"I WANT DON to move around this state, reopening those closed factories, putting the unemployed back to work."

As a young black growing up in a southside Chicago ghetto, Donald L. Duster did not in his wildest dream think that one day he would receive such a charge from the governor of Illinois. But that is precisely what Gov. James R. Thompson told Duster when he introduced him to the media after appointing him director of the Department of Business and Economic Development (BED) on February 2.

For the past several months Duster has traveled the state carrying out Thompson's commission. He has found out that reopening factories is no small problem — the process is slow. Duster has learned that the prevalent attitude is that the business climate in Illinois is not good, an opinion reflected in recent studies by business and industry groups. For example, the State Chamber of Commerce surveyed over 1,000 businessmen and women and found that 79 per cent thought the state had a "just fair" or "poor" business climate; the Illinois Manufacturers' Association (1MA) said in a February statement that Illinois has lost 207,000 manufacturing jobs since 1967; a report issued recently by BED based on interviews with 189 companies in the Chicago area revealed a distinctly negative attitude about the state's business climate, that Illinois is antibusiness. Duster says he wants to change that.

While attending Wendell Phillips High School in Chicago, he earned money clerking in a neighborhood shoe store; as a math major at the University of Illinois, he washed dishes in a fraternity and cleaned floors in a sorority; during summers he worked in a mail order house. Duster, 45, has spent the last 15 years with Commonwealth Edison. He comes to state government from an executive position in which he was responsible for equipment and material at two $1 billion nuclear generating stations now under construction. He also served as financial analyst for Corn-Ed's $350 million pension fund.

Among his initial announced goals as director of BED are formation of an Illinois Business and Labor Advisory Council to help improve the state's business climate and establishment of a "business hotline" to connect a business ombudsman in his office with businessmen with problems.

The following wide-ranging interview with Duster took place on March 30:

Q: You are taking over a department amid widespread reports of an unfavorable business climate in Illinois. What can be done to correct the situation?

A: I agree that the perception on the part of many people and many industries is one of an adverse economic business climate. But, I think that if you ask people to quantify that, you might get a difference of opinion as to what that really means. Some will point to the workmen's compensation changes, which increased substantially the premiums that businesses have to pay. But, beyond that, the feeling is that the state legislature is antibusiness in that legislators have put forth bills which, when enacted, penalize businesses by increasing the cost of doing business. So, to the extent that a businessman finds an increasing portion of his operating costs going to areas where he feels they are not going to get a sufficient return, then he feels that the added expense is to his detriment. In discussing these issues, businessmen seem to feel that recent legislation is not in the best interests of business. Individually, legislators would probably say this is not true. But if you do review some of the legislation that has been enacted, I think businessmen do have a valid point. Whatever is done to increase their operating costs is going to have an adverse effect on their ability to sell their products.

Q: The problem mentioned most in the surveys by the State Chamber and the IMA was the requirement to pay higher workmen's compensation benefits. Both organizations claim the legislature is prolabor. Will you try to get the legislature to make some changes?
A: The department would like the legislature and legislators to look at the possible repercussions of proposed legislation. It is my impression that in the past the probable negative impact of some legislation has not been adequately presented to legislators. Recently, the department took a position

June 1977 / Illinois Issues / 9

against the proposed "lifeline" utility rate structure. We did so not because the concept is not valid, or because we felt the residential customer who has limited funds should pay an excessive amount for utility bills. That would be like taking a position against motherhood. But we felt the solution of shifting the burden of payments to the business community might be worse, and we thought we ought to make our position known before the legislation was acted on. One of our major goals will be to present points of view about proposed legislation which will help the legislators in their decisionmaking process.

Q: You made that decision on lifeline legislation without first checking with your boss, Gov. Thompson. When he learned of it, he expressed surprise. Did you learn a political lesson the hard way that you should check first with the front office before making such hard decisions?
A: I had already learned that lesson. But I have also learned that when a decision ought to be made, you ought to do the best you can in determining if you should make it, how you should make it and when you should make it. We were talking about lifeline legislation within the department when we learned that we had to make a decision on the very day we were discussing it. It didn't seem practical at that time to formulate a position and then check with the governor before we walked across the street [to the General Assembly] and announced it. Given the situation and my understanding with the governor that department heads have the qualifications and the determination to run their departments effectively, I decided it was in the best interest of our department to take a position and then later inform the governor. And that is what we did.

