From Illinois Business Journal news services
CHICAGO – Speaker of the House Michael J. Madigan this week announced creation of a bipartisan special House committee to review Gov. Bruce Rauner’s plan to establish a private company that will work with the Illinois Department of Commerce and Economic Opportunity to dole out state money and tax breaks to corporations.
Madigan said the move was to make sure that any public-private partnership created in Illinois be done ethically and meet transparency requirements.
“The formation of a public-private partnership could produce lasting benefits, but our obligation to taxpayers includes working to ensure transparency and integrity within the program,” Madigan said. “I support efforts to boost Illinois’ economy and create more good-paying jobs for middle-class and struggling families. That’s who should benefit from a public-private partnership, and the tax dollars given to any corporation should be spent wisely and with the proper oversight.”
Earlier this month, Rauner announced a plan to create a privately run economic development corporation that would partner with the state Department of Commerce and Economic Opportunity. While Rauner said the corporation would be funded with private donations, taxpayer dollars would still be at stake and DCEO would be required to approve any incentives or deals offered to companies.
Last spring, Madigan worked cooperatively with Rauner on the governor’s request to create a public-private partnership in Illinois. However, the measure failed to advance beyond passage in the House due to the governor’s opposition to Madigan’s belief that the partnership should be reviewed after three years to ensure tax dollars are spent wisely and to determine if it is functioning as intended.
Similar public-private efforts in other states have experienced problems in recent years. The Wisconsin Economic Development Corp., for example, was criticized in an audit for, among other things, not requiring financial statements from companies receiving incentives, granting awards to ineligible businesses, failing to ensure jobs had been created by companies after awarding them with nearly $1 million in tax credits, and in some cases hiring firms with conflicts of interest. In Virginia, it was reported that a public-private infrastructure project, due to a lack of transparency, led to massive cost overruns and ultimately the state halted the project, but not before taxpayers had paid the contractor $290 million for the unfinished project.
The private corporation, as proposed by the governor, would not be subject to the requirements of the Freedom of Information Act, as confirmed by DCEO director Jim Schultz. Madigan said that must change to permit greater transparency of how taxpayer dollars are being expended.
“Given what has happened in other states due to the lack of transparency and proper oversight, my belief today is the same as it was last year, and that is that a public-private partnership can be achieved, but with the proper safeguards and transparency in place,” Madigan said. “Illinois is facing unprecedented fiscal challenges, so taxpayer dollars must be used wisely and efficiently. Simply authorizing a public-private partnership without taking into consideration the controversy that has occurred in other states is not in taxpayers’ best interests.”
State Rep. Lou Lang, D-Skokie, will chair the Special Committee on Public Private Partnerships, and House Democratic members will include Reps. Chris Welch of Hillside, Will Davis of Homewood, Carol Sente of Vernon Hills, Fred Crespo of Hoffman Estates, and John Bradley of Marion. House Republicans are expected to name members to the committee.