I’m stealing the line from Rich’s Headline a while ago, but Alexi Giannoulias has been an incredibly pleasant surprise for his performance so far.
He finally put to bed the damn hotel deal. He has worked hard on Bright Start—Fritchey covered this as well.
And today, he pushes back against the Governor’s really stupid idea.
But more than that, he’s been playing well with others generally (I think we can rack up the disagreement with Blagojevich as such since everyone, but the Governor is against the idea).
I was critical of Alexi during the campaign and given what I knew at the time, I wouldn’t change that. At the same time, all of that is irrelevant now and the question is can he perform and by all early indications, he can and he is.
Here’s his statement from the Appropriations Committee:
Thank you Chairman Davis and members of the Appropriation Committee.
Since being sworn in as the Illinois State Treasurer I have made it my top priority to put the interests of taxpayers first. On my first full day in office I signed an executive order to put an end to pay to play politics in the Treasurer’s office. I will no longer accept campaign contributions from anyone doing business with my office, including banks. Employees are now prohibited from lobbying our office for two years after they leave, and me and my staff will no longer accept any gifts from lobbyists, regardless of value. These reforms are a necessary step to reform the process and restore the public’s trust in government.
I have enacted these reforms in the Office of the Treasurer and chosen to lead by example. Additionally, I call on the members of the General Assembly to be our partner in this effort and lead by decree. Last week I testified before the House State Government Committee in support of House Bill 1, sponsored by Representative Fritchey. House Bill 1 would end pay to play politics by applying these same reforms to all constitutional offices. The members of the General Assembly have the opportunity to put an end to the corrosive cycle of campaign contributions and insider deals and I ask for your support.
In the short time that I have been in office I have become all too familiar with the long-term cost of insider deals. In the 1980’s the State entered into mortgage agreements for property investments in Illinois. To this day, two of those loans remain outstanding, including the Abraham Lincoln Hotel right here in Springfield. Each was made to a group of investors that included political power brokers, and these borrowers were able to renegotiate their deals several times. In each instance the renegotiated terms were more favorable to the borrowers and less favorable to the taxpayers. Now both loans are in default and the State is owed almost $60 million. Since I took office our attorneys have had an independent receiver appointed to oversee the two hotels so that these borrowers will no longer receive any financial benefit from the operation of these two properties. Now our attorneys are working to foreclose on the properties so that we may sell them at auction and recover some of our lost money. However even under the best possible circumstances we will recover only a fraction of what is owed. This episode demonstrates once again that the use of taxpayer money must be based on sound business decisions and not on political influence.
One area where my office has worked with business and industry leaders to improve state government is with the Bright Start college savings program. Bright Start is a qualified 529 college savings plan that allows working families to save for college in a tax-free account. I spoke extensively during my campaign about the need to reform a program whose fees were too high and whose investment options were too limited. I assembled a team of advisors made up of investment professionals to help us evaluate the bidders for our new Bright Start contract. The result is that the State of Illinois will now offer a plan with fees among the lowest of any state in the country and we have expanded the investment options to include index funds and international funds. Additionally we were able to get our vendor to commit to providing $3.5 million over the next seven years in scholarship money for Illinois students. Now working families in Illinois can save for college and invest in their children’s future with the confidence that their investment will realize its full potential.
But that is not the only change that we have sought for Bright Start. I recently testified before the House Financial Institutions Committee in support of House Bill 376 sponsored by Representative Franks. Currently Illinois is one of only two states that taxes its citizens on investments in out-of-state college savings programs. House Bill 376 would eliminate that tax penalty. While I certainly hope that all Illinois families that are saving for college choose to invest in our Bright Start college savings program, the success or failure of our program should depend on its performance and Illinois families should have the opportunity to choose the plan that is right for them. I call on the members of the General Assembly to lift the tax penalty for out-of-state college savings plans and I am confident that our program will be successful on its merits. I ask you for your support.
