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* The setup…
Illinois Attorney General Lisa Madigan’s office says it raised nearly $1 billion in state revenue last year through a variety of litigation and the collection of estate-tax revenues.
Madigan’s office says in a statement that of more than $922 million generated for the state, $236 million came from collecting estate-tax revenues. Tobacco litigation raised another $284 million. […]
While it raised nearly $1 billion, Madigan’s office notes that it operated with an appropriation of around $30 million. It says that was the lowest level of funding from the state’s general revenue fund since 1997.
* The Question: Should state law be changed to give the Illinois attorney general’s office a set percentage of the settlements and lawsuits it wins for Illinois? Explain.
posted by Rich Miller
Friday, Feb 18, 11 @ 10:41 am
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No. The revenue generated should revert to GRF unless it’s designated by court order for another purpose. The AG should not need any extra incentive to go after money owed to the state. That is one of its reasons for existance.
On the other hand, if the AG can make a compelling case that, by giving it additional resources, it can generate additional dollars, that would be appropriate.
What good does it do taxpayers if a percentage of the new money just goes for more government? Again, if they need more resources to collect more money, fine. But they shouldn’t be given a percentage bounty for doing their jobs.
Comment by 47th Ward Friday, Feb 18, 11 @ 10:47 am
Absolutely not. That is an invitation for the AG to pursue questionable claims, and even legitimate claims with a potentially unlawful or unethical amount of over-zealousness. Bad public policy. If there isnt a law already banning this, there ought to be one.
Comment by Mannix Friday, Feb 18, 11 @ 10:49 am
No, and my reason is that it could give an impression of impropriety. If they need more money it should be through appropriations, not by levying fines.
No more than I support local PD jurisdictions in rural counties setting up speed traps for the sole purpose of paying for new equipment/manpower.
I understand the request, but don’t feel that it would be a good idea.
Comment by How Ironic Friday, Feb 18, 11 @ 10:49 am
No - AG is government agency , not a PI firm. Start operating on a contingency basis and the tort reform kooks will be on their case and the integrity of the office questioned .
However, you would think the legislature would take results into consideration when funding. The AG’s office needs adequate money to operate at a highly successful level.
Comment by x ace Friday, Feb 18, 11 @ 10:49 am
No. It creates an incentive to pursue claims that they otherwise might not have. I have no problem bumping up the office’s funding though. It makes you think, if $30 million turned into $922 million, what would they bring in with a $50 million budget?
Comment by Obamarama Friday, Feb 18, 11 @ 10:51 am
I would lean against it, for the simple reason that it would essentially write into law an incentive for the AG’s office to perhaps unintentionally reach settlements at lower figures than they otherwise would. It might create situations where the office consciously or unconsciously settles early and collects their share for the office budget, rather than holding out and ultimately collecting more for the state’s general revenues if it did not have a percentage stake in the outcome. Not saying this would happen but the possibility would be there.
Comment by Ron Burgundy Friday, Feb 18, 11 @ 10:52 am
No, unless the AG is also willing to accept responsibility for the millions paid to Menard correctional center workers comp in settlements presented to the workers comp arbitrator for final approval.
Comment by Louis G. Atsaves Friday, Feb 18, 11 @ 10:53 am
No. You could have a scenario where the AG holds out for more money to settle a case solely to line its own pocket, and then the other side goes to trial and wins. The taxpayers of Illinois lose. It’s a conflict of interest.
Comment by 47th Ward GOP Guy Friday, Feb 18, 11 @ 10:54 am
The receipts of each agnecy generally go to the General Fund.
The old time practice of “fee offices” gave such horribly corrupt results that the practice was banned. It is likely unwise to go back to that old mistake.
Comment by titan Friday, Feb 18, 11 @ 10:54 am
I don’t like the incentive it creates for abuse. I would rather see appropriators use better sense in funding offices that produce revenue. Oh, look! A flying pig!
Comment by Excessively Rabid Friday, Feb 18, 11 @ 10:59 am
No. The job of the Attorney General is to represent the government, the people of Illinois, without passion or prejudice. While defending the Illinois and US Constitution, making money should not be the overall goal.
However, if they frame the argument in efficiency standards by saying with more resources the office can deal with claims more effectively and in the end cost the taxpayers less money, I think that carries more water.
