Fending off the next big

bailout: state pensions

The 2012 Illinois
Piglet Book
John Tillmans 2012
election analysis
IllInoIs PolIcy InsTITuTe | WInTer 2012
Illinois labor law
created union monster
inside
Compass
About us Te Illinois Policy Institute inspires changes in hearts, minds and laws through its mission to promote personal
freedom and prosperity in Illinois and America. As a leading independent, 501(c)(3) research and education organization, the
Institute generates positive and sustainable policy solutions for citizens and lawmakers that help unleash talent and entrepreneurial ability.
190 S. LaSalle St., Suite 1630, Chicago, IL 60603 312.346.5700 | 802 S. 2nd St., Springfeld, IL 62704 217.528.8800
3 letter from the ceo
4 Letter from Springfeld
5 Donor profles: Randy Nornes and Nancy Anetsberger
6 John Tillmans 2012 election analysis
8 cover story: Illinois labor law created union monster
11 lawmakers play by their own set of pension rules
12 Fending off the next big bailout: state pensions
14 Liberty Justice Center continues fght for liberty in Illinois
15 chicago charter schools top list of best performers
16 Policy & impact update
17 62% of counties violating web transparency laws
18 The 2012 Illinois Piglet Book
20 Teacher retirement: who should pay?
22 Institute events
26 Digital outreach expands impact of liberty movement
27 staff spotlight: John Knowles
Editor-in-Chief Daniel Anthony
Creative & Art Director Teresa OLeary
Senior Editor Hilary Gowins
Production Director Teresa OLeary
Events Editor Chris Andriesen
An Illinois Policy Institute publication
WINTER 2012 | COMPASS | 3
Leading policy indicators
John Tillman
CEO
You have heard of leading economic indicators those reports that provide a glimpse of whats on the horizon and
help inform your spending and investment decisions. In that same vein, our work is a leading policy indicator.

Tis issue of the Compass, along with all of our other work, provides you with something special a policy early
warning system. So whether you prefer the printed word, Tweets, eCompass emails, videos or our policy PDFs,
you have multiple mediums through which to get an indicator of the future.

More than a year ago, we were the frst to warn about the coming campaign to change Illinois Constitution and
impose a progressive income tax. Some on the lef and in the media ridiculed the notion. Today there is a full-
blown, union-funded campaign. You can read Vice President of Policy Ted Dabrowskis take on page 12.

For years the Illinois Policy Institute has been warning that the unions were gaining ever more power in government
and over taxpayers. Some claimed we were like the boy who cried wolf. Today, following the Chicago Teachers
Union strike, it is now accepted that the unions wield unprecedented power and can hold us all hostage since they
are a monopoly provider of public services. To learn more about the real source of union power, read Director of
Labor Policy Paul Kerseys analysis on page 8.

We have been saying for years that charter schools are a key part of improving the lives of Chicagos children,
especially those who are poor and disadvantaged. To see just how well charters are doing to change childrens lives
for the better, read Director of Education Reform Josh Dwyers charter excellence article on page 15.

To reform Illinois, we must face the truth. No one provides such an early indicator of the truth across such a
broad array of issues as our amazing team at the Institute. We are grateful for the support you provide to make this
important work possible.

Merry Christmas and happy holidays,

John Tillman Chief Executive Offcer
P.S. I predict we will soon hear that Medicaid is broke once more despite last years reform. Tis is your leading
policy indicator at work!
Letter from the CEO
4 | COMPASS | WINTER 2012
You may be facing another state income tax hike sooner than you thought. And you can do something about it.
Two years ago, House Speaker Mike Madigan, Senate President John Cullerton and Gov. Pat Quinn used a lame
duck session to ram through their 67 percent tax hike on a purely partisan vote. Tey sold this as a temporary
measure with a partial sunset in 2015.
Te states Democratic leadership may ram through another tax hike during a special session in January. Te most
likely outcome is that theyll try to make the 2011 tax hike permanent. Tey could try to take the rates even higher
maybe 6, 7 or even 8 percent. Are you ready to lose another weeks pay to a tax hike? Im not.
Why are Illinois Democrats pushing this now? A few key reasons:
Overspending madness. Democratic leaders cant keep their wasteful spending habits in check. Tey need
quick cash to placate their special interest constituencies.
Lameducks. At least 15 percent of the Legislature will be lame ducks afer the election, and the temptation
to vote for tax hikes with the hopes of landing cushy state jobs or contracts will be high. Weve seen it before.
2014gubernatorialrace. No Democrat who runs for governor in 2014 will want to deal with an expiring tax
hike it raises awkward questions about keeping promises. Better to take it of the table now.
Progressivetax. Union-funded forces want to put a progressive income tax on the 2014 ballot. Its an easier
sell if it is framed as a tax cut for more people, which they can more clearly do if they make the 2011 tax hike
permanent now.
Asatradeforpensionreform. Its possible that Democrats will pitch the tax hike as a trade for wishy-washy
pension reform the blueprint is the Medicaid package from May. Tis is a trap that Republicans must reject.
Good policy results trump a seat at the table.
If you look closely, you can already see the states liberal forces laying the necessary groundwork. Be on guard.
Can we count on you to help us send a strong message?
Sincerely,
Kristina Rasmussen
Executive Vice President
P.S. Put the tax hikers on watch: were fed up and ready to fght. Visit illinoispolicy.org to learn more.
Kristina rasmussen executive Vice President
Letter from Springfeld
Behind closed doors: Another income tax hike?
WINTER 2012 | COMPASS | 5
Randy Nornes is a natural optimist with a thirst for
success. He is the executive vice president of Aon Corp.,
and recently celebrated his 25th anniversary with
the company. Randy and his wife are active in their
community, supporting various civic and charitable
organizations, such as Boardroom Bound, Youth
Technology Corps, Envision Unlimited and Arogya
World. Randy also serves as chairman of the board for
the Mid-America Club.
