Wednesday, January 18, 2006

The Blagojevich SOS Keynoter: Illinois keno, RIP ?

Slight revisions made and links added on Wednesday night at 9:45 pm.
Although I saw a few fat ladies at the State of the State today, none of them were singing.
As Rich Miller [of Capitol Fax] and today’s Illinois Lawmaker’s [WTTW] host, Jim Tichenor, both noted in their post-game discussion of today’s noon-time, Governor Blagojevich, State of the State speech, the forty-five minute, or so, oration was perhaps more notable for what the Governor didn’t say than what he did. Miller commented, “he [Blago] didn’t mention keno once; his great plan to fund part of this construction program of his was never mentioned. I think it is a big sign that this program, this idea may have to be taken off the table.”

Miller also had noticed, before the speech, the absence of a keno mention in the Governor’s prepared remarks [See here, have a drink on Rich]. And in Miller’s hard copy Capitolfax of this morning, Miller noted the political difficulties of getting the requisite number of Republicans and Democrats to sign on to the Governor’s proposed capital budget, and especially one that includes keno as a part of the financing package.

The Governor’s capitol budget proposal, presented in his usual sketchy format, appears to be for 3.2 billion dollars to be spent on roads, public works, mass transit and school construction. The school construction is supposed to be for about a half billion dollars, and it is to be financed by the annual keno revenue, or a portion thereof.

Of course, don’t dismiss keno just yet. The Governor contends he has the legal power to bring keno to Illinois by executive fiat, without authorization from the legislature, so maybe he thought it unnecessary to discuss keno in his State of the State. And some of Blago’s former campaign insiders, now big time lobsters, stand to rake in very big bucks from the introduction of keno to Illinois.

However, any bonding program requires 60% approval by the Illinois Legislature. Thus, for that part of his plan, the Governor needs some Republican support, even assuming he can keep on board all of the Democrats from the Democratic controlled state senate and state house, which seems dubious at best.

For example, the fairly influential and powerful State Senator Miguel del Valle [D-Chicago], wants a lot more state education spending and he was a big booster of the tax swap, net state tax increase/education spending increase [SB755] legislation earlier last year. Of course, that legislation never really came close to passing the legislature, and it would not have been signed by the Governor, had it done so.

Nevertheless, Sen. del Valle followed Miller on Illinois Lawmakers this afternoon, after the Governor’s State of the State, and Sen. del Valle re-iterated his opposition to keno, asking what is the point of trying to protect working class citizens from what he views as troublesome payday loans [as the legislature thinks it did last year], only then to have the State encourage parents to gamble away their weekly earnings in neighborhood outlets? As the good Senator indicated, gambling in casinos in designated geographic areas is one thing, keno down the street in the family neighborhood, quite another.

Further, the whole capital budget program is being touted, and even reported, as a “job-rich $3.2 billion construction program,” with the Blagojevich Administration promising 230,000 jobs. However, that jobs argument rests on the old, generally discredited, Democratic priming the pump, Keynesian view of the world, and indeed, the argument tries to transplant a dubious national fiscal/economics jobs policy to the State of Illinois.

As to the deficiencies of Blagojevich's [and perhaps the Tribune's] pump priming job creation theories in the context of the federal Transportation bill, See my criticism of Senator Obama's adoption of that job creation theory. For a contra view, See Team Obama's response.

Sadly, many Republicans, like their Democratic colleagues, both nationally and in Illinois, can’t resist the “pork offering,” that goes with the "priming the pump," jobs argument. And, they realize that voters may focus on the jobs “created,” by the spending program without noticing the jobs that are “lost,” due to the increase in taxes and sale of bonds to finance such governmental efforts.

That is not to say that some of the government programs being suggested are not worthwhile on their own, i.e., public roads or private toll roads from time to time are an appropriate expenditure. However, they should be justified on the benefits of the project as measured by users relative to the economic costs of the project, not by some mythical job creation numbers. And, we sure don’t need any more “roads or bridges to nowhere.”

In any case, does all of the above mean that Gov. Blagojevich’s keno plan is Dead on Arrival? Not at all. As Yogi said, it ain’t over till its over. And, although I saw a few fat ladies at the State of the State today, none of them were singing.
"Public Affairs" Jeff Berkowitz, Show Host and Executive Legal Recruiter doing legal search can be reached at