Comment by Wrigleytown Friday, Feb 18, 11 @ 10:59 am
Sure if we take away any they lose. The assistants could work for the profits. Lose allot of cases you don’t get paid.
Comment by Bob Friday, Feb 18, 11 @ 11:05 am
Against it. In a state where there is not a history of prosecutorial abuse and mystery slush funds–maybe. But not in Illinois.
Comment by Responsa Friday, Feb 18, 11 @ 11:05 am
No. The AG’s office should be about enforcing the state’s laws, and determining the constitutionality of those laws. The department’s operating budget should not be dependent on the financial awards granted in court. IMHO, we shouldn’t even look at the revenue “generated” by the office. That’s not it’s job.
Comment by TimB Friday, Feb 18, 11 @ 11:12 am
I will be the contrarian and say yes under this premise:
The AG Office gets 5% of any award, unless it is greater than the budgeted expenditures for the AG to runs its own office, then the lesser of the amounts is awarded.
Upon award, the AG’s Office must use the monies in the operation of the Office and monies from the GRF allocated to run the Office will be returned to the GRF.
At a time that ALL awards supercede the operating budget of the Office for a fiscal year, all new awards won by the AG’s Office would then go to a new fund, for the next fiscal year to operate the AG’s Office, under the supervision of the AG, Comptroller and Treasurer as a saftey to ensure those monies are used exclusively to run the AG’s Office next fiscal year.
Like a 2nd checking account, used to self-fund the AG’s Office, and that fund can not grow larger than twice the size of the AG budget as it had been proposed for the last 3 fiscal years.
Once the special fund reaches twice the budgetary amount, ALL money won dunring the rest of that fiscal year would THEN go to the GRF.
Imagine a sitting AG “I have yet to use GRF to fund the operations of my office, and I have a 2 years of Operating Funds saved for the taxpayers, as we continue to fight for the citizens of Illinois.”
Just a spitball thought.
Fund the fiscal year.
2nd account up to 2 fiscal years of Operating Expenses.
The rest to GRF if more is won within one fiscal year …
Comment by Oswego Willy Friday, Feb 18, 11 @ 11:16 am
No, I don’t think the attorney general should operate like a personal injury lawyer. The office represents the state, the money goes in the GRF.
Comment by wordslinger Friday, Feb 18, 11 @ 11:25 am
I agree with the majority here. No, if the AG can make a legitimate case and show a results based need for more money then let it be appropriated through proper channels. While I believe the present AG would be fair and honest if she were allowed to do this, you always have to consider the worst case scenerio for who might occupy that office in the future.
And I see many police departments passing on covering non revenue generated areas of their jurisdictions in favor of heavy patrols in areas that might pay off. I wouldn’t want to see that in this office.
Comment by Irish Friday, Feb 18, 11 @ 11:34 am
No. they are the attorneys for the state and state employees. it works differently in government. the salaries are set. there are no bonuses and there are no hours billed. now if you want to discuss giving a percentage of the win to the attorneys…..
Comment by amalia Friday, Feb 18, 11 @ 11:36 am
Yes, provided the entire AG budget comes from these settlements and is capped at a set amount (in total, not per case).
Comment by Knome Sane Friday, Feb 18, 11 @ 11:40 am
Not until a percentage of the Medicaid match money generated through billings by community human service providers is returned to them and not simply dumped into GRF.
Comment by zatoichi Friday, Feb 18, 11 @ 11:43 am
When I was McHenry County Treasurer from 1966-70, our office collected inheritance taxes. We didn’t get a cut…or a stipend.
Anyone know if those silly stipends for county officials have been zeroed out in Quinn’s budget?
Comment by Cal Skinner Friday, Feb 18, 11 @ 11:51 am
No, for two reasons:
1. As stated by many other commenters, the arrangement could lead to actual abuse or, at the very least, perceived abuse.
2. There is a separation-of-powers issue here. The General Assembly holds the purse strings; this is one of the few checks the legislature has on executive power. If the Attorney General can both engage in executive policymaking and fund its own operations, we have lost an important check on executive power.
Comment by Let Freedom Ring Friday, Feb 18, 11 @ 12:18 pm
Yes, with specific details to be worked out.
I will acknowledge many issues that have been raised by the nearly uniform responses above mine as being real issues.