Randy and his family live in Naperville, but he and his
wife plan to move to downtown Chicago afer their
children leave home.
Illinois is a terrifc place to raise a family, he said. I
used to live and work in New York. Chicago ofers all
the benefts of a big city, with few of the hassles.
Despite his love for Illinois and general optimism,
Randy is having a difcult time remaining positive
about his state.
Based on the path we are on, Illinois is headed toward
collapse, he said. Corruption and incompetence are so
ingrained in public policy that voters seem oblivious.
Low-information voters allow this to continue.
Randy continues to support the Illinois Policy Institute
because it highlights critical issues and provides
invaluable information to Illinoisans.
Change will occur when people see the facts and realize
that politicians have been misleading them for years,
he said.
Former President Ronald Reagan once said, All great
change in America begins at the dinner table. For
Hinsdale resident Nancy Anetsberger, the cultural
tradition of discussing politics and policy at the dinner
table began at a young age. Today, that tradition
continues in her own home. When her son Jordan, a
junior at Hillsdale College, interned at the Illinois Policy
Institute this summer, his activities and experiences
sparked lively dinner conversation.
Nancy has spent most of her life in Illinois. She loves
the states heritage and the legacy of Abraham Lincoln.
She has a particular interest in economic policies that
directly impact small businesses in Illinois, like the one
her husband owns.
Passionate about turning Illinois around, Nancy frmly
believes that state tax rates and wasteful spending
discourage business development in the state, which
hurts families.
Her concerns led her to support the Institutes work.
I am so glad that our family has become more aware
and involved with the Institute, she said. We are very
impressed with the wide-ranging projects to which the
Institute devotes itself. Te Local Transparency Project
was particularly interesting to us, and we reviewed the
audit results of our local taxing bodies. Using the results
of Institutes audit, our local government has made
signifcant improvements in the quality and usability of
its website.
Aside from politics, Nancy enjoys cooking, photography,
scrapbooking and volunteering in her local community
at the Hinsdale Police Department. We thank Nancy
and her family for their dedicated support and hope our
work will spark many more lively dinner conversations
in their home.
Randy Nornes
by MaryAnn McCabe
External Relations Associate
Photo: Mark campbell creative
Nancy Anetsberger
by Natasha Malik
External Relations Associate
Photo: Mark campbell creative
Donor profles
6 | COMPASS | WINTER 2012
Te re-election of President Barack Obama and the loss of Republicans in the Illinois House and Senate, which
reduced the party to a superminority status, should be a wake-up call for everyone in the liberty movement. Ive
spent weeks reviewing the inputs and the outcomes, trying to make sense of it all.
Te following are some of my initial refections youll read much more from me in coming months about what
we can and must to do better to win the future for freedom.
1.AlookattheProgressiveCoalitionsorganizationandpersistence. Te Progressive Coalition includes
government and private sector unions, the trial bar, government-dependent nonprofts and the radical
green movement. Tese groups are aligned for a singular common purpose: to use government to extract
wealth and income from the private sector for their own distribution and consumption.
Powerful unions are at the apex of the Progressive Coalition because they have a constant stream of funding
that fows into their cofers from mandatory dues. Tis money feeds the entire political organization state-
by-state, county-by-county, local board-by-local board. Tey hire, train and deploy organizers directly or
as part of their larger coalition and through nonprofts. Tese organizers, lobbyists, nonproft stafers and
rank-and-fle members identify persuadable voters, then contact and persuade this targeted audience. Tis
goes on year-round, every year, whether there is an election or not.
2.TeCenter-RightCoalitionneedstostepitup. Te Center-Right Coalition has no singular unifying,
organizing purpose other than broad agreement on a range of principles and issues. Most of the Center-
Right Coalition just wants to be lef alone, usually only coming together for election cycles. While some
elements of the coalition are permanent, such as think tanks and other advocacy groups, the vast majority
are candidate-dependent.
Heres a great illustration of how the Center-Right Coalition is too ofen doing too little too late: Te union-
led Progressive Coalition hired its Ohio campaign director through Obama for America in March 2009.
Te Center-Right Coalition with fragmented leadership hired its Ohio campaign director through the
Romney campaign following the 2012 primary season.

As this is being written, prospective GOP candidates for Illinois 2014 gubernatorial race are announcing
and planning their campaigns. Tey will all build a campaign infrastructure around their personal needs.
Meanwhile, House Speaker Michael Madigan is planning for 2014 and how he can turn out the vote
regardless of who the Democrat nominee is. He is recruiting candidates for the General Assembly and has
by John Tillman Chief Executive Ofcer
2012 election analysis
WINTER 2012 | COMPASS | 7
been every day for the past 40 years. He is training, evaluating, teaching, mentoring, punishing and cajoling
now, just as he has always done. What is the center-right doing?
3. Invest in structure. Te Progressive Coalition has permanent infrastructure stafed by professional,
well-paid, highly motivated organizers. Tey have a leadership and operational structure with well-defned
roles, responsibilities, accountability mechanisms and clear consequences for good or bad performance.
Te Center-Right Coalition has no comparable structure. Te good news is that this is fxable. Further
good news is that a number of leaders in Illinois began investing in addressing this issue during the past
two years and those investments will continue in 2013 and beyond. Te efect for this cycle was insufcient
but a foundation was laid, lessons were learned and growth of structural capacity will continue.
Te bad news is that this growing capacity will be opposed by the party structures and the consultancy class
because it will be perceived as a threat rather than the help it really is. Tat must be overcome.
Te Center-Right Coalition must continue to build the permanent infrastructure that can compete to win
and advance a liberty agenda. Tis infrastructure must not be accountable to any candidate, party or to the
consultancy class. It must be accountable to its investors and its mission: to see that a free enterprise agenda
prevails in Illinois.
4. Caucus leadership and brand diferentiation. You have to have compelling brand distinction to
persuade more voters to your side. Its Marketing 101.
