Illinois' Finances

Illinois Speaker Madigan, not to be confused with his daughter the Attorney General, has weighed in on Governor Blagojevich's ill-considered plan to sell the Illinois Lottery to fund schools. Madigan makes a few good points, one which essentially illustrates that the lottery is a regressive tax, hitting the poor the hardest, and hints that it is ethically dubious and should not be expanded (an unusual objection in Illinois). Tribune:

His letter questions what further impacts the proposal would have on the state, such as possibly allowing a new aggressive marketing to minority groups, the poor or the elderly.

He asked whether there would be more opportunities to play the lottery, "including the construction of keno parlors in communities throughout the state?"

As far as privately leasing the tollway, that may be a good idea, as long as it is not squandered on pork and actually funds the pension gap. And possibly the state can avoid the temptation for corrupt hiring practices. Of course labor unions are opposed, but the state would get more bang for its buck. Tribune on the hearings:

Representatives of two labor unions provided the only opposing viewpoints during the more than three-hour hearing in the Thompson Center downtown.

Tyler Duvall, an assistant secretary in the U.S. Department of Transportation, said the federal position has shifted from "skepticism to support for states exploring public-private partnerships," in part because of the operating efficiencies and resources the private sector can provide to help relieve traffic congestion in urban areas.

The key to serving the public interest in any privatization deal is a detailed contract that protects all parties, said Geoffrey Segal, director of government reform at the Reason Foundation, a California think tank that supports privatization of many government services.

Reason is a good source of information on an additional issue the governor has been touting--universal preschool, which is now on the ballot in California. Christian Science Monitor:

But even as proponents tout the idea as the only safe educational investment, some critics question lavishing money on toddlers. They cite the "fadeout" effect some studies have shown, in which educational gains disappear after a year or two, and question the wisdom in offering universal pre-K, rather than targeting high-quality programs to children who need it most.

A Reason study suggests that a government universal preschool program would wipe out private preschools and parents' choices along with it, and questions cost assumptions of such a program:

A Rand Corporation study that claims universal preschool will deliver $2.62 in benefits for every dollar spent by California taxpayers has been thoroughly discredited by two San Jose State University economics professors who show the Rand preschool study "cherry-picked" data, based its claims on "unbelievable assumptions that bias the results," and omitted numerous costs and other factors that significantly lower the alleged benefits of universal preschool. The review of the Rand report, published by the Reason Foundation, uses Rand's own data and methodology and finds that California would actually lose 25 to 30 cents for every dollar spent on universal preschool when just a few of the Rand report's most glaring mistakes are corrected. And the Reason study concludes those losses would be even greater if many of the proposed preschool program's costs, wrongly excluded from Rand's calculations, were included in the analysis.

So Illinois' precarious financial position would be worsened, with dubious benefits. Governor Blagojevich needs to go back to the drawing board.

Illinois voters need substantive solutions to the state's financial difficulties, and serious answers from the governor.