of incentives the state and local governments provided to obtain the Diamond-Star auto plant in Bloomington. Did we just pay too much or is there something fundamentally wrong with that approach to economic development?

Stevenson: Well, I'd say both. First, it's great that we're attracting the plant; I'm delighted. But we shouldn't have to pay over $275 million. No other state would do that. Very few other states, if any, would have to do that. Tennessee paid effectively nothing for the larger Saturn plant, which will make American automobiles. The taxpayers of Illinois are called upon to subsidize the production of automobiles that will be produced from Japanese components. No other state has come anywhere close to paying that kind of price. The governor gave away the store. You can't give away the store more than once, maybe twice. Now Mr. Iacocca [Chrysler Chairman Lee] wants the store again at Belvidere.

'. . . first we need a commerce commission
that will represent consumers as well
as producers of energy. I want to get rid
of the buddy system'

The subsidies for one company are paid for by all the other companies. This is a tragic reflection of the state's economic environment. We have to pay this price because businesses don't otherwise come here. Now, there's more to it than that. Even with an economic environment that ranks 42nd according to the Alexander Grant study, we shouldn't have had to pay that much. We shouldn't have to pay $12,000 an acre for farmland outside Bloomington-Normal. My cousin over there paid $2,000 for comparable land recently. I know Japan. I have spent a good part of my life negotiating with the Japanese. They're tough negotiators. But they can spot a pigeon and they spotted a pigeon. This governor had to get that plant because he had an election coming up and they took him to the cleaners.

The other governors wouldn't do it.

This governor — with a quarter of all manufacturing jobs gone in five years, the highest level of employment in all the industrial states . . .

Sevener: You mean unemployment? You said employment.

Stevenson: Unemployment. The worst record of employment growth for all the states in the last eight years. So, once again, economic decisions are made for political purposes. The tax-payers pick up the tab, the state is embarrassed, and other businesses are ultimately discouraged from coming here because of what that says about our economic environment and because we cannot give the store away again.

Sevener: Well, how would you have done it?

Stevenson: I would have worked, starting 10, 15 years ago when I was the first in the Congress to warn of the coming threat to our industrial competitiveness. I would have done it through all the ways suggested in my last campaign — they include cooperative research, more support for the more relevant education, a modern banking system, an effort to export our products to the world, export trading companies. And most of all I would have been working to improve what the businessman looks upon as the most critical element of the state's economic environment — it goes well beyond infrastructure, to all the costs of doing business. I warned of the cost of excess generating capacity [of electricity utilities]. We didn't have to have a commerce commission that simply ratifies the request of all the utilities, giving us almost the highest utility cost in the country. We do have the highest local tax burden; we have workman's comp and unemployment insurance costs that are much higher than the norm. All these costs of doing business enter into what I call the economic environment. And everything . . . comes back to the simple question of good government. Do you have good government? Do you make decisions because they're right or because they're politically expedient? Well, the only thing I've ever offered in my life is good government.

Sevener: You mentioned the excess capacity. Now that we've got it, what should we do about it? Should consumers have to foot the bill for this?

8/February 1986/Illinois Issues

Stevenson: Theoretically, the answer is: Promote economic growth and utilize this excess capacity so the cost at least is spread over a wider base. But we're caught up now in a vicious circle. The high cost of electricity has helped to drive industry away, and costs go higher. So, first we need a commerce commission that will represent consumers as well as producers of energy, I want to get rid of the buddy system. Secondly,... I am taking a very hard look at Braidwood [nuclear plant]. This would only affect Commonwealth Edison, but at present it looks to me as if the units at Braidwood should be mothballed. That is the only way I see of immediately passing through substantial costs savings to consumers.

Sevener: Who pays for the investment they've already put into it?

