To ensure integrity within any public-private partnership created in Illinois and that all ethical and transparency requirements are met, Speaker of the House Michael J. Madigan on Wednesday announced the creation of a bipartisan special House committee to review Gov. Bruce Rauner’s plan to establish a private company that will work with the Illinois Department of Commerce and Economic Opportunity to dole out state money and tax breaks to corporations.
“The formation of a public-private partnership could produce lasting benefits, but our obligation to taxpayers includes working to ensure transparency and integrity within the program,” Madigan said. “I support efforts to boost Illinois’ economy and create more good-paying jobs for middle-class and struggling families. That’s who should benefit from a public-private partnership, and the tax dollars given to any corporation should be spent wisely and with the proper oversight.”
Earlier this month, Rauner announced a plan to create a privately run economic development corporation that would partner with the state Department of Commerce and Economic Opportunity. While Rauner said the corporation would be funded with private donations, taxpayer dollars would still be at stake and DCEO would be required to approve any incentives or deals offered to companies.
Last spring, Madigan worked cooperatively with Rauner on the governor’s request to create a public-private partnership in Illinois. However, the measure failed to advance beyond passage in the House due to the governor’s opposition to Madigan’s belief that the partnership should be reviewed after three years to ensure tax dollars are spent wisely and to determine if it is functioning as intended.
Similar public-private efforts in other states have experienced problems in recent years. The Wisconsin Economic Development Corp., for example, was criticized in an audit for, among other things, not requiring financial statements from companies receiving incentives, granting awards to ineligible businesses, failing to ensure jobs had been created by companies after awarding them with nearly $1 million in tax credits, and in some cases hiring firms with conflicts of interest. In Virginia, it was reported that a public-private infrastructure project, due to a lack of transparency, led to massive cost overruns and ultimately the state halted the project, but not before taxpayers had paid the contractor $290 million for the unfinished project.
The private corporation, as proposed by the governor, would not be subject to the requirements of the Freedom of Information Act, as confirmed by DCEO director Jim Schultz. Madigan said that must change to permit greater transparency of how taxpayer dollars are being expended.
“Given what has happened in other states due to the lack of transparency and proper oversight, my belief today is the same as it was last year, and that is that a public-private partnership can be achieved, but with the proper safeguards and transparency in place,” Madigan said. “Illinois is facing unprecedented fiscal challenges, so taxpayer dollars must be used wisely and efficiently. Simply authorizing a public-private partnership without taking into consideration the controversy that has occurred in other states is not in taxpayers’ best interests.”
State Rep. Lou Lang, D-Skokie, will chair the Special Committee on Public Private Partnerships, and House Democratic members will include Reps. Chris Welch of Hillside, Will Davis of Homewood, Carol Sente of Vernon Hills, Fred Crespo of Hoffman Estates, and John Bradley of Marion. House Republicans are expected to name members to the committee.
- Oswego Willy - Wednesday, Feb 24, 16 @ 9:39 am:
Wonder if “@LTrover” will Troll Rep. Lang during these hearings? You know, tweetin’, mockin’, callin’ out those testifyin’…
I am pleading @RonSandack gets on the committee. Lots of “who” questions… “Who is trying to make Gov. Rauner look bad? Who?”. Maybe Rep. Sandack can live-tweet himself big paying attention?
This sounds fun.
- Oswego Willy - Wednesday, Feb 24, 16 @ 9:40 am:
Maybe Rep. Sandack can live-tweet instead of paying attention?
- ILPundit - Wednesday, Feb 24, 16 @ 9:43 am:
This would be step one in the House toward voting to block Governor’s DCEO executive order
- out of touch - Wednesday, Feb 24, 16 @ 9:44 am:
—Maybe Rep. Sandack can live-tweet instead of paying attention?—
For his sake, hopefully Sandack does his live tweets in front of a mirror; it’s the only way of guaranteeing that someone watching cares.
- DuPage - Wednesday, Feb 24, 16 @ 9:45 am:
A private company authorized to give away public money. What could possibly go wrong?
