Behind the numbers
Monday, Aug 4, 2008 - Posted by Rich Miller
* Kudos to Erickson for digging into the numbers…
An analysis of audit reports covering the last three Illinois governors shows that Gov. Rod Blagojevich’s administration has been plagued by substantially more reports of mismanagement and waste than his two predecessors.
A comparison of audits for 22 major state agencies dating to 1997 found Blagojevich has had nearly as many problems running state government as former governors George Ryan and Jim Edgar combined.
The survey looked at yearly audit findings for agencies that are under the governor’s control at similar points in each of their administrations.
For Blagojevich, the survey determined that auditors raised questions about the proper use of taxpayer dollars in 326 instances. Ryan’s administration had 137 findings in the second half of his one term, while auditors found 203 problems within agencies overseen by Edgar during the second half of his second term.
Analysts say the problems uncovered by Auditor General William Holland’s office may indicate how serious a governor is about managing the state’s resources.
That’s an understatement.
* Meanwhile, the SJ-R looks at the governor’s touted job creation numbers for his capital construction package, which the governor has claimed would create hundreds of thousands of jobs….
“There would be an increase of manhours in construction, no doubt,” Illinois Manufacturers’ Association President Greg Baise said. “I’m not buying that all of a sudden we’re going to have full employment.”
Baise opposes the current capital bill, which isn’t mentioned in the piece. But he did make a good point.
* Drill down further in the piece and you get this…
If a $35 billion capital plan would create 611,000 jobs, only about 254,000 of them would be direct jobs. Another 68,000 would be indirect. The remaining 289,000 would be induced.
* “Induced” jobs are those allegedly created by construction workers and company owners spending the money they make…
[Southern Illinois University economics professor Subhash Sharma] agreed that “induced” jobs are tied to people’s spending habits, which can change depending on the economy. Right now, for example, people are spending more on gasoline, less on other things. Others may be inclined to save money instead of spend it.
* And then there’s this…
The numbers also measure jobs created, not people working. A person could work on a road project in Peoria, move to Rockford when the Peoria job is completed and get a job in Rockford working on a new project. That is two jobs created by the capital plan, but only one person employed. [emphasis added]
That’s an important thing to note.
In other words, don’t be like so many editorial writers in this state. Take all the capital numbers with a grain of salt.
* Somewhat related…
* Unfiltered: Daley Talks About Guns, Blagojevich and Budget
* Governor wants to unite ethics bill, capital plan
* Tourists to learn budget cuts hurt
* Schoenburg: Description of fictional ‘Zombies’ sounds familiar
* Commission leaning toward not moving IDOT division
* Does the Illinois Lottery pay for education? Well, sort of
* Federal tax break hurts state
* Feds OK $9 million in flood aid
- Excessively rabid - Monday, Aug 4, 08 @ 9:58 am:
I’m surprised the numbers from the AG aren’t worse for the current guv. Maybe I wasn’t paying attention, but I don’t recall ever seeing findings reported that were as serious (outrageous IMHO) as we’ve seen the past couple of years. And it seems like there’s a new one every week.
- Dan S. a Voter and Cubs Fan - Monday, Aug 4, 08 @ 9:59 am:
Same old story with this administration. If this Governor were the CEO of a major corporation he would have been put on the street long ago. Shouldn’t an office holder who is supposed to be a “public servant” and “leader” be held even more accountable? As I have posted many times here, IMPEACH NOW!!!
- Commonsense in Illinois - Monday, Aug 4, 08 @ 10:15 am:
Did a bit of figuring…if the governor’s numbers are to be taken at face value, every current unemployed person in Illinois will have a job in the construction industry with enough jobs left over to give every man, woman and child a job for 90 percent of the population of Wyoming…
- VanillaMan - Monday, Aug 4, 08 @ 10:25 am:
When did these reports come out? In 2003-2005, we have a new political party with inexperienced arrogant amateurs floundering on our dime. This often happens, and it is important to realize that the reports are not necessarily due to corruption, but simple ineptitude.
After 2005, the reports can be possibly viewed as both continued ineptitude and possible corruption. Mismanagement should be seen as mismanagement and those unable to do their jobs should have been shown the door. By the beginning of the second term, these reports should be ebbing, since those with first term experience remain and those replaced haven’t had enough time to mismanage.
The Edgar and Ryan administrations had a base of expertise that Blagojevich lacked. This was due to their experience, their talent pool and their evolutionary nature. So it should be no surprise to find mismanagement reports rising when Blagojevich comes into office. He didn’t have staffers with experience in government.
What we normally see in government is experienced people make better administrations. That is the elemental reason why regardless of subjective political positions, McCain would be a better president than Obama. This is objectively uncontestable.
- Ghost - Monday, Aug 4, 08 @ 10:48 am:
ANother good point in the SJ-R story, there is nothing that says those created jobs will be filled by Illinois residents. For example, an Indiana construction company can put an office in Springfield (making them a State company for purposes of the procurement code) and bid on those jobs. Say they hypothetically get 4 jobs. Those 4 jobs they use the same workforce on, just shifting them around as each job is completed. Large scale construction happens in phases, and the type of workers used in each phase change so they can be rotated. Now that Indiana company is using Inidiana employees. A lot of construction workers, including my Uncle, travel across States to where the work is, bt are not residents.