That said, completely divorcing performance incentives and performance “deterrents” creates a system with somewhat perverse results. It just does. I am not saying that as some pie-in-the-sky economic philosophy theory, I am saying it from experience.
I am not saying that “profit centers” of government (the obvious one being DOR, but many others) should be somehow held up in greater esteem than “profit drains” (DHS, myriad of others). Obviously DOR is going to “make” money and DHS is going to “spend” money.
But believe me, the government is desperately in need of some way give incentives to stellar work and deter poor work.
There are opportunities for abuses in any system, sure, and over-aggressive pursuit of all of our interests (the AG is the People’s lawyer, remember) due to incentives could be abused.
However, the system we are in encourages the opposite - the lackadaiscal pursuit of our interests b/c there is no reward for a good job and no punishment for a bad job.
Flip sides of the coin, but I’ll go on a limb and say “Yes”.
Comment by Peter Snarker Friday, Feb 18, 11 @ 12:22 pm
Absolutely not.
Comment by Anonymous Friday, Feb 18, 11 @ 12:27 pm
No. It’s why they are there. It’s their job. They shouldn’t be rewarded for doing their job, any more than any other agency, or any less. It’s expected of them.
If they need more assistance or a bigger budget to go after what is due us, they should prove the need and get in line.
Comment by Justice Friday, Feb 18, 11 @ 12:29 pm
No. Why should they be rewarded extra for doing what they should be doing?
Comment by 3rd Generation Chicago Native Friday, Feb 18, 11 @ 12:30 pm
I guess what I am saying is set up incentive targets to hit for the different agencies appropriate to the agency.
For AG, perhaps revenues brought in is appropriate, perhaps it is part of the picture that is appropriate, perhaps it is a different metric.
For DCEO - maybe the metric is “jobs created”, or some increase in funding for every .1 our Illinios unemployment rate is below our bordering states. Take X dollars away for it going the other way (ie., worse than our neighboring states).
My point isnt so much that the AG should be collecting on winnings - although that seems like part of the picture - it is that ALL agencies could have defined performance metrics going into a year that would help define their following year budget.
Never going to happen, never never never never. Did I say never?
The whole environment is just not set up that way, let’s face it, on any level.
Comment by Peter Snarker Friday, Feb 18, 11 @ 12:32 pm
Absolutely not.
Comment by Left Leaner Friday, Feb 18, 11 @ 12:35 pm
Peter Snarker: You are absolutely correct that we ought to align incentives and demand more from our government. This is an issue of legislative oversight. The legislature ought to consider performance in budgeting and conduct hearings regarding agency performance. The answer is additional oversight; not abrogating the power of the purse to the executive branch.
Comment by Let Freedom Ring Friday, Feb 18, 11 @ 12:39 pm
No, this is silly. The AG’s actions are just the tail end of a process that leads to the award. Most of the awards the AG collects are a result of (i) the legislature creating a program or creating a law, (ii) an agency implementing the law, (iii) an entity violating the law or running afoul of the program, (iv) an agency bringing the matter to the attention of the AG, (v) the AG “cherry-picking” the cases it chooses to pursue, (vi) the AG’s office and the agency developing the information for the case (work mostly pushed onto agency), (vii) a portion of the cases leading to a successful award. For the AG’s office to then claim that it “earned” this money for the state is ridiculous. They are necessary, but not sufficient.
Comment by Anonymous Friday, Feb 18, 11 @ 12:40 pm
No. Just like a District Attorney or public prosecutor, the AG represents all the people, including those on the other side of the court room.
Comment by cermak_rd Friday, Feb 18, 11 @ 12:48 pm
With all due respect, they didn’t have a whole lot to do with estate taxes. People die (and I don’t think the AG wants to be held responsible for that) and estate taxes are paid. It’s generaly a simple process.
I also do not support the AG providing hiring law firms on contingency basis to litigate cases.
Comment by 4 percent Friday, Feb 18, 11 @ 12:49 pm
The AG’s office has operated under ridiculous budget contraints for years. Imagine how much they would be able to generate if they could actually hire the appropriate number of lawyers?
Instead of giving them a percentage of what they collect, we should terminate all of the ridiculous legal contracts the Governor and other constitutionals hire and attorney positions in each agency and allow the AG to do the job they were created to do - serve as the lawyer for the State.