- Anon221 - Wednesday, Feb 24, 16 @ 9:46 am:
What the Speaker is proposing with the need for Oversight and Transparency, as well as the Review (it is NOT a sunset), is totally reasonable. Rauner will retort that these are PRIVATE dollars, thus no need for OTR. IMO, if Rauner and his PRIVATE investors can’t or won’t tolerate OTR, then go it alone and become the saviors of Illinois by forming their own PRIVATE firm to attract businesses to Illinois. There’s got to be SOME incentive for these PRIVATE investors to want to be tied to a state agency. My question is, what is/are that/those incentive(s)???
- wordslinger - Wednesday, Feb 24, 16 @ 9:48 am:
If there are any tax dollars in play, the normal oversight and transparency safeguards need to be in place.
This kind of stuff is a sideshow, anyway, just expensive p.r. machines for governors and mayors. Corporations make their decisions where they want to be, then cash in with eager politicians who want to be viewed as “job creators.”
Why would anyway believe that state government can be some top-down development force in a global economy when it can’t even perform its basic Constitutional function of instituting a coherent budget for core responsibilities?
- Oswego Willy - Wednesday, Feb 24, 16 @ 9:48 am:
“The next witness is Richard Goldberg, Office of the Governor… ”
That will be “must see”.
“Chairman Lang, that question is outside the purview of this sham hearing.” … @LTrover tweetin, “Oh snap! How do you like that Rep. Lang?”… @RonSanack tweets something like “Goldberg knows who is to blame for this sham hearing”…
Just SuperStars on parade. Fun, fun, fun.
- Gumby - Wednesday, Feb 24, 16 @ 9:50 am:
Well played Mr. Speaker.
- illini97 - Wednesday, Feb 24, 16 @ 9:51 am:
Would it be more efficient to modify the FOIA statute to include public-private partnerships that have the authority to disburse public funds?
- Cassandra - Wednesday, Feb 24, 16 @ 9:52 am:
Whatever.
I would point out to Mr. M., however, that middle class families are struggling in present-day America, including, yes, Illinois. It’s not middle class and struggling, it’s struggling middle class.
In their desire to send the middle class a disproportionate share of the bill for the their past fiscal mismanagement, our Illnois pols would prefer not to highlight that aspect of today’s economy. Nor the fact that today’s wealthy live on another socioeconomic planet entirely. And moving upwards as the tax burden becomes less and less proportionate.
- Ahoy! - Wednesday, Feb 24, 16 @ 9:53 am:
The problem is that Madigan and Illinois Democrats don’t know anything about economic development or private sector job creation. They only jobs they know how to create is political and at the expense of taxpayers.
- illini97 - Wednesday, Feb 24, 16 @ 9:56 am:
Cassandra, Ahoy!
What do your statements have to do with the call for transparency in a proposed public-private partner organization?
- Jack Stephens - Wednesday, Feb 24, 16 @ 10:00 am:
@ahoy:
Neither does Bruce. He sells companies off for cents on the dollar. Not much economic development or job creation there.
- walker - Wednesday, Feb 24, 16 @ 10:01 am:
Crespo and Sente made their careers in large and small businesses respectively, before running for public office.
Just FYI Ahoy, in the legislature anyway, there are real business people on both sides of the aisle.
- Anonymous - Wednesday, Feb 24, 16 @ 10:04 am:
–The problem is that Madigan and Illinois Democrats don’t know anything about economic development or private sector job creation.–
It’s done by government agencies controlled by governors and mayors, centralized command economies?
- Nick Name - Wednesday, Feb 24, 16 @ 10:04 am:
“House Republicans are expected to name members to the committee.”
Will the Rauner-controlled GOP caucus permit any Republicans to serve on the committee?
- Chucktownian - Wednesday, Feb 24, 16 @ 10:08 am:
All the other states who have tried these things have paid like hundreds of thousands of dollars per job or worse. They’re a waste of time and resources.
Here’s an idea: Having a budget and appropriations for state universities will create jobs. It will immediately create 177 jobs here that will otherwise disappear on March 11th.
I’ll bet that is more jobs than this thing Rauner has created will ever create. The corporate welfare approach never works. It’s another faith-based policy initiative that is always trotted out despite reams of evidence to the contrary on effectiveness.