So my above company created no new jobs for Illinois residents. It created work for a number of Indiana workers who would be in Illinois on a limited basis. They would spend some money here, but most of their paycheck goes back home to Indianna. Thus we ultimatley created direct, indirect, and induced jobs in Indiana!! but the people of the State of Illinois paid for it!
In short, they program creates hours, not jobs. Jobs are overestimated by not accounting for a single worker who would be moving from job site to job site. But the biggest problem, nothing prevents companies and workers from Indiana,MO, Iowa, Kentucky, MI and elsewhere from transiantly coming into the State for the work, spending minimial dollars here, and then heading home.
The number of jobs is not only way to high, but the assumption that the jobs will go to residents of IL is huge assumption that is not well supported. The reality is this porgram will create a fraction of new Jobs for Illinois residents. But they are funding it based on the taxpayers and citizens future potential income by sellinf off the lottery. The only one who gains is the Gov who collects campaign contribtuions or from the contractors, and political favors for releasing the funds.
Take the recent IDOT move to reward the Gov’s supporters. Now imagine IL where the Gov has 25 Billion to hand out, but only to those who support the Gov programs. Now suddenly all of the health care intitives and other big ideas that the State can not afford, will be shoved down the legislature with the promise of billions for their districts, or the threat of no funds if they do not support.
The 25 Billion capital plan, over which the Gov has complete control on the release of funds, just gives the Gov a giant political club to force through the Gov’s plans in exchange for billions in payoffs. That the republicans want to give the Gov billions to hold over their heads in exchange for their support on his projects is a stunninly short sighted agenda of self destruction.
There can be and should be no capital plan without real funding sources based on current money, no selling our future, a signed ethics bill baring the contractors or their families from making campaign contributions, and impeachment of the Gov or removal of his authority to withold funds or direct the spending of the plan.
We have none of that. Anyone who wants to hand this gov 25 Bill in clout control should be replaced in office.
The simplest solution, impeach the Gov. Then pass a capital plan.
- Vote Quimby! - Monday, Aug 4, 08 @ 10:51 am:
==The simplest solution, impeach the Gov. Then pass a capital plan==
Preaching to the choir, it sounds like here, but can we have Blago sign the ethics bill before we impeach him? And is our gov appearing at the State Fair this year?
- zatoichi - Monday, Aug 4, 08 @ 11:08 am:
If anyone has ever worked construction at any level you know the work hours and locations vary widely. Projects start and come to an end. You can have 6 months in one location, 3 days elsewhere, be off during the winter season, then work 1 year somewhere else. Most construction jobs are not 40 hours a week, 52 weeks a year, year after year. There are large jobs with consistent employment until the project is completed. There are behind the scene suppliers who are busy until their part of the project is complete. To assume the 600,000 new, additional jobs are fulltime, year round employment just does not work. Do those induced jobs remain after the money is spent or does the company who hired them let them go as soon as the direct/indirect workers stop bringing in a check? Great concept on paper or sound bite.
- Woa - Monday, Aug 4, 08 @ 12:25 pm:
Rich you removed the crony comment before I had the chance to ask whether “crony” is good or bad?
- Rich Miller - Monday, Aug 4, 08 @ 12:25 pm:
Woa, I didn’t remove anything. Must’ve been the spam blocker.
- Woa - Monday, Aug 4, 08 @ 12:29 pm:
My confusion. Sorry.
- Huh? - Monday, Aug 4, 08 @ 3:24 pm:
This started out as a letter to the editor, but it has been edited to remove the names of the guilty. It isn’t just the state claiming that new jobs are created with a capital bill.
What follows deals with the Federal Motor Fuel Tax and highway construction.
The Federal gas tax is 18.4 ¢ per gallon. Of that 18.4 cents, 15.44 ¢ goes into the Highway Trust Fund. The Highway Trust money is administered by the Federal Highway Authority (FHWA) and paid out to the states according to formulas set by Congress. The gas tax holiday will cost the FHWA about $10 billion in lost revenue. Of that $10 billion, $8.36 billion would have gone to the Highway Trust fund.
The FHWA pays 80% of the eligible costs of a project. The States or local agencies must make up the 20 percent plus any other costs. The $8.36 billion from the FHWA becomes $10.45 billion for highway infrastructure rehabilitation. The $10.45 billion dollars could pay for up to 45,000 miles of roads to be resurfaced with 2” of asphalt. Depending on the size of the bridge being replaced, the $10.45 billion could pay for more than 600 major bridges replaced.
The FHWA says that for every $1 billion spent on highway construction, 42,000 direct and indirect jobs are created. In addition to the increased employment, the FHWA says that every dollar invested in the highway system yields $5.60 in economic benefits.
A proposal to “save” the American tax payers $10 billion will result in the loss of nearly 439,000 jobs and $58.5 billion from the economy. It will postpone needed repairs to our roads and bridges. The negative effects of this proposal will be felt for years. It is money that is urgently needed and will never be recovered.
Our system of local streets and highways are the backbone of the American economy. There isn’t an item made that does not go over the road at some point between manufacture and sale. It is likely that there isn’t a person in this country that hasn’t used some type of public road. The American highway system is critical to the economy and life styles of this nation.