Stevenson: Well, that decision has already been made. It's been passed through to the ratepayers. It's a very difficult question, and it varies from utility to utility. If what you're getting at is whether stockholders should pay more, the answer isn't entirely clear to me at the moment. Commonwealth Edison is already having to pay a very high dividend, it sounds like, and a very high rate of interest. And the rate of interest gets passed along to the rate base, too. So, that's just a little too glib for me at the moment to say we ought to dump all these costs on the company. I'm not sure that's possible. It's something that we're looking into. But the main answer is to cut off unnecessary costs and then to try to absorb the costs for a broader rate base.

Sevener: Gov. Thompson is credited with bringing business and labor together. Much of organized labor has been cool to your candidacy. Is that a barrier to being able to get business and labor to work together?

Stevenson: Well, first of all, I don't accept the assertion that labor is cool to my candidacy. Yes, some labor leaders are cool. Many are not, and by and large the working men and women are supportive. Thompson is, according to one interview I saw in Illinois Issues, a self-admitted broker. His perception of the office is to broker interests and to reach the lowest common denominator and that is what is wrong with him as governor. He's not a leader; he doesn't represent the public interest; he brokers special interests. Furthermore, he has not brought business and labor together in a systematic attempt to improve the state's economic environment. This is what I proposed in the last campaign.

Sevener: Some people believe Illinois is really three states. How as governor would you deal with the provincialism that strains relations among Chicago, its suburbs and downstate Illinois?

Stevenson: I have to continue emphasizing that we're all in this together. We're going to let our house divide and fail as a state or we're going to work for each other. And not only Chicago, suburbs and downstate, but bridge the racial lines, too, the racial differences which are polarizing Chicago. If anybody can do it, it's the governor, and by his example as well as his agenda. It must be fair to all sections of the state. It must be responsive to all the needs and all the regions. And I'd go one further to suggest that this is a very pluralistic, diverse state that breaks down into many more regional differences than those you have suggested. You get into southern Illinois and it's South. I can remember when that was cotton country. To say the least, you don't exploit these differences for political purposes. We haven't been immune to politicians who have been known to do so.

Sevener: Could you give an example of that?

Stevenson: Oh, I wouldn't give you an example of persons, but an issue. Transportation, for example; the Regional Transportation Authority [RTA] in Chicago. I think there have been tendencies on the part of some politicians to exploit divisions which shouldn't have existed over transportation policy quite generally, not just with respect to the RTA because it was politically popular to do so. Somebody has to go out and explain that the RTA is important downstate as well as it is in Chicago. Highways downstate are important to the welfare of the Chicago area. Ultimately, the objective to the pursuit is not only a fair and responsive government, but an economic environment that attracts investment and produces growth so we're not tempted to fight over pieces of a shrinking pie. We can help to pull the state together by bringing about better conditions or job opportunity and profit opportunity in all parts of the state. It wasn't very long ago, in fact in 1982, when we had 22 counties fighting for a penitentiary; it was a way of creating jobs. We were and will be more united as a state when we aren't reduced to such extremes.

February 1986/Illinois Issues/9

Sevener: Illinois receives a low return on tax dollars it sends to Washington. Does this matter?

Stevenson: Yes, it matters, which is not to say it's easy to do something about. We are punished for several reasons. Defense spending has gone up rapidly under Reagan. We are not a site of many bases, nor of many major defense suppliers, so we lose out to states that are. And secondly, many of the formulas for distribution of funds under federal programs have a redistributive purpose; they redistribute money from high-income states to low-income states, and Illinois continues to be a relatively high-income state.

There are some things that need to be done to give Illinois a better return on the dollar. But I think we're going to find federal monies . . . cut back across the board. In which case, this becomes much less of an issue but more of a problem.

