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 Mike Madigan is out as chairman of the Democratic Party of
Illinois, and his successor for the Illinois House is in.
Madigan resigned as party chair a day after saying he had no intention of doing
so.
On Feb. 21 he was asked about when he planned to resign and said: “I have no
idea. I don’t feel a need to step down.”
On Feb. 22 the need was suddenly there: “Over the last two decades, we have
elected a diverse array of Democrats across Illinois and helped send a hometown
Chicago leader to the White House, turning Illinois into a Democratic stronghold
in the Midwest. Together, we faced conservative extremism and stood up for
working men and women. I’m confident the Democratic Party of Illinois will
continue to cement our place as a beacon of progressive values.”
The resignation was immediate. Karen Yarbrough moves up as interim party chair
after serving as vice chair.
Madigan chose his House successor Feb. 21, controlling 56% of the vote. It was
Edward Guerra Kodatt, 26, who since 2017 has worked in the constituent services
office Madigan shares with Chicago 13th Ward Ald. Marty Quinn. Kodatt makes
$42,456 as a bilingual outreach and budget assistant in the office.
Madigan’s district, which surrounds Midway Airport, has the state’s
third-largest Latino population, according to the Illinois Legislative Latino
Caucus. Kodatt is Ecuadorian-American.
After the selection process, Madigan made the comment about seeing no need to
resign as party chairman. But both U.S. Sens. Dick Durbin and Tammy Duckworth,
along with Gov. J.B. Pritzker, saw a need. They called for Madigan’s resignation
as party chair two days after Pritzker’s “fair tax” was defeated, a Democrat
wasn’t retained on the Illinois Supreme Court and other ground was lost by
Democrats in the Nov. 3 elections.
They blamed opponents’ ability to tag Democrats and their issues with corruption
labels after Madigan was implicated in an over $1.3 million bribery scandal
involving Commonwealth Edison. They asked that he resign immediately, but he
refused then as well.
Madigan’s term as party chair would have expired in a little more than a year.
He’s held the spot since 1997.
Madigan was ousted as House speaker Jan. 13, failing to receive a single vote
after serving for 36 years. On Feb. 18 he resigned his House seat after 50
years.
The system of cronyism and corruption that kept him in power for so long has
also been costly for Illinoisans. It kills at least $556 million in economic
growth every year, which between 2000 and 2018 took $830 from every Illinoisan.
A new report ranking federal corruption convictions per capita names Chicago as
the most corrupt city in the nation and Illinois as the No. 2 state, behind
Louisiana. The biggest headline-grabbing corruption revelations of 2019 were not
even included in the latest federal data, the report released Feb. 22 by the
University of Illinois at Chicago stated.
“Bombshell corruption news reports [in 2019] dethroned the city’s most powerful
alderman, upset Chicago’s mayoral election campaign, torpedoed the most powerful
and well-known candidate, and threatened the political existence of Speaker of
the Illinois House of Representatives and Chairman of the State Democratic
Party, Michael Madigan.”
Madigan said his life is improving with “less to do.” Next month, Madigan will
begin collecting his legislative pension, receiving monthly pension benefits
worth $7,100. Just a little more than a year later, his pension will be worth
$12,600 a month. That spike is due to a pension sweetener Madigan helped passed
that is no longer available to lawmakers.
He will draw from a pension system with only 17% of the money
it needs and leaves Illinois with a pension crisis that is the worst in the
nation measured by the state’s debt-to-revenue ratio. It got that way thanks
largely to his alliance with public sector unions and trading generous benefits
for campaign support.
Madigan’s legacy of pension and corruption problems will continue unless
Illinois state leaders champion pension reform, ethics reform and budgeting
reform.
“A lot of issues are important to me,” Kodatt said when asked what his first
bill would be.mad
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Considering the cost of the culture of corruption
and cronyism created by his predecessor, some issues stand out.
Bad accounting has helped Illinois politicians
avoid balancing the budget for 20 years, despite a constitutional
requirement to pass a balanced budget each year. Government
accounting standards that fail to offer transparency and accuracy in
financial reporting have also contributed to the state’s $260
billion pension crisis, the primary reason Illinois has the lowest
credit rating any state has ever received.
The Governmental Accounting Standards Board has proposed changes it
calls “improvements” to the accounting standards for governments.
However, watchdog groups such as Truth in Accounting have criticized
the proposed changes and urged the adoption of more stringent
standards that would require governments to balance their budgets
the way most businesses are required to do. Illinois has grown
accustomed to using lax accounting methods to hide its budget
deficits, racking up debt year after year. The state’s taxpayers
would benefit from tougher standards that impose fiscal discipline.
The standards board sets the accounting standards
for state and local governments. While many private sector companies
are required by law to use accrual-based accounting, which
recognizes income when it is received and bills when they become
due, the board uses modified accrual accounting. Intended as a
hybrid between accrual and cash-based accounting, the modified
system effectively operates as cash-based accounting, in which
revenues are counted when they are received but expenses are not
counted until they are paid. This creates a distorted view of
budgets and enables governments to overpromise – making financial
commitments they have no way of keeping.
Imagine homeowners “balancing” their monthly budget by refusing to
pay their $100 electric bill, instead counting it toward next
month’s expenses just because the bill went unpaid. That is the type
of irresponsible financial management cash-based accounting allows.
These reckless budget practices have helped push Illinois into a
fiscal abyss while also contributing to numerous other problems
plaguing the state.
Current board standards enable governments to use confusing
accounting methods to shield significant problems from the eyes of
taxpayers rather than promoting transparency in the use of public
funds. Truth in Accounting, an independent financial watchdog, said
these methods allow governments to “ignore long-term liabilities,
such as the pension and health care promises they made to their
government workers.”
Truth in Accounting is leading an effort to push the standards board
to adopt stronger standards and urging the public to write to the
board during the open comment period, which runs until the end of
February. It wants the board to adopt what it calls FACT-based
accounting – Full Accrual Calculations and Techniques. Using this
method “would mean that the financial statements used for budgeting
must show expenses as they are incurred, especially when a
government makes a promise to pay in the future.”
Truth in Accounting CEO Sheila Weinberg recently highlighted an
example of how deceptive financial practices mislead the public and
hide the true fiscal state of public entities. Weinberg pointed to a
Chicago Sun-Times 2019 headline about the Chicago Public Schools
that said, “CPS finishes year with budget surplus,” when CPS had a
loss in excess of $750 million and net liabilities over $14 billion.
The “surplus” was only in the general fund and was calculated using
cash-based accounting.
The board standards lack the stringency necessary to keep public
sector budgets operating in a responsible manner. Citing board
standards, the Financial Times concluded, “Politicians are
encouraged to lowball both the value of public assets and the cost
of promises made to public-sector workers. It’s a recipe for poor
governance, if not outright corruption.”
Illinois’ unfortunate triple crown of lax accounting practices, poor
governance and corruption drag down its economic growth,
contributing to residents leaving the state. Unsurprisingly, recent
research from the University of Illinois-Chicago found the state to
be the second-most corrupt in the nation. Worse, that corruption
comes with a hefty price tag. Research from the nonpartisan Illinois
Policy Institute found the state loses $556 million each year due to
corruption’s stifling effect on economic growth.
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