Retire at 72? Quinn panel's varied views on priming Illinois' economy

Tuesday, July 13, 2010

Did you know that a commission named by Gov. Pat Quinn wants to raise the retirement age for state workers to a minimum of 72?

Yes, right there on page 96 of its recent report, Mr. Quinn's Economic Recovery Commission says that — along with "aggressively" reviewing Medicaid spending, raising the income tax and widening the sales tax base — retirement ought to come at age 72.

I got kind of a chuckle out of the proposal, which somehow failed to make it into Mr. Quinn's press release on the commission's final report. But that's what happens when you ask a bunch of non-Springfield types to tell you what they think.

We could do worse than to at least listen.

The report of the Quinn panel, which was headed by Loop Capital Markets Managing Director Alex Rorke and Quincy Mayor John Spring, is only the latest in a series of proposals in the past year or so about how to revive Illinois' moribund economy.

They have good ideas, and some real knee-slappers. This one totally ignores items I always hear from local business folk — cutting workers' compensation and unemployment insurance rates, and tort reform — even though the heads of the Chicagoland and state chambers of commerce served on the panel.

But the big-picture view is rather acute.

Like the conclusion that solving Illinois' budget woes likely will take a combination of tax hikes and long-term fundamental cuts in spending programs. That's quite similar to the conclusion of the General Assembly's fiscal unit in its own recent report.

Or the conclusion that Illinois will continue to suffer a corporate brain drain of massive proportions — Amgen, Netscape and the like — until it does a better job of providing early-stage capital for promising start-up firms.

On that point, the panel urges some subtle arm-twisting of Illinois' pension funds to invest here at home instead of in conventional big companies and bonds. "Long-term performance of venture capital has been spectacular," Mr. Rorke says.

More controversial will be its proposal that the state effectively pick four or five potential growth industries — perhaps biotech or advanced materials, for instance — and really nurture them.

The panel also correctly concludes that better leveraging Illinois' export industries could provide bundles of jobs, though I thought its ideas on how to do the obvious were a little weak.

Similarly, it is absolutely correct that the state's tax code needs to be modernized if the Illinois economy is to function, though no two lawmakers will agree on how to do so.

Others surely will have other ideas.

For instance, I asked the campaign of GOP gubernatorial hopeful Bill Brady for its thoughts on the subject.

"Pat Quinn has a record of increased state spending, more borrowing and increased taxes," it replied — an indication that Mr. Brady sees more mileage in cutting, though he continues to resist detailing those cuts.

"Our goal was to push things but also to push them in a direction that was realistic," says Mr. Rorke.

Read the report and decide for yourself. Sometimes it's a good idea to throw ideas at the board and see which ones stick.