I served in the U.S. Senate for two terms, and one of the first things I did was set up a project office. And we went to work, and we had the fastest rate of increase of all the states for discretionary funding for projects. That was my first full year in the Senate. When we got to that level it pretty much stabilized; I think it's a little bit lower than that now. But I began to realize then that there were real limits as to what I could do. I can't create projects as a senator. A state government can create projects; municipal governments can; the private sector can. The senator and the congressman are just advocates. Without the creation of the projects to qualify for the federal assistance, there's not much our congressional delegation can do. They can work on these formulas. But with respect to this discretionary money — lock and dam at Alton, Columbia-Waterloo airport — you are an advocate. I represented a state that wasn't trying to help itself. I had no help from the state with respect to the dam at Alton; that's one of the biggest public works projects in recent history. The state, as far as I was concerned, didn't exist. I wanted to get the space telescope for Argonne [National Laboratory] or some other site in northern Illinois. No support. So, I became convinced then and am more so now, the degree to which we get back the dollar depends not on members of Congress but on the state government and what it can do to galvanize the private sector and other units of government and put together imaginative, deserving projects and then go to the congressmen to get their help.

'The result is not only educational
opportunity, which is not adequate, it's also
largely responsible for the
highest local tax
burden in the Midwest'

Sevener: Do you have some in mind?

Stevenson: Some projects in mind? Oh, well, yeah, I do. But I have to, at this early stage in the campaign, be somewhat generic about them. I have transportation projects in mind. A special interest to me is cooperative research projects — projects that bring university-based research facilities together with companies in the private sector and the state government to develop new ideas and then commercialize the ideas to spawn new industries. We have the rudiments here: We have the great land-grant college in Champaign-Urbana together with the other universities; we have the USDA [U.S. Department of Agriculture] laboratory in Peoria; we have agribusinesses such as Staley and ADM. We have to pull them all together to develop new products to be made from corn and beans, for example, and nonfood products as well as food. We should be producing and marketing finished products. We don't begin to realize the downstate industries — John Deere, for example — started exactly that way. The John Deere plow was the new idea of its time.

Sevener: Are you satisfied with the present level of state spending for education?

Stevenson: No, not at any level. And even with the recent increase for elementary and secondary education, the state's share of total spending when adjusted for inflation has declined by 3 percent a year for each of Gov. Thompson's years, leaving us still as one of the states with lowest levels of support for elementary and secondary education. The result is not only educational opportunity which is not adequate, it's also largely responsible for the highest local tax burden in the Midwest. So, yes I want to increase state spending for education.

Sevener: Where would you spend it?

Stevenson: I can't make all the decisions for all the schools; I don't believe in that. It'll go to schools with some guidance from the [State] Board of Education and also from the state. I think school classes in many instances should be reduced in size. It looks to me at present that some more money needs to be spent on the training of teachers. I also want to help make what we do in our educational institutions more relevant to the requirements of the student. A child who enters school today comes out in a radically changed world. We don't begin to perceive the requirements for education in that world.

10/February 1986/Illinois Issues

Sevener: Which are?

Stevenson: Well, I think we'd better start finding out. It's a world in which there will be no more blue-collar workers. It's a post-industrial world in which the brain animates evrything. And yet when we look at our schools, and not only our schools but at adult literacy, and contrast what's happening in Japan, you have to conclude that we're failing. We may not be able to compete. We've already lost one-quarter of all of our jobs in manufacturing in the last five years. I count education as the principal reason for this failing competitiveness in this newly competitive world. Japan, with an economy of roughly less than half the size (of the U.S.), is already producing twice as many electrical engineers. Those kids go to school 11 months a year, from early morning to late in the afternoon; they all learn how to speak English, They don't take driver's education. They're computer literate. They're learning all the basics, and they're becoming highly animated, motivated, hard working citizens. That's cultural as well as educational. That's the kind of world in which our young people are going to have to compete. And we're not preparing them for it. At the far end of the scale, we're preparing our young people for lives of total dependency. You see this in its most extreme form in our inner-cities where we're creating a subculture. So, I don't think it's enough to say you just put money into the schools. You have to figure out what to do with that money. And I'm not convinced that we're making as good a use of it as we could. For example, driver's education doesn't even produce better drivers according to all the available evidence that I've seen. Maybe by putting more into reading, writing, languages we'll produce better drivers as well as better citizens. And employable citizens.