Comment by umm Friday, Feb 18, 11 @ 12:51 pm
Anonymous @ 12:40 -
What you say about much going into the “end product” produced by the AG is true, and it is valid.
But b/c something is not perfect, or b/c it is messy, doesnt mean that you throw the baby out with the bathwater.
Look - I am a big baseball fan, and baseball has many, many performance metrics to judge a player.
RBI’s - you cannot get an RBI without a guy being on base in front of you (ignorning a HR) - but still, RBI is a measure, not a perfect one, but a measure, of player performance. It’s part of the picture, a very complex picture, but it’s valid to look at.
It’s messy, I admit it. But the system now is messy too, we just dont see it in the general public.
How do you judge if the AG is doing a good job? You have a metric, you must. If the AG came in next year and said “ok, we collected $12 dollars and 82 cents” - you are going to tell me you wouldnt think “They didnt do their job as well as they should have” b/c it is complex?
I am just saying let’s define the metrics and go from there, let’s see what happens.
If you dont like my metric, suggest others, I am open.
On what basis do you decide whether the AG is doing a good job? I am curious. Or do you just say “there is no possible way to determine whether the AG is doing a good job - it is too complex to make a determination.”
Comment by Peter Snarker Friday, Feb 18, 11 @ 12:51 pm
== If they need more assistance or a bigger budget to go after what is due us, they should prove the need and get in line. ==
They do every single year, and every single year the General Assembly appropriates less than they need and the Governor further reduces their budget.
Comment by umm Friday, Feb 18, 11 @ 12:52 pm
No. Great job by the AG but it is their job.
Comment by Anonymous Friday, Feb 18, 11 @ 1:06 pm
No.
First of all, the aggregate numbers are skewed. As mentioned earlier estate taxes just happen to be processed through the agency. Counting the tobacco settlement monies as a credit for work done in the past year is a bit much. That drops the money collected by more than 500 mil.
Running on a contingency could incentivise overly aggressive collections from the public.
Comment by Plutocrat03 Friday, Feb 18, 11 @ 1:08 pm
Pluto -
then couldnt the failure of incentives mean under-aggressive collections?
Pick your poison. If incentives drive behavior it works both ways.
Comment by Peter Snarker Friday, Feb 18, 11 @ 1:14 pm
No. They are not a private law firm. Prosecutors’ Offices always exaggerate the numbers of dollars recovered to make themselves look good. US Attorney always inflated the numbers too - included judgments (often uncollectible) and fines and always before any private co-counsel’s fees were paid. It’s just a gimmick.
Comment by formerpolitico Friday, Feb 18, 11 @ 1:14 pm
“Should state law be changed to give the Illinois attorney general’s office a set percentage of the settlements and lawsuits it wins for Illinois?”
No. Just as allowing police departments to keep and sell impounded vehicles can lead to abuse, so could allowing the AG office to keep the spoils of its work.
– MrJM
Comment by MrJM Friday, Feb 18, 11 @ 1:25 pm
Without going into details re the agency I work for, said agency has generated “income” from outside sources and has had to turn over all said income to the GRF. The agency does not retain any of said income.
The AG should do the same. We’re all in this together!
Comment by dupage dan Friday, Feb 18, 11 @ 1:43 pm
No … Was any or all of these recovered funds budgeted as REVENUE? If so how close was the budgeted number?
Comment by JustMe_JMO Friday, Feb 18, 11 @ 1:50 pm
Of course not. There’s ongoing debate about whether states or other governmental entities should even hire private attorneys on contingent fees. Is it inconsistent w/ the basis for contingent fees and bad public policy when the result is a very large fee to the private attorneys when the litigation could have been funded by the state.
Comment by D.P. Gumby Friday, Feb 18, 11 @ 2:06 pm
Peter Snarker - Anonymous @ 12:40 here.
Good points - it is darn challenging. First, you need to eliminate the “falls into their laps” revenue. Then perhaps you could look at the matters referred by agencies and the “yield” on those collections. I.e., if EPA refers cases with stated fines levied of $10 million, you could track actual recoveries versus referrals. But even that’s complex - if the yield is low, is it because the law is poorly drafted, because the agency overreached, because the agency didn’t develop the factual support or because the AG didn’t litigate well? I suspect there are measures that corporations use to try to evaluate the performance of their outside law firms; maybe there are some ideas to be found there. Of course, the ultimate incentive for outside law firms is they know they can be “fired”. The agencies have to work through the AG regardless of how good of job is done.
