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The state of the State


In pursuit of public policy amid the campaign


Our series of interviews with the gubernatorial candidates concludes in this issue. Those who pore over the articles in pursuit of public policy perspective will be disappointed, although the series was conceived as precisely that kind of an in-depth exercise. Take, we said, major issues like the property tax, school funding disparities or the state's tax structure. Give the candidates — Secy. of State Jim Edgar, the Republican, and Atty. Gen. Neil F. Hartigan, the Democrat —plenty of time and lots of space to put their views in context. Give our readers an insight into how the two men think.

So much for our dreams. We would have had better luck crafting a Middle East peace plan. We tried to discuss Illinois' tax structure, specifically the idea that because one-third of Illinois' general funds revenues do not grow annually (only income and sales taxes grow with inflation), revenue growth always trails inflation. That leaves governors to choose between spending cuts or new taxes just to maintain programs. Republican nominee Edgar rejected the premise of a revenue problem outright; Democratic candidate Hartigan was not buying it either.

Such complex public policy questions have little relation to politics today. What matters to a candidate is avoiding mistakes. Responses are guarded lest an answer be turned into a 30-second advertisement attacking the candidate. The brouhaha over what Neil Hartigan said and did not say, what he meant and did not mean, in our human services interview (see box on page 17) illustrates that caution.

Timing also worked against complete discussion. Campaign positions are timed for the most impact. By September 14, the final date upon which we could do the interviews, the Hartigan campaign had not finalized its education position. Without specifics, Hartigan said he could not go ahead with the interview.

Nevertheless, the interviews offer insights worth reviewing. First, some impressions: Hartigan was more thoroughly briefed on the issues, citing numbers and statistics; Edgar appeared less briefed, responding from his government experience as to what he would and would not do. Both men were cautious about venturing into uncharted waters. The Edgar interviews went more quickly because Edgar came more directly to the point than did Hartigan.

In the course of the interviews, Hartigan reiterated a series of themes. The ides that Illinois needs to identify its place in the global marketplace surfaced in the economic development interview. Hartigan raised the identical point in the interview on government finances and human services.

Another recurring Hartigan theme was the need for planning. He blamed lack of planning for problems with state finances economic development and human services. In each case he applied business terms to say that Illinois needs to indentify

10/October 1990/Illinois Issues

needs, evaluate resources, develop a strategic plan and establish a critical path. The need for the planning steps means that Hartigan does not now have solutions for all the problems he identifies. For example, he wants to eliminate 2,500 state jobs but cannot say which jobs until doing his performance audits.

Themes similarly run through the Edgar interviews. One is that change for the sake of change is not worth the effort. Edgar repeated in each interview that moving the boxes around on an organization chart accomplishes little.

A related Edgar theme is that change on a grand scale, even if warranted, is immensely difficult to accomplish. For example, Edgar says that if Illinois were starting all over, he would not advocate that property taxes be used to pay for schools because there is little relationship between property and education. Rather than starting anew, he says the most practical approach is fixing the present system.

Those themes are reflected in the specific proposals made by each candidate. In human services Hartigan sketched in broad terms a plan to increase the level of human services. Hartigan would switch the focus to the individual. He talks about making state government an ombudsman for those who need state services. Such substantial changes will cost money. Edgar, in contrast, sets a more limited agenda for human services. He says that lack of money will limit human service expansion. Edgar's more modest changes would require more modest expenditures. The same difference in effort appears in economic development. Hartigan offers a number of specific programs to boost Illinois' efforts to help the economy. Many involve public/private partnerships, using public money to leverage private investment. Edgar says that the state ought to tack off, let the private sector take care of itself and be careful not to impose burdens on business.

But human services and economic development are not the issues in this campaign. Not even education, both candidates' avowed No. 1 priority, is the key issue. The campaign centers on taxes.

The tax debate has swirled around extension of the two-year temporary income tax surcharge — the 20 percent increase in individual and corporate income tax rates that will expire on June 30.

Edgar said soon after the tax became law that it should be made permanent. In March Hartigan came out against continuing the local government half; in September he followed suit by opposing education's half of the surcharge. Hartigan has attacked Edgar's support for what Hartigan describes as "the largest permanent tax increase in Illinois history." For the record, both candidates supported the largest temporary tax increase in Illinois history when it was before the General Assembly in 1989.

While Hartigan has his anti-surcharge extension position, Edgar has strong anti-tax positions of his own. Edgar has said that he will approve no new taxes for four years. (He does not consider reimposing the surcharge a new tax.) Hartigan has made no similar pledge and says it would be irresponsible to do so before completing performance audits and spending cuts.

There is another tax issue: the growing resentment of property taxes. Edgar believes the problem is centered in the Chicago metropolitan area, and his plan would address the problem there. Edgar would limit tax levy increases to 5 percent or the rate of inflation, whichever is smaller. He would exclude new construction from the computation.

Edgar's plan would provide relief in areas where rising home values are driving up taxes faster than homeowners' incomes. It does nothing for depressed rural areas where property values are declining and local governments arc increasing tax rates to maintain the same levy. Those citizens are paying higher taxes on property that is becoming less valuable.

Although imperfect, Edgar's plan is specific. Hartigan's is general. In announcing his budget-cutting plan on August 13, Hartigan offered his views on property taxes: "The way to keep property taxes down is for local government to do the same kinds of things I've proposed today for state government. Eliminate the duplication. Eliminate the waste. Cut spending and stop the games."

To control state taxes you must control state spending, and toward that end both candidates have plans to limit the number of state employees. Edgar pledges that there will be no more state employees in agencies under control of the governor at the end of his first term than there are the day he takes office. Needs for new prison guards will require cuts elsewhere in the budget, he says. Edgar identifies the most likely cuts as middle management positions and says he would protect direct-care workers. Edgar can put no number on positions to be eliminated or reassigned.

Hartigan comes up with a specific number of jobs to cut: 2,500. He believes that performance audits would identify 1,000 jobs to cut and another 1,500 would be eliminated through a 10 percent cut in general funds administrative costs. Hartigan claims that the cuts will be bureaucrats and will not affect direct services.

The elimination of the 2,500 jobs was part of a larger Hartigan proposal to save money. When he announced his plan on August 13, Hartigan described it as ". . . a program to cut $600 million in bureaucratic waste and mismanagement, a program to abolish 2,500 unnecessary jobs, a program to make sure that more of the money we're spending is going to services and people.'' Only about half of Hartigan's cuts are spending reductions. Included in his numbers are $100 million from improved debt collection, $87 million from broader taxes (closing loopholes he says) and $65 million from selling bonds to finance items now paid from current revenues.

Hartigan's plan will be a focal point of the campaign's final six weeks. The $573 million that Hartigan says he can save and the $450 million that he projects for natural revenue growth would give him more than $1 billion to spend. That allows Hartigan to come out for letting the temporary increase expire and returning income tax rates to their pre-surcharge levels and still pledge more money for schools.

The need for new money is important because Hartigan on one hand sees the need for more spending for human services and education. On the other hand he says "no" to extending the surcharge. Edgar, meanwhile, says "yes" to the surcharge but sees limited new spending.

If you had planned to cast your ballot in the governor's race based on deep philosophical beliefs, these interviews offer no conclusive guidance. The themes that the two candidates have reiterated offer some guidance, but not a lot. Only if you want to cast your vote solely on the candidates' stand on the income tax surcharge do you have a clear choice.

October 1990/Illinois Issues/11

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