Charting A New Course
As Governor Edgar began his administration by demanding that state government embrace the type of fiscal discipline that Illinoisans must demonstrate every day to balance their own checkbooks. To put it simply, the state should have to live within its means and stop spending money it did not have.
Instead of raising taxes, the Governor charted a new fiscal course. In his two terms in office, the budget was balanced; spending was slashed by more than $2.5 billion; programs were restructured, streamlined and eliminated. Despite adding thousands of new state employees for child welfare, he reduced the overall number of state workers by 2500 and economic development efforts were enhanced to improve the business climate.
Bolstered by Edgar’s sound financial management, a mountain of unpaid bills was paid off, record high funding was provided for education, Wall Street upgraded the state’s bond ratings and unemployment reached a 25-year low. By his final year in office, the budget was balanced and he left a surplus in the state’s coffers of $1.2 billion. And in 1998, Edgar provided income tax relief for Illinois wage earners for the first time in nearly 30 years.
In his Inaugural speech, Edgar said Illinois could survive its tough fiscal times if it had the discipline to set priorities, to make budget cuts and look for new ways to approach old problems.
When Jim Edgar took the oath of office as the 38th Governor of Illinois on Jan. 14, 1991, he knew the state faced fiscal problems. He could not have imagined how bad. They would only get worse.
The national recession was weakening Illinois’ economy, pushing up jobless rates and welfare rolls and reducing tax revenues. Lawmakers had spent money the state did not have and delayed paying bills to make it appear that the fiscal books were balanced. The house of cards on which the state’s budget had been built was about to collapse.
The new Governor found a $1 billion hole in the budget that somehow needed to be plugged. There were more spending demands than the state could afford. Creditors were knocking at the door. And the Democratic- controlled General Assembly was waiting to see just how this Republican Governor would resolve this mess without abandoning his campaign pledge to veto any income and sales tax increases during his first term.
Edgar was no stranger to dealing with the legislature, having spent nearly his entire adult life working in the state Capital. As Governor, he was effective year-in and year-out in getting the state budget approved with his priorities.
In December 1990, shortly after his successful gubernatorial campaign, two members of his transition team, Arthur F Quern, Gov. Thompson’s former chief of staff, and Pete Peters, former Illinois House GOP leader, visited the new Governor and delivered the bad news. The state’s fiscal mess was worse than originally thought. The excesses of the 1980s had caught up with Illinois and the state could not pay its bills on time. There would be no easy fix.
“Is it too late for a recount?” asked Edgar jokingly.
Even though he had yet to spend his first day as the state’s chief executive, the defining moment of the Edgar administration was already at hand. But Edgar had prepared his entire adult life to lead the state and he relished meeting the challenge.
The day after taking the oath of office, Edgar entered his office in the state Capitol and announced the state faced a $300 million shortfall in the fiscal budget he inherited and which still had five months to run. He instructed agencies to cut $87 million from their budgets. He ordered job vacancies frozen. He reduced or eliminated various contracts. Spending on travel and equipment was curtailed. Bond sales were reduced, and capital projects revised to slow spending, delay construction and reduce debt service. In his own office, Edgar slashed jobs, saving nearly $1 million in a single stroke.
Two months later, in his first budget address, Edgar told lawmakers that state government had not been watching the bottom line and had gone on a spending binge with money it did not have. “It is time that we tear up our credit cards and put a screeching halt to the spending spree,” the Governor said.
To cover the state’s budget problems, Edgar stood firm in restoring fiscal stability to Illinois without asking more from taxpayers. Here, in 1991, the Governor holds one of many discussions with legislative leaders to resolve the budget crisis.
With state government back on a solid financial footing, legislators facing re-election in 1998 decided to provide individuals and businesses with tax relief. After warning lawmakers not to get greedy, Edgar approved a plan that would provide taxpayers more than $96 million in income tax relief in 1999, increasing to about $321 million in tax relief by 2000. The legislation marked the first increase in the personal exemption since the Illinois income tax was enacted in 1969.
The new law increases individual exemptions for taxpayers incrementally from the current $1,000 to $2,000. When fully implemented, the first $8,000 in income for a family of four will be exempt from state taxes. The law also phases in a single sales factor apportionment for businesses over three years beginning in 1998. By 2000, more than 7,000 Illinois businesses will receive about $63 million in state tax savings from the changes.
With his new dog, Emy, at his side, Edgar works at his state Capitol desk during the early months of his administration.
Illinois collects $32 billion in revenue each year. While the state cannot ease the pain of paying taxes, it can make it easier to file income tax returns. In 1991, Illinois became one of the first states to accept individual income tax returns electronically, and by 1998 nearly a half million IL-1040s were received over computer lines.
The state also pioneered filing by telephone in 1998 and nearly 120,000 taxpayers took advantage of TeleFile.