- StateWorker - Wednesday, Feb 24, 16 @ 10:10 am:
If no one is trying to hide anything than why should this be a big deal? Personally, I think it is a great idea, and I thought the Governor was pro-transparency all through his campaign? hmmmm
- cdog - Wednesday, Feb 24, 16 @ 10:16 am:
It is very entertaining and ironic that The Democrat is schooling The Republican on basic components found in the national GOP Republican Platform –
TRANSPARENCY AND ACCOUNTABILITY.
To deny access to FOIA protections and completely disregard the need for governmental transparency and accountability is just more “jiggery-pokery” from this Administration.
- walker - Wednesday, Feb 24, 16 @ 10:16 am:
The most common complaint in states that do this kind of thing has been lack of transparency, and fears that public money is wasted that wouldn’t be otherwise. But the private companies involved also put resources into the effort. In Indiana they do help in attracting big employers, along with other factors.
On this one let’s give Rauner some rein. This is one area where business experience is applicable in government.
- VanillaMan - Wednesday, Feb 24, 16 @ 10:17 am:
We demand that government account for every dollar. We need to demand the same if we start depending upon corporations to use our dollars as well.
There is a believe that outsourcing government services can be a profitable business. Rauner is big on this. Yet, there is a difference between serving a base of paying customers, and serving a universe of citizens. Most profits do not come from proving services to non-paying customers.
We are seeing many unstable and unscrupulous business operations lunging at the chance to guzzle at our public trough. They don’t have the resources to do the jobs demanded, yet they hop through all the hurtles to secure those contracts.
We have seen government services hobbled and ruined this way. Anyone thinking that government services to citizens can be an undependable process, fails to understand the responsibilities. There are reasons we demand our government to undertake these tasks.
We regulate our utilities so that they do not unfairly profit from our needs, yet we do ensure that they receive a profit.
This isn’t just about politics. It is about allowing corporation to feast at our tax base and make a profit doing it. Expect scandals, disasters and controversies, because doing this isn’t really new at all. This is a return to an old way of doing things, actually. It failed and that is why we have governments doing those things. Expecting a different result today is not thinking this out completely.
It will fail again.
- Liberty - Wednesday, Feb 24, 16 @ 10:17 am:
- Ahoy! - Wednesday, Feb 24, 16 @ 9:53 am:
The problem is that Madigan and Illinois Democrats don’t know anything about economic development or private sector job creation.–
Apparently neither do the Republicans or Rauner…
- Enviro - Wednesday, Feb 24, 16 @ 10:18 am:
“The private corporation, as proposed by the governor, would not be subject to the requirements of the Freedom of Information Act,”
This provision is more than a little suspicious.
- Very fed up - Wednesday, Feb 24, 16 @ 10:18 am:
Thank goodness Madigan who is well known for his unmatched ethics and transparency is coming to the rescue to look over things
- Cassandra - Wednesday, Feb 24, 16 @ 10:28 am:
Ahoy-
Because in so many ways our political masters let slip their delusional views of the American economy, the one which has a middle class which just needs a little boost to get over the recession and, by the way, we need to charge you more for the really bad governance we’ve been providing for the last couple of decades.
- Anonymous - Wednesday, Feb 24, 16 @ 10:28 am:
“Who” says the house will not obstruct the executive branch any way they can?
DC politics are settling into Springfield.
- Annonin' - Wednesday, Feb 24, 16 @ 10:32 am:
The funniest part about all this is that the $uper$tars whined in May that their little clubhouse did not need to see the sunset and then did NOTHING for 8 months. Let’s have a new QOTD which looks more Blagoofian the P3 scam or the “forgivin’” the interfund borrowin’?
- JS Mill - Wednesday, Feb 24, 16 @ 10:32 am:
=Why would anyway believe that state government can be some top-down development force in a global economy when it can’t even perform its basic Constitutional function of instituting a coherent budget for core responsibilities? =
Best summary yet.
Government can make it harder or easier but that is about it.
Illinois- seems to be making it harder, especially by not paying their vendors.
- WK - Wednesday, Feb 24, 16 @ 10:38 am:
On the surface, I do not think this a totally unreasonable request. Rauner says he wants transparency, I think this is one area where both him and Madigan can find some common ground without trying to just screw each other over and squash an idea just because they can. I think they could probably overcome the FOIA issue as long as they outline what information can and should be publicly available. I know if I owned a private company, I would be hesitant to participate in a program if it meant all of my financial information was subject to FOIA rather than just specific items that apply to the funds received.