Q: When you were with Commonwealth Edison, you made decisions on your own. Now you are suddenly thrust into a politically charged, bureaucratic arena. Do you intend to be your own man?
A: My understanding with the governor is that I will be my own man. He has not put any undue constraints on me. I think the lifeline legislation was clearly a case where it would have been good to have checked with him first, but given the situation, it was a decision that had to be made quickly. It's my firm belief that the governor wants his department heads to run their departments and not feel so insecure about their positions and operations that they have to check with the governor first. He wants his people to run their departments and not pass the buck.

Q: You told the State Chamber that BED would be the spokesman for the Illinois business community. If you are an advocate for business, doesn't that put you in a ticklish posture insofar as labor is concerned?
A: Not that I am aware of. I think one need not separate the two camps and say they are antagonists. If you are pro-business, it doesn't automatically mean you are anti-labor. The same thing applies the other way. The two do live together, and in many cases there is a harmonious relationship between the two. It doesn't have to be an adversary relationship, and that's the way I approach it. It's one of cooperation and not confrontation.

Q: Both the State Chamber and IMA think BED is too political. The Chamber, for example, recommends reorganizing your department on a bipartisan basis to "more adequately represent and serve the needs of business and to promote our state's many strengths." IMA recommends the department be "less political and more devoted to the interests and problems of Illinois." Is it your feeling the department could serve the state's economic interests better if it were taken out of politics and structured on a bipartisan basis?

It's Duster's job to keep business from leaving Illinois and to point out repercussions to business in pending legislation

A: I don't know that the department is involved in politics. My feeling is that the large base of people in the department are professionals. The industrial development people have taken special courses to allow them to be more proficient in showing industry what is available in the state of Illinois; the international trade people are professional; the tourism people look at their operation the same way. I think what you are really talking about is the leadership of the department. To the extent that you have a political process putting into office an administration with a particular political point of view I think that is going to have to stay the same if this department is going to be part of government. No matter how you structure this department, it's going to be part of an overall political process. What I think you'd hope is that you have enough professionalism so that the political part of the department is going to be less prominent than it would be if it were a complete political entity.

Q: You told the State Chamber, "We are facing a vicious cycle, one of self-feeding decline. Jobs, income, and retail sales start to fall off, so taxes go up for those remaining, and people and jobs flee the area." How can this cycle be broken?
A: We haven't come up with an answer to those problems. I do know that some states have the unique step of reducing taxes which they feel will stem the flow and increase jobs. The reduction in taxes, or the money that is not collected in taxes, will be offset by additional income. That is a middle-range approach to recover money that is lost right away. What tends to happen is that when revenue starts to fall, you find other ways. That happened in the city of Chicago with the imposition of a head tax. The businesses in Chicago are very deeply resentful of that head tax. Jobs were leaving Chicago and the city said, "This is a way to regain revenue, so we will impose a head tax on them." But again, that just drives industry out. So, I don't know the answer. We do have a number of people in the department who are interested in the problem, particularly the problem of taxation, and are looking at how the tax structure might be changed. We want to look at how tax incentives have been used in other states.

Q: Will you put as much emphasis on efforts to attract new industry to Illinois as on keeping existing business and industry to remain in the state?
A: The statistics that I have heard discussed indicate that some 80 per cent of the expansion of the work force comes from existing industry. It that is true, then obviously the emphasis ought to be on keeping industry within the state. But, there is no question that, n the figures are right, more time should be spent where you get the best returns.