To ensure the state receives all the taxes to which it is entitled, Illinois changed its collection emphasis. Rather than using field collectors as its primary enforcement tool, the state opted for identifying assets and consolidating multiple tax debt in a single collection account. The Illinois Collection System consolidates all debt owed by a taxpayer so collectors can pursue all tax types at the same time. It was implemented in 1993 and, during the first year of operation, there was a $28.5 million increase in collections. More than $280 million in tax debt and another $10.5 million in delinquent child support payments were collected in 1997.
In his first budget address to the General Assembly, Edgar said the state had been on a spending binge with money it did not have. His budget proposal for fiscal 1992 included unprecedented cuts totaling more than $400 million.
In 1991, Edgar’s first session as Governor, he used his legislative experience to pursue an ambitious agenda that had headlined his gubernatorial campaign enacting property tax caps, making the income tax surcharge permanent and balancing an out-of-balance budget with- out raising taxes. Not many gave Edgar much hope for success with the Democratic-controlled legislature. But he refused to budge from his campaign promises and the spring session stretched well into July.
The legislature finally conceded nearly every major point to the new Governor. This was unheard of in Springfield. With the session and impasse finally over, House Speaker Michael Madigan told reporters, “My experience in working with Jim Edgar through the last several months showed me just how tenacious he can be.”
As a candidate, Edgar promised to cap skyrocketing property taxes, which in some Chicago suburban counties had increased by double digits year after year. In 1991, the Governor, accompanied by GOP leaders state Sen. James “Pate” Phillip (left) and state Rep. Lee Daniels (right), signed property tax cap legislation for the collar counties.
Edgar recognized that local governments often suffer from state mandates that provide no funding. He pledged he would veto any legislation that sought to impose unfunded mandates. The Governor kept that promise, rebuffing the legislature’s frequent efforts to mandate projects at local expense. He also provided millions of dollars in financial assistance to communities, often with an eye toward improving business and benefiting the quality of life. Funds went for water and waste treatment facilities; maintaining and building bridges, highways, airports and public transportation systems; park and recreational improvements; and job training and other incentives for economic development.
Edgar enjoyed a close relationship with local governments, listening to their concerns and giving them unprecedented access to the Governor’s office. Fulfilling a campaign promise, Edgar assigned a key aide to be a liaison between his office and local officials.
Although the news media often noted their differences, Edgar and Chicago Mayor Richard M. Daley worked together to accomplish much for Illinois’ largest city.
Edgar, the first downstate resident to be elected governor in 62 years, was accused by some of being anti- Chicago. The Edgar administration record, however, includes economic and infrastructure projects that have enhanced Chicago tourism and business as well as its social service programs.
Chief among those was the Governor’s support for a $1 billion expansion of McCormick Place, which ensured that Chicago remained the foremost convention city in America, and the dedication of a rejuvenated historic Navy Pier as a recreational magnet on the lakefront. Edgar also supported $110 million in bonding to relocate Lake Shore Drive and to create the new landscaped campus joining the Adler Planetarium, The Field Museum of Natural History and the John G. Shedd Aquarium, which was dedicated in 1998. The Governor signed legislation in July 1998 to authorize another $100 million in project bonds to provide additional parking at McCormick Place and a bus lane from downtown to the convention center.
His administration earmarked $450 million for the rehabilitation of the 30-year-old Kennedy Expressway, one of the largest, most extensive repair projects in the nation, and the upcoming $567 million rehabilitation of the Stevenson Expressway, which will be even more extensive. Millions of dollars also were funneled into public transportation and airport improvements.
Edgar downsized state government, insisting on greater efficiency, economy and accountability from state employees. Even with the hiring of new correctional officers and child abuse caseworkers, there were 2,500 fewer employees under his control in 1998 that when he became Governor.
Greater efficiency and streamlining in state government are traditionally popular campaign themes. Once in office, however, a governor can find reducing and reorganizing the bureaucracy a nearly impossible task. Edgar’s campaign pledge echoed many of those before a leaner, more effective government.
But this time, with the treasury nearly bare, Plato’s famous rule began to shine, proving again that “necessity … is the mother of invention.” Thus did Edgar make good on his promise to trim the number of state employees.
Even with 4,000 new hirings to staff an expanding prison system and to add more child welfare case workers, there are 2,500 fewer state government employees under the Governor’s control than when he took office.
Edgar reorganized three state agencies and parts of three others into the new Department of Human Services to better deliver social service programs and replace an out-of-date, fragmented and uncoordinated approach. Here, the Governor visits with children at a Peoria day care center.
Integrity is something Edgar has cultivated since entering political life. Likewise, he stressed it during his two campaigns for governor. Many believe his reputation for plain speaking and honesty is his greatest political asset.
Shortly after taking office, Edgar cut out many consultants with political connections to both parties. In 1992, he issued an Executive Order targeting abuse and waste in state purchases. It required that agencies verify why they suspended competitive bids as an emergency measure.