That fits into the whole economic development scheme. We want to do some sectoral analyses to figure out what Illinois' comparative advantages are, what the requirements of the economy, including the job market, are going to be 15, 20, 35 years from now. And begin to anticipate the phenomena instead of reacting to them too late, long after the Japanese and the Germans have done so. What the analyses will produce I can't tell you; we haven't conducted them at all. But I hope to involve our universities in that exercise and then use the data to also inform some of our economic decisionmaking. Build Illinois? We're building golf courses and bicycle trails and parking lots. There is no effort there either have to figure out what the comparative advantages are or where we will get the highest return, whether it's robotics or machine tools or biotechnology, or food processing. We'll buy another state fair [in Du Quoin] and subsidize it indefinitely. Because we don't do that kind of analysis in Illinois, we don't make economic decisions for economic purposes whether it's education, economic development or anything else; the reason is almost always politics and political expediency.

Sevener: Should teachers be paid more?

Stevenson: Yes, but don't ask me exactly how much and for which teachers. But I think to attract the best-qualified people into that profession, we're going to have to pay teachers more. But there are going to be some changes in this profession that seems to me ought to reflect the changes in the marketplace. Some teachers may get more; some teaching positions may no longer exist.

Sevener: Do you see virtues in small schools and small school districts?

Stevenson: I don't see virtues in very small schools or very large schools. I don't see a clear correlation between size and either efficiency or student achievement, except in the extremes where both suffer as a result of the smallness or the very large size of schools.

'He loves politics, but he doesn't
have much interest in governing. He's never been
known to voluntarily take an
unpopular position . . .'

Consolidation is an ongoing process and it should be encouraged. But it looks to me as if the duly enacted procedures, which require sequential planning for consolidation, are reversing the process, creating resistance to consolidation, scrapping plans that were in place, and in short, leading not to rational consolidation but to a lot of anger and near chaos, especially in rural school districts.

Sevener: What is Jim Thompson's biggest mistake?

Stevenson: One of them is his attitude toward [being] governor, which is the antithesis of leadership. And that's carried out also I think by his indifference to governing. He loves politics, but he doesn't have much interest in governing. He's never been known to voluntarily take an unpopular position, and he rules by the buddy system. Qualification for service is loyalty to him not to the public. Now he's paying the price. It won't be long before he pays the price for his political expediency. It always catches up to the public servant sooner or later. Sevener: What is Adlai Stevenson's biggest mistake?

Stevenson: Biggest mistake? I think history is already dealing kindly with my record in the Senate; I've been right.

But [pause] oh, I can think of many things I'd have done differently with the benefit of hindsight. I'd have been more aggressive in the last campaign. In the last two years in the Senate . . . I'd have been a little more diplomatic. I was unnecessarily confrontational. That was partly reflective of near exhaustion.

Very early in my career, I was preoccupied with reform — with — oh, starting in the legislature, conflicts of interest, lobbying reform. I led many of the efforts to reform the Senate. And, I guess if I had it to do over again, I'd have been much less interested in institutional changes. That got totally out of control in the mid-seventies after Watergate and Vietnam. We went to an extreme in our attempt to govern the government. Reform became an end in itself. And it became an excuse for ducking all the hard decisions. Look at campaign finance reform. Before reform, slush funds were of questionable propriety; now they're regulated. We were doing a much better job of controlling the budget before we had a procedure to control the budget. Crises in education, so you create a Department of Education. Same for energy. Sunshine laws — mea culpa, I was in the forefront of that one [to open deliberations and government records]. We didn't let the sunshine in; we let the lobbyists in.

Politicians lost their courage. They lost their old political bases of support: Political machines broke down; political parties broke down. And they were left alone and vulnerable, and they lost their courage. And now they're out there naked and in the open and very susceptible to that money that comes in.

Donald Sevener is a writer for the Illinois Times in Springfield.

February 1986/Illinois Issues/11