- My New Handle - Wednesday, Feb 24, 16 @ 10:38 am:
IMO, Madigan is right about having legislative oversight for all such partnerships and the statutes should be changed to make them subject to FOIA, absolutely.
- Mama - Wednesday, Feb 24, 16 @ 10:48 am:
“Madigan’s belief that the partnership should be reviewed after three years to ensure tax dollars are spent wisely and to determine if it is functioning as intended.”
I’m with Madigan for the reasons stated above.
- Mama - Wednesday, Feb 24, 16 @ 10:52 am:
==Anon221 @ 9:46AM - There’s got to be SOME incentive for these PRIVATE investors to want to be tied to a state agency. My question is, what is/are that/those incentive(s)??? ==
$$$$
- Anon - Wednesday, Feb 24, 16 @ 10:54 am:
Practicing local economic developer here, again.
Every few years, Development Counsellors International, a global ED strategy firm, does a periodic survey of several hundred corporate execs and site selectors. One of the questions DCI’s survey asks these decision makers is “Which states have the best-performing ED organizations?”
The most recent results were:
1. Georgia
2. Louisiana & Texas (tie)
3. South Carolina
4. Michigan
5. Kansas, Missouri, Oklahoma (tie)
6. Florida, Utah, Virginia (tie)
7. Indiana
Of these top performers, I know for a fact that Georgia, Louisiana, Michigan, Missouri, Florida, Utah, Virginia & Indiana are all structured as PPPs. I suspect that South Carolina is as well.
PPPs are seen be the very people who are out there deciding where to locate new projects as the most effective types of organizations to work with.
So while our wonderful state legislators hand- wring over secondary issues like transparency, executive compensation levels, FOIA and whatnot, the bottom line is that those states using PPPs are out there getting the job done and winning deals.
You don’t measure the effectiveness of your economic development program based on its transparency. You don’t measure it based on how reasonable employee compensation is within that organization. You don’t measure your economic development organization based on how well they respond to FOIA requests. These are not outcomes in themselves.
Economic development is measured by jobs and new capital investment…period.
- Mama - Wednesday, Feb 24, 16 @ 11:04 am:
=== Chucktownian - Wednesday, Feb 24, 16 @ 10:08 am: “All the other states who have tried these things have paid like hundreds of thousands of dollars per job or worse. They’re a waste of time and resources.”==
Does Rauner & his SuperStars not know that this has been tried in other states, and it did not work well for those states? Something smells fishy…
- My New Handle - Wednesday, Feb 24, 16 @ 11:06 am:
Transparency and accountability are not “secondary issues,” in my opinion. And what kind of jobs are we talking about? High wage? Low wage? What kind of revenue do these jobs generate throughout their states and communities? Jobs and caputal investment seem like pretty thin criteria for real sustainable growth.
- Enviro - Wednesday, Feb 24, 16 @ 11:12 am:
Anon @ 10:54 am:
Did you miss this art of the press release?
This is why we need transparency.
“In Virginia, it was reported that a public-private infrastructure project, due to a lack of transparency, led to massive cost overruns and ultimately the state halted the project, but not before taxpayers had paid the contractor $290 million for the unfinished project.”
- Enviro - Wednesday, Feb 24, 16 @ 11:16 am:
Anon, Here is more required reading for those who question the need for transparency with a PPP:
From the press release:
“The Wisconsin Economic Development Corp., for example, was criticized in an audit for, among other things, not requiring financial statements from companies receiving incentives, granting awards to ineligible businesses, failing to ensure jobs had been created by companies after awarding them with nearly $1 million in tax credits, and in some cases hiring firms with conflicts of interest.”
- Blue dog dem - Wednesday, Feb 24, 16 @ 11:42 am:
Can anyone say”cronie capitalism”? Why doesn’t the brilliant RAUN Man insist on developing a tax strategy for all companies doing business in illinois? Wouldn’t that be the FAIR thing to do? Since when does government get to pick favorites? My company pays lots of taxes, many forms, why should I pay taxes to support schools, roads, police,fire, social programs, and some freeloader get off ? This is why I consider the RAUN Man nothing but a hypocrite.
