May 18, 2017

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Illinois, Latest News

Rauner Tries To Paper Over Sagging Economy As State Loses 7,000 Jobs For The Second Month

With Jobs Fleeing, $14.3B in Unpaid Bills, and No Budget, Rauner Turns to….Marketing?

Today the Rauner’s administration announced the state shed 7,200 jobs last month, making it the second month in a row the state lost over 7,000 jobs.

It’s probably no coincidence Governor Rauner tried to distract from today’s terrible news by naming a new CEO to the state’s economic marketing arm, Intersect Illinois. Ironically, Intersect Illinois’ previous CEO admitted that the state’s budget impasse made it hard for him to “sell” Illinois to companies.

 Unsurprisingly, Rauner ignored the best way to market the state: by passing a budget, paying some of Illinois’ $14.3 billion in bills, and restoring his devastating cuts to higher education.

“No amount of marketing can paper over the fact that Illinois is falling behind under Bruce Rauner,” said DGA Communications Director Jared Leopold. “Today’s job announcement confirms the damage Bruce Rauner’s failed administration is doing to the state. Bogged down by $14.3 billion in bills and a slipping credit rating, Illinois desperately needs a governor that will step up and pass a budget. Bruce Rauner has so far proved he is not that kind of leader.”

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BACKGROUND:

Rauner Acknowledged That Privatizing The Way Illinois Recruits Businesses Was A Way To Weaken Worker Rights. According to the Chicago Tribune, “But much like the governor’s legislative agenda, Democrats view Rauner’s privatization agenda through a different lens: rooted in an effort to reduce costs on taxpayers and businesses by weakening worker rights. […] Indeed, Rauner acknowledged as much when he announced the change in how Illinois recruits businesses. The governor said he was outsourcing the state’s economic development efforts to a private corporation to get around hiring restrictions like seniority rules, salary limitations and requirements to hire from within the ranks of state employees. ‘We want the best and the brightest, most creative deal structures in the world to come here,’ Rauner said. ‘They’re not going to go through that baloney. Running our state government with the restrictions we’ve got around recruiting talent is almost impossible. And this is going to free us up from a lot of it.’” [Chicago Tribune, 4/30/16]

  • Rauner’s Head Of The DCEO Said The Privatized Agency Could Bypass Unions Regulations. According to the Effingham Daily News,“That’s why Schultz, who met with the Effingham Daily News editorial board on Tuesday, hopes the Illinois General Assembly approves the creation of the Illinois Business and Economic Development Corporation, a not-for-profit entity under DCEO oversight that would focus on business development, small and minority-owned business incubation, trade and investment, tourism and film. Schultz said that would allow DCEO to sharpen its focus on employment and training, community development, energy and recycling, urban assistance and energy assistance. […] He added that the new entity will be able to do things that DCEO can’t do, such as bypass union regulations to become more flexible and attract the top economic development professionals.” [Effingham Daily News, 4/29/15]

Rauner’s Private Economic Development Corp. Would Not Be Subject To Government Contractor Transparency Laws. According to the Chicago Tribune,“The legislation that stalled in the General Assembly spelled out that the private entity would be treated as a government contractor under open records laws. Rauner’s executive order makes no mention of whether the public would have access to the private entity’s records. Rauner brushed away a question about how the executive order differs from the stalled legislation.” [Chicago Tribune, 2/4/16] 

  • Intersect Illinois Called A “Shadow Non-Profit Group” Created To Bypass Salary Limitations. According to the Chicago Tribune, “One of Rauner’s private-sector philosophies is that state government pay isn’t adequate to attract top-notch talent. Getting around salary limitations to recruit into the state’s economic development department was one of the reasons Rauner cited last year for creating a shadow not-for-profit group to work alongside the state agency.” [Chicago Tribune, 4/3/17]

BGA: Watchdog Groups Questioned If Intersect Illinois Added To State Bureaucracy. According to a Better Government Association report in the State Journal-Register,“Watchdog groups also raised concerns about whether Intersect was adding to bureaucracy rather than reducing it.” [State Journal-Register, 2/19/17]

  • Peoria Journal-Star Editorial: DCEO And A Private Economic Development Agency “Would Seem A Bit Redundant.” According to an Editorial by the Peoria Journal-Star, “Of course, this proposal begs the question: If a new agency is to be created to do all of the heavy lifting on economic development matters, then why do Illinois taxpayers still need a DCEO and its payroll of some 350 people? Should a DCEO its own leader has acknowledged is not getting the job done even be trusted in an oversight capacity? Anyway, it would seem a bit redundant.” [Peoria Journal-Star, editorial, 5/5/15]

Experts Said There Was Little Evidence That Private Economic Development Agencies Perform Better. According to the Associated Press, “But experts on corporate tax breaks say there’s little direct evidence that private development agencies are better than their public counterparts. And skeptics see a potential minefield of ethical challenges in letting a private corporation overseen by political appointees make decisions about which companies receive state subsidies. [Associated Press, 5/3/15]

  • CEO Of Economic Development Council Said There Was “No Evidence A Private Agency Does A Better Job.” According to Crain’s Chicago, “I got a different view from Jeff Finkle, CEO of the International Economic Development Council. ‘There is no evidence a private agency does a better job,’ says Finkle, whose Washington, D.C.-based group represents public and private organizations. Noting that some states, including Arizona and West Virginia, have shifted back and forth between public and private agencies, he opines that if the private model worked better ‘they would keep it.’ The primary role of economic development agencies, public or private, is to foster job creation, usually by giving tax breaks to companies that promise to hire people in the state.” [Crain’s Chicago, 4/27/15]