Further, there might be competing considerations going on. An agency might want to take a “no settlements” posture, either to create sufficient deterrence or because the public hates to see lawbreakers apparently getting off on the cheap. Do you want the AG to be trying to settle cases to ratchet up their numbers in conflict with agency goals?
Very complex road to head down.
Comment by Anonymous Friday, Feb 18, 11 @ 2:29 pm
Anonymous @ 2:29:
You’re totally right - all of this is way too complex to be built into a statutory scheme for the AG and then possibly every other agency.
As to something else you said:
Ding Ding Ding - when you cant be fired (as an entity and as an individual) at the State, and when there is no incentive to do “more” than your job, and no incentive not to do “less” than your job, you are going to get the outcome that you would expect.
Comment by Peter Snarker Friday, Feb 18, 11 @ 3:14 pm
Lisa Madigans office should also have millions removed from her budget because of her office’s compliant nature in workers comp fraud that is costing the state millions. The AG’s office represents the states interests in workers comp and apparently the State of Illinois has no interest in a fair and equitable process.
Comment by fed up Friday, Feb 18, 11 @ 3:16 pm
Probably not a good idea. However, years ago when I worked at Revenue, we suggested this funding methodology for certain programs of tax enforcement that would have returned 8$ for every 1$ spent (based on pilot program), and couldn’t get it funded. State lost a lot of income because of the limited way it funds programs.
Comment by wordonthestreet Friday, Feb 18, 11 @ 3:19 pm
No…law enforcement should not be driven by the profit motive.
Comment by Louis Howe Friday, Feb 18, 11 @ 3:30 pm
sorry, i get paid a salary and i dont get any compensation for bringing in more money
Comment by we are out of money Friday, Feb 18, 11 @ 3:34 pm
The concept of individual incentives at the State is so foreign as to be non-existent.
The whole discussion is more like a college-bull-session - nothing would ever be funded in such a way to tie the hands of the powers-that-be from deciding year-by-year what standards they will, or will not apply.
It’s much easier and more loosey-goosey and friendly to friends to have no standards and make it up as you go along than actually hit targets and metrics publicly set in advance.
Here AG says “We pulled in $1B” - sounds great, doesnt it?
But what if you next found out they historically brought in $2B… we have no metrics. We have no measurements. We cant agree on measurements. We are uncomfortable with measurements. State government doesnt work with measurements planned in advance - it is more press-release after the fact “we did such-and-such”. Publishing standards in advance would never, ever happen, let’s be real.
A fun conversation though, seriously, interesting to me.
Comment by Peter Snarker Friday, Feb 18, 11 @ 3:37 pm
No way. It you take what revenue they earned “minus” what the state has paid out to the lawsuits they lost, we are still in the hole!
Comment by Ain't No Justice Friday, Feb 18, 11 @ 3:37 pm
What happened to the 421 fund created for penalties paid to Illinois for collections on Fraud and Abuse? My memory may not be completely accurate, but this fund allows the collecting agencies to keep some of the money collected for their own use. I see no problem with a law allowing a percent of the money raised by the AG’s office to stay there-perhaps with the legal stipulation the is only be used in collection efforts and not for capital costs or travel?
The idea that a percentage fee would be incentive to settle for lower amounts does not appear to be valid. After all, don’t most Attorneys work on a contigency fee for this tpye of work?
Comment by waitress practicing politics. . Friday, Feb 18, 11 @ 4:02 pm
a big yes
we keep arguing the State should operate mre like a business and the private sector. They should be allotted a percentage of their wins and be allowed to pay bonuses. The AG’s office should attract the top litigators, not the ones fresh out of school.
So lets recap, AG’s office brings in way more then it costs, but no one wants them to build on this and generate more rveneue? but we want them to be like the private secotr where law offices operate off of what they bring in…
so do we want the State to function more like the private sector or not?
ok then lets raise taxes and increase funding to the AG’s office that way. Either way they are grossly underfunded. Seems a funding source that encoruages success and rewards success is the perfect system and modeled after our much vuanted private sector business model.
Comment by Ghost Saturday, Feb 19, 11 @ 10:25 am