Lexus and BMW compete. Tey want the same customers, but they have two distinct brands. Does BMW
say, We are almost just like Lexus? No. BMW is the ultimate driving machine. Tis diferentiation
attracts a diferent set of drivers and expands BMWs customer base over time. Similarly, Republicans need
to increase their appeal by separation, not by blurring the diference.
5.Inclusivity. Te Center-Right Coalition must invest in reaching out to nontraditional target groups. Free
market ideas serve everyone far better than those from the Progressive Coalition. Te center-right must
invest in making that case in a way that is genuine and consumable. Do this and voters will come.
6.Itisaboutculture,notjustpolitics. Progressives work daily to change cultural attitudes toward issues
in a way that makes their political solutions more palatable.
A perfect example is the January 2011 income tax hike that was supposed to be temporary by sunsetting at
the end of 2014. Te Progressive Coalition began a cultural campaign to make the tax hike permanent since
the day it passed. Te Center-Right Coalition must do a better job of representing its ideas and infuencing
narratives in nonpolitical, culturally appealing ways.
We must absorb these lessons, but we must not take the wrong lessons, either. In 2008, Wisconsin, Ohio, Michigan,
Pennsylvania, Florida and others all went solidly for Obama. Two years later, every one of these states turned red or
redder. It is the work we do tomorrow, next week and in the months to come that will determine our destiny not
the disappointing results of 2012.
8 | COMPASS | WINTER 2012
Remember that I have power You are
my creator, but I am your master; obey!
-Te Frankenstein monster in Mary Shelleys Frankenstein
Today, Illinois is dealing with its own version of
Frankensteins monster. Like the idealistic scientist
Victor Frankenstein, the Illinois General Assembly
meant well when it created and empowered government
employee unions. Just as the scientist in Mary Shelleys
novel created a monster by defying the laws of nature,
however, our lawmakers trifed with fundamental rights
and principles of government and created all-powerful
unions that prevent much-needed reforms.
In the book unlike many movie versions the
monster turned on its creator, menacing and eventually
delivering an ultimatum to the doctor who brought it to
life. Likewise, government unions ofen have managed
to dominate state and local governments, making wage
and beneft demands that have become more and more
unafordable.
Illinois labor law created union monster
by Paul Kersey - Director of Labor Policy
WINTER 2012 | COMPASS | 9
Government unions have become powerful because
they have a monopoly on the workers hired to enforce
laws, teach in public schools, run public transportation
and many other state and local government services.
Workers must accept unions as their representative,
and public ofcials must negotiate with union ofcials
over how government will function and how much it
costs. Government union ofcials have made the most
of the leverage the state has given them by negotiating
expensive contracts that dont improve the efectiveness
of the services they provide.
At the same time, government ofcials guarantee that
unions receive millions of dollars under the guise of
membership dues and agency fees unions collect
these guaranteed funds with no questions asked. Union
ofcials have used that power to build a dominant
political machine. No other interest group in Illinois has
a built-in money advantage like government employee
unions.
A few months ago, Chicago Mayor Rahm Emanuel
confronted the militant Chicago Teachers Union, or
CTU, that demanded 30 percent raises and watered-
down evaluations on pain of strike.
When negotiations between the school district and
CTU became stagnant, the team at the Illinois Policy
Institute reported how out of line union demands were
with the fscal and educational reality in Chicago.
When CTU walked, Institute staf challenged the
conventional wisdom about teacher bargaining,
reminding the media and the public of the $1 billion
budget defcit that the district faces in the 2013-14
school year, a fnancial hole that should have made
pay raises out of the question. Te Institute challenged
the unions excuses for poor academic performance,
calling for a stronger evaluation process. Te Institute
also pointed out that, under state law, it is illegal for
the union to strike over evaluations or the rehiring of
laid-of teachers, two topics that fgured prominently
in the unions demands. Te Institute made sure that
newspapers and television networks understood that
the strike was illegal and why, securing more than 200
news appearances within a three-week span with media
outlets like Te Wall Street Journal, NPR, Fox News
Channel and Univision.
10 | COMPASS | WINTER 2012
In the end, Emanuel made big concessions: teachers got
hefy, across-the-board pay hikes, and evaluations are
as weak as state law allows for and include loopholes
that the union will be able to manipulate to protect
inefective teachers. When the contract was announced,
the Institute explained why the deal would do little
to improve public education and is bound to lead to
layofs. But as bad as the deal was, there was a silver
lining: Emanual could and should promote charter
schools and vouchers to give parents more choices.
And the day afer public schools in Chicago reopened,
a guest column in the Chicago Tribune, coauthored
by Institute CEO John Tillman and Director of Labor
Policy Paul Kersey, made the case for a revamped
labor law that restores freedom, the thing that scares
government union bosses most of all.
Illinois labor law makes unions powerful and at the
same time unaccountable to the public. Tis is why
they can intimidate so many of our elected ofcials.
Right now, Gov. Pat Quinn could have state retirees
pay more for their health care, a move that would save
taxpayers more than $1 million a day. He shouldnt
need the unions permission to make this move state
law specifcally gives his ofce the responsibility to set
rates for state retiree health insurance but he hasnt
up to now because he fears a state employee strike and
the loss of union support in the 2014 gubernatorial
election. Te American Federation of State, County
and Municipal Employees not the General Assembly,
the courts or the public is blocking changes that
would improve the states fnances and provide relief to
taxpayers. Te union has become monster and master.
Frankenstein was story with a moral: it is dangerous
to trife with life. Likewise, the story of unions in
Illinois has its own moral: lawmakers should not
trife with the fundamental principles on which
America was founded. In the American tradition of
government, individuals have the right to speak for
themselves and associate with others at their own
discretion; but under Illinois labor law, workers are
forced to accept the representation of a union that
may not respect their individual values and interests.
Government is supposed to be accountable to the
public and nobody else, but under Illinois state labor
laws elected ofcials are forced to bargain with unions
over basic governmental decisions, such as how to spend
public money or how public employees are expected to
perform their jobs.