As the State’s Treasurer I am the State’s chief investment officer. Our office is responsible for investing over $13 billion. I view the taxpayers of Illinois as shareholders in our $13 billion corporation and shareholders expect to be able to see how their money is performing. I have directed our investment policy committee to include benchmark and forecasting information and to and to make current and historical data available on the Treasurer’s office website. Illinois taxpayers should have the opportunity to evaluate our office’s performance against historical data, against our benchmarks and against our future expected returns. I believe very strongly in the importance of transparency and I have asked the General Assembly to codify this policy by statute. I ask for your support for House Bill 824, sponsored by Representative Phelps. House Bill 824 is the Treasurer’s Office Investment Transparency bill. The bill would require that our office, and any subsequent State Treasurer, publish a monthly report on the internet including the total funds held by the State Treasurer, the asset allocation and the historical and benchmark data for each type of investment. I believe that taxpayers have a right to know how the state is investing their money and I ask you for your support.
We are also exploring ways to increase the state’s return on investment. I intend to extend the state’s investment portfolio to include securities lending, a type of investing that allows us to leverage the notes that we carry for a better rate of return.
But the most important investment that our office makes is to invest in the people of Illinois. My office provides the Our Home Loan program, where we guarantee up to 10% of the mortgage for qualifying home buyers. These loans allow borrowers to purchase their homes with traditional mortgages for those who otherwise wouldn’t qualify and keeps them out of the web of the predatory lenders. Just recently our office invested in 17 federally-designated low income credit unions. These non-profit community organizations provide small dollar loans, typically only a few hundred dollars, to working families trying to make ends meet at reasonable interest rates, unlike payday lenders that charge upwards of four hundred percent.
We have a financial literacy program designed to help Illinoisans of all ages understand the benefits of financial asset accumulation and the pitfalls of poor debt management and high interest rates. With the savings rate the lowest it has been since the Great Depression and foreclosure rates in some areas the highest in a generation it is critically important for people to understand all of the factors that contribute to their financial health.
We have programs for below market rate loans for Illinois businesses looking to expand that are tied to job creation. We have programs to help Illinois farmers with the financial support they need to even out their seasonal business cycle. And we have programs that help units of local government – towns and villages, school districts and townships – pool their financial resources and reap the benefits of financial products typically offered to large institutions.
In our short time we have made great progress, but our work has only just begun. That is why I come before you today to ask for your consideration an appropriation of funds for the operation of the State Treasurer’s Office for the next fiscal year. This appropriation will be used to ensure that our office can continue managing the State’s investments wisely, to help make college more affordable, to make home ownership more available and to make the information provided by the Treasurer’s office more accessible.
I come before you with the knowledge and understanding that the State budget and the State’s finances are going through difficult times. I recognize that as the State’s fiscal stewards we must be prudent in the use of taxpayer funds so that we may protect our investments in education, healthcare and public safety.
That is why I present to you today a budget with a decrease in discretionary spending. The vast majority of discretionary spending for the operation of the State Treasurer’s office comes from an appropriation from the General Revenue Fund and the State Pension fund. For each of these funds we are seeking an appropriation of $100,000 less than the previous fiscal year, or a reduction of roughly one percent.
As a former banker I felt that it was critical to structure our office to meet the needs of the public that we serve. Some of the cost savings are due to the actions of the former State Treasurer and I commend her for her foresight. Some of the savings are due to employee attrition, turnover or retirement. In some instances we filled open positions with employees at a lower salary and in some cases we have been able to absorb the work load with current staff. In each case our office is doing more with less. We have enacted better management practices to reduce wasteful spending and have eliminated some contracts that were too costly, or even unnecessary. In once instance we found that we were spending almost $40,000 for more than 20 parking spaces. With better management of our needs we were able to cut that number in half.
One area that we have not and will not cut is in the quality of our staff. I believe that you are only as good as the people around you and the people of Illinois should be served by the best and the brightest that we have to offer. One of my first hires and certainly one of my best is my Chief of Staff, former State Representative Robin Kelly. As former colleagues I am sure that you are all aware of her work ethic, her experience and her dedication to public service. I am very pleased with the progress of our office and I assure you that we wouldn’t be where we are today if it wasn’t for Robin. I know that many of you were sad to see her go but I can tell you that her presence has been a tremendous asset for my office and her door is always open to you, as is mine.
I am proud of what we have been able to accomplish but I recognize that I have not done it alone. Our progress is the result of supporters and well-wishers, family and friends. I am grateful to the many members of the Legislature that have given me their advice, counsel, wisdom and wit. We have been fortunate to have so many friends.
And so I ask you once again to be our partner so that we may continue with our programs and services that put the interests of taxpayers first. I thank you for your consideration.