- Mason born - Wednesday, Feb 24, 16 @ 11:43 am:
Rich
Don’t you know making a Rauner backed candidate walk 2 blocks is worse than forcing Lutheran Social Services, Catholic Charities, CSU, EIU, and other higher ed to go broke. Man you have lost your humanity! !!!!!
- Mason born - Wednesday, Feb 24, 16 @ 11:45 am:
Sorry wrong thread.
- TinyDancer(FKA Sue) - Wednesday, Feb 24, 16 @ 11:53 am:
The Brits have already figured out this scam:
https://www.youtube.com/watch?v=V0kkHaFVRRM
and
https://www.youtube.com/watch?v=T6An73hg_E0
- Markus57 - Wednesday, Feb 24, 16 @ 12:01 pm:
Anon @ 10:54 am:
“Economic development is measured by jobs and new capital investment…period.”
A proliferation of Minimum Wage jobs without benefits does not constitute “Economic Development”.
Substantial additions to Gross State Product compared to ED program costs and lost state & local tax revenue from incentives offered measured over the life of the incentives may constitute economic development. A detailed cost benefit analysis is rarely conducted either prospectively and retrospectively. The depth of analysis for most deals is limited to details in the press release. Hardly a rigorous or objective process.
- hakuna matata - Wednesday, Feb 24, 16 @ 12:11 pm:
You know what else matters with economic development and helps recruit businesses/entrepreneurs.. community development, workforce development and training programs, a healthy and educated workforce.. things that Rauner has spent the last year destroying. Given his actions on destroying everything, I can only guess his version of Econ Dev freedom consists of giving special perks to his friends.
- Skeptic - Wednesday, Feb 24, 16 @ 12:16 pm:
Correct me if I’m wrong, but wasn’t one of the knock-out blows against Quinn a $5M program he put together that distributed money without the proper transparency and accountability?
- illini97 - Wednesday, Feb 24, 16 @ 12:47 pm:
Anon/Practicing Local Econ Developer
Can you explain why issues like transparency are secondary and why the concept of “winning deals” and transparency are mutually exclusive?
- walker - Wednesday, Feb 24, 16 @ 1:03 pm:
Poindexters arise!
/s
- Juvenal - Wednesday, Feb 24, 16 @ 1:27 pm:
=== Anon/Practicing Local Econ Developer
Can you explain why issues like transparency are secondary and why the concept of “winning deals” and transparency are mutually exclusive? ====
The survey he points to is how businesses rank economic development offices.
But what businesses want - namely lots of money with not a lot of strings attached - is in direct conflict with the best interests of the taxpayers.
To many businesses, the transparency and accountability Democrats are pushing for are not just “secondary issues” as Anon suggests, they are an anathema.
- Anonymous - Wednesday, Feb 24, 16 @ 2:00 pm:
“A proliferation of Minimum Wage jobs without benefits does not constitute “Economic Development”. Substantial additions to Gross State Product compared to ED program costs and lost state & local tax revenue from incentives offered measured over the life of the incentives may constitute economic development. A detailed cost benefit analysis is rarely conducted either prospectively and retrospectively. The depth of analysis for most deals is limited to details in the press release. Hardly a rigorous or objective process. ”
—
Tell you what - go to a place like Danville or Kankakee and stand in front of a community meeting full of unemployed factory workers angry that they can’t find jobs. You are the local economic developer and are responsible for job growth in the community. Go ahead and recite that little spiel you wrote above and see how well it goes over with the crowd.
- Markus57 - Wednesday, Feb 24, 16 @ 4:34 pm:
earlier comment never posted for anonymous @ 2:00 pm so here’s trying again.
I’m just suggesting setting the economic development bar a little higher than creating a community of working poor with wages below the federal poverty level. Especially now in a State that is decimating the social service networks that could provide a backstop for a desperate “jobs at any cost” strategy until a real economic development plan is in place that would provide a standard of living those unemployed workers enjoyed before their employers left town.
- Chucktownian - Wednesday, Feb 24, 16 @ 5:04 pm:
Yep another faith-based initiative. These GOP types prattle on and on about welfare and efficiency but their corporate welfare policies are much more expensive and don’t even really create jobs.
My understanding in Wisconsin is that they couldn’t even account for millions of bucks and show any jobs were created. And Scotty Walker is Rauner’s hero and model!