10 / June 1977 / Illinois Issues

Q: What emphasis will you place on attracting tourists to Illinois? A: We will place heavy emphasis on attracting tourists. Tourism is a growing industry in the state, and in many other states it has grown to a very large proportion of their income. We are not going to have as much money in our budget for tourism as the tourism division would like. They wanted to have welcome centers at the entry points on the interstate system and to staff them and have information and brochures available. Well, we were not able to get that program funded at all in fiscal 1978, and that is going to hurt the operation of the tourism group. I feel that tourism is a growth industry, and it is one that we would like to participate in actively to increase the amount of dollars that comes in. Q: The Sun Belt states boast "cheap labor, tax incentives, state-paid training for new employees, and low energy costs" to drain industry away from Illinois and the Midwest. Can Illinois compete with the Sun Belt states? A: Illinois can compete, but we have to become more aware of the need to compete. For the past 10 or 15 years, the Great Lakes states in particular have been like the Big 10 used to be when you and I were at the University of Illinois. We didn't recognize competition outside the Big 10, and it wasn't until some of the smaller schools of the Big Eight or the Pacific Coast conferences started to beat the Big 10 teams that we said, "Well, there is competition outside the Big 10."I think the same thing is true for the Great Lakes states. For too many years we thought there was no other area for industry to go but the Great Lakes area. Recently, when industry started to move to the South, we finally decided we ought to do something about it. We are now in the process of trying to figure out what that "something" ought to be. What we have to do is not only sell the advantages of Illinois but, in many cases, try to get around, or at least change, some of the negative factors. Q: Let's end on a positive note. What's good about Illinois? A: The metropolitan areas — and we're talking about Chicago in particular — have a number of the advantages which have made it the hub of the Midwest. You have a highly skilled labor force which is plentiful; you have transportation facilities; you have all the cultural attractions; you have a well-run city administration. If you look at the other attributes of the state, you find we have a diverse economy, which makes it rather stable. We don't have a one-commodity state where, if that commodity is down, everybody is unemployed. We have a highly industrialized base in the northern part of the state, and we have an agricultural base in the balance of the state. Consequently, we have a fairly stable work force and economic environment. We have a state that is a leader in the export of farm goods — wheat and soybeans. We have the manufacturing plants for the world's largest farm equipment, Caterpillar, Deere, and International Harvester. If you look at the gross state product, I think you'll find we're one of the top three in the nation. 

'Lifeline': Reducing utility rates for residences and schools "LIFELINE" utility rate legislation, which would reduce utility rates to Illinois residential property owners but drive up costs for industry, passed the House Public Utilities Committee April 21 after almost three months of study, discussion and hearings. The measure would reduce the cost of electricity for the first 500 kilowatt hours used by most residences and for the first 1,200 kilowatt hours used for electrically heated homes and apartments. Rep. William Marovitz (D., Chicago), the bill's sponsor, agreed to a compromise amendment which cut in half the impact of the legislation on industry from $165 million to $82.5 million. The amendment also would cut in half the immediate reduction residential customers would receive due to "lifeline." Instead of an average 22 per cent reduction over the first 500 kilowatt hours, there would now be an 11 per cent reduction. An amendment proposed by Rep. John Sharp (D., East Alton) would have limited the reduction to public aid recipients and senior citizens eligible for "circuit-breaker" tax relief. Sharp's amendment was recommended by a subcommittee but was not approved in the committee. An amendment by Rep. Joe Lucco (D., Edwardsville), which exempted schools and nonprofit organizations from the higher rates, had earlier been approved. Opponents to the bill argue that the Plan will end up hurting the people it is designed to help by causing across-the-board price increases in virtually all commodities because of higher utility costs to industries and manufacturers. Orville Bergren, president of the Illinois Manufacturers Association, said, "This legislation, which would add about $250 million to the electric power costs of larger users, including industry, would have a damaging impact on the already sick business climate of Illinois." Rep. Penny Pullen (R., Park Ridge), a member of the Utilities Committee, said she was voting against the bill because it would erode the business climate in the state. The bill, which faces strong opposition from utility companies and business groups, now goes to the full House for consideration. Gov. James R. Thompson said he would not take a stand on "lifeline" until the issue was voted on by the Public Utilities Committee. Thompson had met earlier in April with about 45 representatives of senior citizens groups, consumer groups, public utilities and private industry. At that time he expressed suspicion about "any utility proposal that would shift the burden of costs from one class to another." Following the committee vote Marovitz conceded that "lifeline" is a "very difficult concept. It has taken us this long to educate the members of the committee. Now we have to educate the 177 members of the House." Even if it is defeated in the House, the committee's passage of "lifeline" marks the beginning for consumer rate reductions, Marovitz said. Two tax incentive bills for business were scheduled to be heard in the Senate Revenue Committee early in May. S.B. 736 and 737, sponsored by Sen. Robert Egan (D., Chicago), provide a sales tax exemption for production equipment used in manufacturing and revise the formula which now gives equal weight to property, payroll, and sales in apportioning the income of interstate business to Illinois. The proposed change would place 50 per cent of the weight on sales, which would shift more of the tax burden to companies located out of state. / M.C.G.

June 1977 / Illinois Issues / 11

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