Te Institute exists to defend the basic principles of
sound, limited government. Te state of Illinois has
violated the principles of individual freedom and public
accountability, and in the process created a government
union monster that threatens to bankrupt the state. Te
Institute calls for a new labor law that respects the rights
of individual workers and leaves the public in control of
government.
Te Institute has already begun to alert the public to
the monstrosity that government unions have become,
and shown them what it will take to regain control of
their government: an end to guaranteed union dues,
more individual freedom for government employees
and changes to the bargaining process that will ensure
that any contracts that are signed are in the publics best
interest, not just the union bosses.
Watch Roadblock to Reform at youtube.com/illinoispolicy
WINTER 2012 | COMPASS | 11
Its no secret that Illinois lawmakers have done a good
job of feathering their own retirement nests at the
expense of Illinois taxpayers.
In fact, a number of former lawmakers have six-fgure
pensions.
But what about the most famous living alum of the
Illinois Legislature President Barack Obama?
He served only seven years in the Legislature before
moving on, but his stint in Springfeld proved to be a
lucrative addition to his retirement plan.
If the president had served as a rank-and-fle state
worker instead of a state legislator, however, he wouldnt
receive a pension at all. Regular state workers must
work a minimum of eight years before theyre eligible to
receive a pension.
But Illinois lawmakers created diferent rules for
themselves. Only four years of service in the Legislature
is required for lawmakers to retire at age 62. And they
can retire at age 55 if they have eight years of service in
the General Assembly.
Obamas service as an Illinois state senator is estimated
to earn him a $15,270 annual pension if he retires at age
62. His initial monthly beneft would be $1,272.
To put this in perspective, a man or woman buying
an annuity would need $332,091 in cash at the same
retirement age to yield the same annual income as
Obamas estimated state pension.
Afer accounting for a 3 percent annual compounded
cost-of-living-adjustment and an average life
expectancy, Obama could be in line to receive a lifetime
pension payout of $383,535.
Where else would you be able to get a pension like that
for a part-time job that you only held for seven years?
said Frank Keegan, editor of State Budget Solutions. I
would challenge anyone to fnd any state worker getting
that good of a deal.
Members of the Illinois General Assembly Retirement
System, or GARS, contribute 11.5 percent of their salary
to the pension system. Te estimated total amount
Obama would have contributed as an employee toward
his pension is $55,076.
Tis is absolutely ridiculous, said Kristina Rasmussen,
executive vice president of the Illinois Policy Institute.
He could get a far greater return than someone in the
private sector could ever expect to receive. And if he
had worked as an ordinary state worker he wouldnt
have been eligible for a dime in pension payments.
Te pension estimates were calculated using the
Illinois Policy Institutes online pension calculator at
illinoispolicy.org.
Tis year, Illinois taxpayers will contribute $14.15
million to GARS. Under new accounting rules from
Moodys Investors Service, the Illinois Legislatures
pension system is only 13-percent funded.
In addition to the pension, Obama is eligible for free
retiree health care funded by Illinois taxpayers afer
having served four years in ofce.
Illinois state legislators arent just cheating the system
theyve created a system that cheats Illinois.
To subscribe to the Reeder Report, a twice-a-week e-letter that
provides insight and perspective to policy and political insiders, visit
reederreport.com
by Scott Reeder - Journalist in Residence
Lawmakers play by their own set of pension rules
12 | COMPASS | WINTER 2012
Fending off the next big bailout: state pensions
No one saw the Troubled Asset Relief Program, auto
or housing bailouts coming. Congress, in crisis mode,
forced through these ill-fated bills, with no real time
for debate or refection. Te result was the creation of
some of the most destructive policies our country has
ever seen.
To stem the tide of the bailout culture, the Illinois Policy
Institute is attempting to fend of the next potential
federal bailout: states and their nearly bankrupt pension
systems. Te Institute launched its No Pension Bailout
project in September, with Sen. Jim DeMint, R-S.C., at
its side, to prevent the federal government from bailing
out states that have mismanaged their funds.
Across the country, state pension funds are dramatically
underfunded. Recent calculations put the value of
unfunded pension obligations at $2.5 trillion and
possibly as high as $4 trillion. Tats more than one-
sixth of the entire U.S. economy and more than all taxes
paid to the federal government last year.
Sadly, the past few years have shown what happens when
large institutions face big challenges. When institutions
are deemed too big to fail, the federal government feels
the need to swoop in and bail them out if times get
tough. Witness the billions poured into General Motors
Co., American International Group Inc., Fannie Mae,
Freddie Mac and the rest of the banking sector.
Teres already movement afoot for the next big bailout.
In his fscal year 2012 budget, Gov. Pat Quinn said that
signifcant long-term improvements to the states
pension debt would come from, among other things,
a federal guarantee of the debt. According to his
budget director at the time, Quinn also met with
Treasury Secretary Tim Geithner and other White
by Ted Dabrowski -Vice President of Policy
Sen. Jim DeMint, R-S.C.
Watch the no Pension Bailout press conference with sen. Jim DeMint at youtube.com/illinoispolicy
WINTER 2012 | COMPASS | 13
House ofcials in 2009 to secure federal backing for $14
billion in pension obligation bonds.
Quinn is not alone. Earlier this year, Rep. Hansen Clarke,
D-Mich., introduced a bill to Congress that sought
half a billion dollars in federal loans to solve Detroits
fnancial crisis and underfunded pension program.
We cannot let a federal bailout of state debt become the
next sudden crisis. Until a federal bailout is completely
of the table, state and local governments will continue
to delay the structural spending reforms so critical to
their states long-term fscal health.
Te No Pension Bailout project raises awareness
about the risks of another bailout and partners with
organizations around the country to stop this idea in its
tracks. Te Institute held a national press conference in
Washington, D.C., joined by DeMint, state lawmakers
and experts from the Cato Institute, the American
Legislative Exchange Council, State Budget Solutions
and Te Heritage Foundation. Te Institute also worked
closely with the staf of the bicameral Joint Economic
Committee in its eforts to prevent a federal bailout of
state debt.