In September 1997, Edgar issued an unprecedented Executive Order addressing tougher ethics and procurement reforms for all executive agencies and departments. Also, he required each agency to assign an ethics officer. The new Edgar rules, considered among the strictest in the country by the Center for Governmental Studies in Los Angeles, banned state employees from accepting gifts valued at more than $50 each year from lobbyists or others who do business with their respective state agencies. These same rules mandated competitive bidding for most state contracts exceeding $25,000.
Edgar traveled extensively throughout Illinois, listening to the concerns of his fellow citizens and seeking their advice and assistance in making Illinois an even greater state.
In 1998, the General Assembly finally approved a bill to clean up campaign finances, something Edgar began fighting for during his 1990 gubernatorial campaign.
Described as the most important campaign finance legislation in two decades, the Governor formally put his pen to the legislation in a ceremony at the Public Policy Institute at Southern Illinois University-Carbondale. It was the institute’s director, U.S. Sen. Paul Simon, and its associate director, Mike Lawrence, Edgar’s former press secretary, who spearheaded the effort to produce the accord and guided it through the final days of the 1998 legislative session.
The Chicago Sun-Times wrote that Edgar and Simon “have earned a round of bipartisan public applause for the extensive and common sense array of campaign finance reforms.”
The Governor was not entirely satisfied with the bill, but signed it with confidence that other reforms would follow. Under the new law, lawmakers, for the first time, are restricted from using campaign funds for personal needs, such as cars, college tuition, travel, homes, retirement or debts. It also makes it illegal to solicit or to accept campaign donations on state property and to hold fund-raisers within a 50-mile radius of Springfield when the General Assembly is in session.
Edgar consistently championed greater disclosure of campaign funds, both how they are raised and how they are spent. So that the public would have better access to and more information about campaign financing, the law contained several far-reaching requirements. They include provisions that political action committees fully identify themselves, candidates who raise or spend $25,000 during a reporting period must file financial reports electronically and candidates are required to report the occupations and employers of anyone contributing more than $500. Penalties for violating campaign disclosure laws grew from $1,000 to $10,000 for statewide committees and from $1,000 to $5,000 for other committees.
The right of the public and the media to information became the driving force behind a bill Edgar signed in 1997 that required the Illinois Board of Elections to make campaign finance reports available on the Internet.
The State of Illinois Home Page went on-line in 1995. Depicted is a copy of the page from 1996.
With a push-and-shove from researchers at the University of Illinois at Urbana-Champaign who in 1992 developed the first Web browser, the Internet took off in the 1990s as the latest component of the technology revolution. Edgar viewed the Internet as a way to make information about the state and its functions more readily available to the public and urged agencies, state boards and commissions to establish their own Web sites.
The state launched its initial site in 1993. In 1995, the State of Illinois Home Page went on-line, with Edgar as an avid and daily visitor. By mid-1998, in addition to the Governor and Lieutenant Governor’s pages, there were 89 agencies, boards, commissions and elected officials; nine state universities; 142 municipalities; and dozens of libraries, museums, tourism councils and other government related offices with Web sites linked to the state home page.
In addition to general information about state government and its various programs, the public can use the state’s Web site to purchase fishing and hunting licenses, to look up winning lottery numbers, to pay taxes electronically, to compare automobile and homeowner premiums, to bid on state contracts, to check on inmates in the state’s prison system, to download applications for birth and death records, to learn about the state’s environment, to access up-to-the-minute information on Chicago expressway congestion, to search a listing of Illinois technology resources, to review pictures and information on children awaiting adoption, and, during the Illinois State Fair, to watch videotape of each day’s main events.
The Governor takes advantage of an annual program to provide state employees with free flu shots. Edgar and the legislature boosted pensions and improved health coverage to help make government service more attractive.
While the fiscal times called for a reduction in the number of state employees during the Edgar administration, a concerted effort was made to improve state employee benefits and make a career in government service more attractive.
The Governor approved the most significant increase in pension benefits for state workers in a quarter century. Under this law, signed in 1997, state employees gave up a cost-of-living pay raise and payments for future unused sick days to boost their retirement pay by more than 50 percent. As a result, Illinois moved from next to last among states in pension benefits to near the national average. In addition, the Governor in 1994 proposed and signed legislation setting up a full-funding mechanism for the state’s retirement systems over the next 50 years.
Other improvements included providing 90 percent of state employees a managed care option, establishing a sick leave bank, adding vision and dental coverage, offering a long-term care insurance plan, allowing time off for the birth or adoption of children and for caring for ill family members, and implementing an accelerated benefits option to assist the terminally ill. To improve the health of state workers and to reduce absenteeism, free flu shots and health screenings are offered annually and all state buildings have been declared smoke free. Through an Executive Order, Edgar required sexual harassment training for all employees.