Te project has been covered by Te Wall Street
Journal, Fox Business, Fox News Channel and many
other media outlets across the country. Te No Pension
Bailout project was featured in the news more than
43 times since its launch in August. Te Institute also
authored an 80-page study analyzing the impact of a
federal bailout of state pension debt and launched www.
NoPensionBailout.com, which allows users to control
an interactive bailout simulation to see how taxpayers
in more fscally responsible states will bear the brunt of
any bailouts costs.
As long as state and local government think a federal
bailout is an option, they will continue to delay making
the structural reforms they so desperately need. Te
Institute will continue to work nationwide with its allies
and partners to end the talk of bailouts and get states
back on track toward serious spending reforms.
Nowhere are these reforms needed more than in Illinois.
Quinn must reject the notion of a bailout immediately
and get to work on enacting real reforms Illinois cant
aford to wait until crisis mode sets in.
14 | COMPASS | WINTER 2012
Liberty Justice Center continues fight for liberty in Illinois
by Diane Cohen - General Counsel, Liberty Justice Center
Te Liberty Justice Center, or LJC, is entering its
second year of operation, continuing its mission of
defending liberty and the rights secured by the Illinois
and United States Constitutions. LJC provides free
legal representation to those whose constitutional
rights have been violated by government and overreach
by bureaucrats. LJC is a project of the Illinois Policy
Institute and supports the Institutes vision to make
Illinois frst in economic outlook and job creation and
a free enterprise leader for the rest of America. LJC
pursues cases that advance freedom and create broadly
applicable precedents.
Two of our cases, Beavers Donuts v. city of Evanston
and Julie Crowe v. city of Bloomington, seek to advance
economic liberty by vindicating the rights of Illinois
entrepreneurs to earn a living. LJC joined with James
Nuccio and Gabriel Wiesen of Beavers Donuts to fle
a lawsuit challenging a city of Evanston ordinance that
bans them from operating a food truck in the city solely
because they do not own a brick and mortar restaurant
in Evanston. So far, the city has provided no health or
View all of our cases at libertyjusticecenter.org. Before submitting a case for review, visit libertyjusticecenter.org
and click Cases to see if the case fts LJCs parameters. If it does, email the details and relevant contact information
to info@libertyjusticecenter.org. Send mail inquiries to Case Inquiries at the Liberty Justice Center, 190 S. LaSalle
St., Suite 1630, Chicago, Illinois 60603.
Liviv1v JUs1ici Ci1iv
safety justifcation for this ban and has fled a motion
to dismiss the case. Tis motion is being briefed and is
currently pending in Cook County Circuit Court.
We also continue to work on behalf of Bloomington
resident Julie Crowe, a would-be entrepreneur who
wishes to start a specialized vehicle-for-hire catering
service. Bloomingtons city manager has blocked
Crowes business because the added competition was
deemed not to be in the public interest. Tis case is in
the discovery stage and LJC will be moving toward fling
a motion for summary judgment that seeks to strike
down the citys unconstitutional policies and practices
in the next several months.
LJCs fght against Illinois unconstitutional campaign
fnance law also continues in the U.S. District Court
in Chicago. While LJC did not prevail in its eforts to
gain emergency relief in advance of the November 2012
election, this case will continue in the trial court in the
coming months.
WINTER 2012 | COMPASS | 15
Chicago charter schools top list of best performers
by Josh Dwyer - Director of Education Reform
When the Chicago Teachers Union went on strike,
many parents of public school students had to scramble
to fnd a safe place for their children to stay during
what would otherwise be a regular school day. Some
parents took time of work, even at the risk of losing
their jobs. For about two weeks, students missed class
and extracurricular activities, losing momentum and
valuable learning time.
But in Chicagos charter schools, class continued as
normal, and teachers continued working with parents
to ensure student success. Schools were exceeding
expectations, posting gains in reading and math scores.
Teachers were not striking, even though they worked
longer hours for less pay. Here, everything was calm;
hopeful, even.
Chicagos charter high schools are a welcome change
from the typical Chicago Public School story of
schools struggling to meet minimal standards and
teachers complaining about intrusive administrators,
performance evaluations and so-called lackluster pay.
In fact, charter high schools in the city have on average
outperformed their public counterparts.
A recent report of 2012 ACT test scores created by the
Illinois Policy Institute found that charter schools held
the top nine spots for open-enrollment, non-selective
public high schools in Chicago.
In addition, the report showed that charter schools have
been outperforming their public school peers on the
ACT for the past fve years increasing their scores by
17 percent while traditional schools gained less than a
5 percent boost.
Charter schools ofer a real alternative for Chicagos
children. Tis is why the Institute supports abolishing
the charter school cap which arbitrarily limits the
amount of charter schools that are allowed to open in
the state and has urged Chicago to use charter schools
in their school turnaround process.
Charter schools prove that ofering school choice
not only improves the overall school system, but also
students chances for success.
17.7
20.5
19.9
18.8
18.6
17.2
17.5*
17.5
2007 2008 2009 2010 2011 2012
16.0
17.0
18.0
19.0
20.0
21.0
Top 10 charters
Top 10 traditional schools
17.4
18.0
17.7
18.5
Top 10 charters outperform top 10 open-enrollment, non-selective, traditional high schools in Chicago
Average of ACT composite scores: 2007-2012
Source: Chicago Public Schools Strategy, Research, and Accountability Ofce, www.cps.edu/SchoolData/Pages/SchoolData.aspx, Illinois Policy Institute
*Scores from only eight charter schools were available in 2007
16 | COMPASS | WINTER 2012
Gov. Pat Quinn is cooking up another multibillion
-dollar tax hike for Illinois a progressive income tax.
Lawmakers already took an additional $1,500 from
Illinois families shrinking budgets with a record 67
percent income tax hike in 2011. But this money
grab wasnt enough to satisfy Springfelds addiction
to spending, which is up 85 percent per capita afer
infation since 1990.
Advocates for the progressive tax sell it as a fair tax,
which will only afect the rich. But this couldnt be
further from the truth. Tese myths have muddied the
water surrounding the real issues behind the progressive
tax.
Te Illinois Policy Institute is working to set the record
straight.
Te union-funded Center for Tax and Budget
Accountability is distributing a progressive tax plan
that would increase taxes on 85 percent of hardworking
taxpayers in Illinois; it would destroy a minimum of
65,000 jobs; it would hit the middle class; and it would
exaggerate future swings in revenues, leading to more
defcits and nearly impossible budget planning.
Perhaps the most disconcerting fact about the
progressive tax is that its discriminatory. It taxes
success and hard work, penalizing everyone from
an entrepreneur working her way out of her parents
home to parents working extra jobs to pay for their
childrens education to out-of-state businessmen whose
investments could create jobs in Illinois.
Illinois has a spending problem it doesnt need another
tax hike to chase away more businesses and residents.
When new businesses are stifed by high taxes and over-
regulation, job growth sufers.
New analysis by the Illinois Policy Institute confrms
this fact, and proves that the creation of healthy new
businesses is the key to more jobs in Illinois.
Net company migrations into the state and the expansion
and contraction of existing companies matter when it
comes to job growth, but these factors are secondary to
the infuence of business births and deaths.
Te numbers speak for themselves from 1995 to 2009,
Illinois ranked 50th in the nation in total job creation
and 48th in the nation in total job creation from new
business. In fact, the state lost jobs during this period,
which happened in only six other states.
While Illinoisans were being crushed by these job
losses, lawmakers across the state were busy courting
big companies like CME Group Inc. and Sears Holdings
Corp., which received hundreds of millions of dollars in
tax breaks just to stay in Illinois.
Te studys data show that Illinois total job growth
is highly correlated with how well Illinois fosters the
creation of new companies and how well it provides
an economic environment that promotes profts and
success. Illinois must revitalize its toxic business
environment and embrace a reform agenda that lowers
taxes, reduces regulation and burdensome red tape,
ends corporate favoritism and restores Illinois fscal
order.
Illinois needs a new sweetheart deal one for all job
creators.
by Ted Dabrowski -Vice President of Policy
Theres nothing fair about
a progressive tax
Fostering creation of new companies
is key to job growth
Policy&impactupdate
by Ted Dabrowski -Vice President of Policy
WINTER 2012 | COMPASS | 17
Without good information, citizens cannot engage
efectively with their government.
Why does this matter? Without engaged citizens,
government ofcials can carry out their agendas
unchecked.
Tats why the Illinois Policy Institute conducted the
Local Transparency Project, which included a website
audit of 79 out of Illinois 102 county governments.
By state law, local government entities in Illinois that
maintain a website are required to post a meeting
calendar, agendas, minutes of past meetings and
information on fling a Freedom of Information Act, or
FOIA, request on the site.
However, the Institute found that an alarming number
of Illinois counties are violating state laws.
Te Institute found that:
43 percent of the counties investigated were not in
compliance with the Open Meetings Act, or OMA
54 percent were not in compliance with the Freedom
of Information Act
62 percent were in violation of either OMA or FOIA
website transparency laws
Unfortunately, there is very little recourse for citizens
to compel counties to comply with OMA and FOIA
website transparency laws. Citizens can fle a complaint
with the public access counselor at the Illinois Attorney
Generals ofce, but this ofce acts more as an informal
educational ofce rather than one that actually demands
compliance with state law.
Without accurate, complete information, citizens
cannot fully engage with government. And when
lef unchecked, Illinois politicians are free to practice
a culture of wasteful spending, ignore their core
government responsibilities and engage in corruption.
Illinoisans have a right to transparent government.
62% of counties violating web transparency laws
by Brian Costin - Director of Government Reform
When left unchecked, Illinois politicians are free to practice a culture of wasteful
spending, ignore their core government responsibilities and engage in corruption.
18 | COMPASS | WINTER 2012
New Piglet book highlights culture of wasteful spending
by Ben VanMetre - Senior Budget and Tax Policy Analyst
Te 2012 Illinois Piglet Book highlights nearly 200
examples of wasteful government spending throughout
the state. Each item stems from the decisions of
politicians who have lost sight of the core government
services they were put in place to maintain.
Illinoisans will be better of when leaders end the states
corrosive culture of out-of-control spending. Its time
for government ofcials to cut the waste and begin
respecting taxpayers and their money.
Just how bad is this spending problem? Some of the
most egregious expenditures are shocking.
From $9,941 for Speedy-the-Turtle bobbleheads to
$200,000 for customized, eco-friendly zip lines, Piglet
2012 highlights some wasteful spending that may seem
humorous. But then theres a $2,261,009 cable TV bill
taxpayers paid for prison inmates to get their weekly
fll of Seacrest and Snooki. And yes, we checked, MTV
made the long list of TV channels that prisons provide.
Other favorites include CMT, Fox Sports, ESPN, BET,
the Home Shopping Network, Speed and Spike TV.
In another example, Illinois actually broadcasts its
wasteful government spending. Between 2011 and 2012
the state spent $16 million on advertisements, which
included paying the Chicago Yachting Association
$3,200 for a full-page advertisement to promote North
Point Marina and spending $18,000 with Radio Disney
Group to promote select performances, including a
Selena Gomez show, at the state fair.
And Illinois governments are willing to shell out
thousands of dollars for other barnyard fun, too.
Perhaps some of the most outrageous waste in Illinois
occurs at the local level, where Rock Island County paid
$20,489 to Swine-time Pig Racing and spent $19,678 on
carousel ride reimbursements.
piglet 2012
Rock Island County spent $1,101 on lipstick tubes.
read The 2012 Illinois Piglet Book at illinoispolicy.org/piglet
Te 2012 Illinois Piglet Book was produced by the Illinois Policy
Institute in conjunction with Citizens Against Government Waste.
FALL 2012 | COMPASS | 19
And some local park districts in Illinois are just giving
away taxpayer money. Te Chicago Ridge Park District
spent $18,444 on giveaways, which included beach balls,
chip clips, pinwheels, tote bags and fyswatters.
Other examples of waste in Piglet 2012 come in the
form of grants, subsidies and special tax treatment for
businesses, along with handouts for nonprofts and
associations.
When the government gives millions of taxpayer dollars
to MillerCoors and Boeing Co. for relocation, and
thousands of taxpayer dollars to AT&T Inc. and Navistar
International Corp. to train employees, the logic ofered
up is that this transfer of resources promotes a skilled
labor force and greater business activity.
But the story thats rarely told is that to fund this
corporate favoritism, the state must take money from
families, corporations, small businesses and struggling
entrepreneurs. Tat weighs down investment and
growth, resulting in fewer startups, lost economic
output and reduced job creation. Tats real waste.
Te Illinois Policy Institute believes the role of
government is to promote economic freedom and
individual liberty. Freedom and liberty are unduly
infringed upon when the state taxes families and
businesses to send the spoils to frivolous programs,
special interest groups and businesses with lobbyists.
State ofcials in Illinois must end the culture of habitual
overspending, eliminate waste and return focus to
providing core government services.
Its time to cut the crap.
9 5 2
Te Illinois Department of Commerce and Economic Opportunity
gave a $200,000 grant to Shawnee Blufs Canopy Tour Inc. to build
eco-friendly, customized zip lines.
Rock Island County paid $20,489 to Swine-time Pig Racing.
Watch the Piglet 2012 video series at youtube.com/illinoispolicy
Read the book. See the zipline pig. See the prison pig.
20 | COMPASS | WINTER 2012
who should pay?
by Diana Rickert - Director of Media Relations
At several stops on the Illinois Policy Institutes summer
debate tour, the program opened with the following
question to audience members: How many of you think
Illinois politicians are honest and keep the promises
they make?
Unsurprisingly, few hands rose. Yet in Illinois, politicians
are entrusted to oversee the retirement security of
hardworking and dedicated teachers. Illinois politicians
have demonstrated they are the last people who should
be in the retirement business and theres a way to
start taking away politicians power over pensions: local
pension accountability.
In the private sector, both employer and employee make
contributions toward Social Security. In city, county
and almost every other level of Illinois government,
a similar arrangement is in place; the employer
(taxpayers, via government) pays an employer share
toward government worker pensions, and the worker
makes an employee contribution. But thats not how it
works in Illinois public education.
In nearly two-thirds of Illinois K-12 school districts,
teachers pay little to nothing toward their own
retirement. Instead, the employer (taxpayers, via school
districts) pays the employee contribution toward
retirement savings. Ten, when it comes to the employer
(school district) share, the state picks up the tab.
What results is an accountability gap. Local school
districts set salaries and pensions and then give the
bill to the state. Te governments making spending
decisions are not held accountable for the costs.
In April, Gov. Pat Quinn proposed ending the states
practice of paying the employer share of teachers
pensions on behalf of local school districts. Quinns
proposal is similar but not identical to a March
proposal by the Institute called local pension
accountability.
However, during the spring legislative session, pension
reform came to a standstill over this issue. School
district ofcials claimed it would result in program
Teacher
retirement:
WINTER 2012 | COMPASS | 21
cancellations, increased class sizes, property tax
increases or even destroy public education. Tese are
myths. Here is the truth:
Te average cost to school districts in Illinois for picking
up the employer share of pensions is just 3.7 percent
of total expenditures.
Teachers in two-thirds of Illinois school districts pay
little to nothing toward their own retirement. Instead,
the school districts pay the employee share of
retirement savings.
If school districts stopped paying the employee share,
and instead started paying the employer share, then 468
out of 866 school districts would see cost savings.
To educate the public about this issue and why it is a
necessary component of comprehensive pension reform,
the Institute hosted an eight-stop debate series across
the state called the Local Pension Accountability Tour.
Te debates focused on the question of who should pay
the employer share of teachers pensions: local school
districts or the state.
Te Institute held debates in Springfeld, Carbondale,
Quincy, Lemont, Decatur, Crystal Lake, Skokie and
Rockford. Local legislators, civic leaders and members
of the news media moderated the debates. Institute
pension experts appeared opposite representatives from
local school boards, and representatives from the Illinois
Education Association and the Illinois Federation of
Teachers.
Hundreds of engaged citizens attended the debates, and
each stop received signifcant coverage in local media.
Te Institutes debate series provided a home to much-
needed debate about the issue. But most important,
the conversation changed many minds about how to
implement transformative pension reform that will put
Illinois on the path to leading the nation in economic
performance.
Te Illinois Policy Institutes Diana Rickert talks with TV reporters about pension reform afer the Institutes Local Pension Accountability
Tour stop in Rockford.
22 | COMPASS | WINTER 2012
Institute events
Whos counting?
A cocktail hour with John Fund
On Sept. 25 the Illinois Policy Institute and Citizens for Responsible
Government hosted John Fund, a columnist for National Review
magazine and a frequent contributor to Fox News Channel. Fund
discussed his most recent book, Whos Counting?, which focuses on
many problems of Americas election system, ranging from voter fraud
to a slipshod system of vote counting that noted political scientist Walter
Dean Burnham calls the most careless of the developed world.
Whos
Counting?
How Fraudsters and Bureaucrats
Put Your Vote at Risk 09.25.12
On Oct. 1, the Institute hosted Yaron
Brook, president of the Ayn Rand Institute.
Brook argued that the reason government
intervention increases is a set of prevalent
and deeply entrenched cultural ideas
specifcally moral ideas. He also spoke about
his new book, Ayn Rands growing popularity
and how Rands ideas can help transform
states like Illinois.
Photos: Mark campbell creative
Free Market Revolution: Yaron Brook discusses new book
WINTER 2012 | COMPASS | 23
Watch the In Black and White: Yaron Brook video at youtube.com/illinoispolicy
Free Market Revolution: Yaron Brook discusses new book
24 | COMPASS | WINTER 2012
Tax Competition and 4% Growth:
What the Midwest Can Show the Rest of the Country
On Sept. 18 the Illinois Policy Institute partnered
with the George W. Bush Institute to host a day-long
conference discussing how diferent tax rates afect
business behavior and why low-tax states are growing
while high-tax states are stagnating.
Te event featured academics, elected ofcials and
business leaders who shared the theory behind tax
competition and their experiences working with
diferent tax environments.
Presenters included:
Indiana Gov. Mitch Daniels
Margaret Spellings, president, U.S. Forum for
Policy Innovation, former U.S. Secretary of
Education
Jimmy John Liautaud, CEO and founder, Jimmy
Johns Gourmet Sandwich Shops
Bruce Rauner, chairman, GTCR LLC
James Glassman, founding executive director,
George W. Bush Institute
David Booth, co-CEO and chairman, Dimensional
Fund Advisors
Edward Lazear, Jack Steele Parker Professor of
Human Resources Management and Economics,
Stanford Graduate School of Business
John Cochrane, AQR Capital Management
Distinguished Service Professor of Finance, Te
University of Chicago Booth School of Business
Congressman Aaron Schock, R-Ill.
Brian Wesbury, chief economist, First Trust
Advisors LP
Michael Hicks, director, Center for Business and
Economic Research
William Little, president and CEO, Quam-Nichols
Co.
Amity Shlaes, director, 4% Growth Project, George
W. Bush Institute
Byron Trott, chairman and CEO, BDT Capital
Partners
Photos: Mark campbell creative
Institute events
Watch Gov. Daniels keynote address at youtube.com/illinoispolicy
WINTER 2012 | COMPASS | 25
On Nov. 6 the Illinois Policy Institute celebrated 10 years of promoting
economic freedom and individual liberty in Illinois with an election night
watch party. Institute staf were joined by more than 200 supporters and friends.
Tax Competition and 4% Growth:
What the Midwest Can Show the Rest of the Country
1
0 years
Photos: Mark campbell creative
Watch The Fight for Freedom at youtube.com/illinoispolicy
26 | COMPASS | WINTER 2012
Digital outreach expands impact of liberty movement
In the beginning of a change, the patriot is a scarce
man, and brave, and hated and scorned. When his cause
succeeds, the timid join him, for then it costs nothing to
be a patriot. Mark Twain
We ofen hear stories from Illinoisans who fnd comfort
in knowing others are working to advance liberty in our
state some are shocked to learn such a community
exists.
Digital innovations continue to change how members of
the growing liberty movement engage with each other
and the Illinois Policy Institute. We are committed to
developing an ecosystem that accelerates the growth of
our community and allows you to quickly and easily
consume and share information with your friends,
family and elected ofcials.
As part of these eforts, we are launching a
redesigned www.illinoispolicy.org and will be
expanding our social media eforts, which currently
include Facebook, Twitter, YouTube and Google+.
We will also continue to ofer our weekly eCompass
newsletter to provide breaking news and an insider look
at whats happening in Springfeld and throughout the
state.
Tese are just a few of the ways were working to better
serve you. We look forward to staying in touch online
and connecting with you in person at our next event.
A message from the Illinois Policy Institute
WINTER 2012 | COMPASS | 27
Staf spotlight: John Knowles, Vice President of External Relations
John Knowles learned the ins and outs of fundraising as chief of staf to the House Minority Whipof theMichiganHouse
of Representatives, and applies his love of history and the free market to his work at the Illinois Policy Institute.
Q:YoulivedandworkedinFloridaformorethanthreeyears.Whatweresomeoftheperks?
A: A lot of the people there have the freedom to choose to live anywhere and they choose Florida. Teres a
reason for that. One is the climate, but another is that the leaders in Florida have shown wisdom in employing a
lot of the policies the Illinois Policy Institute supports in terms of low taxation, restrained government and a pro-
business environment.
Florida is evidence of why these policies are successful. Its economy is booming. Its population has increased. Its
not without its challenges, but it generally does better than the rest of the country.
Q:Whatdoyouthinkourcountryneedsmost?
A:What I think is really special about the United States is that we tell people if theyre industrious and have high
integrity they can be and do whatever they want. Tats a great promise. At some point along the line, that promise
was warped and manipulated into something very diferent a guarantee of wealth or some certain lifestyle and
I think that was a terrible mistake. Im fearful that our original notion might be in its fnal generation.
Q:CanyoudescribeyourinteractionswithInstitutesupporters?
A:What unites Institute supporters is that while they come from widely varying backgrounds and perspectives,
they all believe that Illinois can be saved. Our supporters tend to be the ones who are inherently optimistic, mostly
because theyre successful and they know what its like not to start out that way. Teyve lived lives of aspiration,
endurance and fortitude, and theyve had a lot of success, so they believe nothing is impossible. Tats a great group
to be around.
Te Illinois Policy Institute measures its success on impact and change. Developing and sharing outstanding lib-
erty solutions are crucial frst steps and a major part of what we do. We are only satisfed, however, when our ideas
translate into real, practical policy solutions that, upon adoption, make Illinois the best state in America for people
to live and prosper.
Our pursuit of this vision is only possible because of your support and we cannot thank you enough. Because of
your decision to invest in our work, the freedom agenda in Illinois is stronger than ever before. Te impact of
your donation has been felt through the media, in the halls of the Statehouse, and throughout our states political
establishment.
Tis commitment to return value to you in the form of real progress for the cause we both love will not waver at
all throughout 2013 and beyond. As you know, there is much more to be done. We are just getting started, and the
best is yet to come.
Photos: Mark campbell creative
TWITTer.coM/IllInoIsPolIcy FACEBOOK.COM/ILLINOISPOLICY youTuBe.coM/IllInoIsPolIcy
With your help, we can translate ideas into solutions
by John Knowles - Vice President of External Relations