Name: Jim Dodge
Town of residence: Orland Park
Office sought: State Treasurer
1. What will be your top legislative priorities during your term, and why?
As Treasurer I will refocus the office on its core duty: safely investing the state’s money.
My core platform: sticking to the key functions, consolidation with Comptroller, being the voice of the taxpayers and increasing transparency.
The four main functions of the office should be: investing state funds, investing pooled funds from Illinois local governments, overseeing the outsourced 529 college savings programs and unclaimed property. I do not want to keep finding ways to expand the office so it’s more politically relevant. Illinois needs performance, not politics.
There are a number of good programs in the office of the Treasurer that have been in place for many years and many Treasurers. I will continue those and make them better, just like you’d expect a private sector executive to do.
I strongly support consolidating the offices of Treasurer and Comptroller. Consolidation would save $12-$14 million annually.
Another key focus for me would be real transparency on the state’s finances. Right now, there is plenty of information available, but it is scattered and largely unintelligible. Three key points here: How much does the office of the Treasurer actually cost to run, not just the amount from general revenue fund? How much of the overhead gets covered by fees from unclaimed property and various fund investments, data on which are not the easiest to find? This ought to be simple: how much does it really cost to run the Office of the Governor? Treasurer? Comptroller? Etc.
I want to be the voice of the taxpayers and create a simple, updated and accurate accounting of the state’s financial position. According to TruthinAccounting.org from the audited, 2017 Illinois CAFR, we have $245B of debt and obligations. That number shocks most Illinoisans, especially considering our tax bills.
We need to push to make sure taxpayers have a view for the fully loaded, future costs of political decisions. This will not be easy but it’s important for taxpayers to understand the drivers of what got us into this position in the first place. It’s one thing to have honest and civil disagreements on policy, it’s another to play games with the numbers to bury the costs.
Voters deserve to know how their money is being spent.
2. Should the offices of treasurer and comptroller be combined in Illinois? Why or why not?
Yes. It’s a very simple idea: combine and save money by reducing costs. Available public estimates put the savings at $12-14M a year. As a matter of principle, I believe we cannot and should not ask taxpayers to send one additional dollar to Springfield until we can guarantee that existing dollars are being spent and invested in the most efficient and effective way possible.
Arguments about fraud from the 1950’s are not relevant. I reject them out of hand as political positioning and classic bigger government under-think. Simply put: Data + process design + technology=transparency.
3. How would you assess the Legislature's and governor's approaches to addressing the state's fiscal crisis the past four years? What more should be done?
The taxpayers need a voice for their interests. Treasurer Frerichs should have spoken out about the faulty assumptions in the budget before the budget passed. You can’t make an informed assessment about any budget or any piece of legislation without accurate numbers.
For Frerichs, politics always comes first. For me, I will put policy before politics and I will always tell the truth about the numbers.
Numbers don’t lie, but politicians do.
4. What is your philosophy when it comes to investing state funds? Is Illinois getting the best return on its money?
My investment strategy will ensure the safety of the portfolio and help with the unpaid bills. The essential question is how much money the state really needs versus how much it currently holds to generate “revenue” while ignoring the cost of unpaid bills.
Investment strategy: I feel the current state investment policy – which has been in place for many years – is appropriate for the task at hand: seek a safe return on state money’s that are not immediately needed. I differ from the incumbent in that I would not seek riskier stock market investments and I would mandate hard, factual proof that our venture capital investments, even if they are in Illinois firms, generate sufficient return for the additional risk taken.
Here is an outline of my approach, which seeks safety and performance improvements:
Continue with the current restrictive policy to guarantee the portfolio’s safety, which is investing primarily in very high-quality government or corporate bonds and time deposits. They do not generate a great deal of return, but they are relatively safe.
Assess if small changes in the length of the investments or the required credit rating level will produce a higher return.
Make sure that every dollar under direct management of the Treasurer’s office is in an interest-bearing investment.
Do not seek to equity investments to increase return. While that is fine for private investors, it’s not appropriate for a state in Illinois’ condition with money it needs in the short term, which is the core job of the Treasurer.
Complete a rigorous assessment to see if we really do need to have roughly $14B under management that earns less than 2% while the $7+B pile of unpaid bills costs us between 9% and 12% penalty interest. The state’s money needs to perform, not languish in investments whose first objective might be the “political optics.”
It’s important to note that the state has well over 700 separate, special purpose funds. This adds complexity and likely additional cost to managing the money, which needs to be quantified and changes recommended if needed.
5. What should the Legislature do to resolve the pension funding shortfall? Can lawmakers constitutionally reduce pension benefits?
We have decades of bad financial decisions in Springfield because pension benefits were promised but no one added up the real costs. Once those costs were known, the political calls simply ignored the required contributions because otherwise our taxes would have soared, they would have had to cut services or walked back the promises.
If they had been honest about the real costs of what they were passing, we would have thrown them out of power years ago. Which is exactly why they didn’t and now we have a state that is dead last in the nation in terms of financial health.
An example of a solution is Arizona, which had constitutional guarantees like Illinois. The public sector unions worked with the legislature to put a referendum on the ballot. Voters overwhelmingly approved that compromise solution. The key point? Everyone knew the system was broken and was on track to ruin the state, but they worked it out to everyone’s benefits.
Why can’t Illinois do the same?
6. Should marijuana be legalized for recreational use in Illinois? Why or why not?
If the people of Illinois choose to legalize marijuana that is a policy judgment call for them to make and I will defer to their decision. The private, legal use of marijuana doesn’t bother me. But I’d like to make sure we bring the full set of facts and considerations back into the discussion and think through all the social impacts. Example, how do we enforce DUI laws regarding marijuana?
As a candidate for Treasurer, I think the most relevant questions to the office I seek to hold are two-fold:
First, how do we resolve conflicts between state and federal law on the issue.
Second, how do we handle the complex questions of how banks and other financial institutions involved in the legal sale or production of marijuana would be treated under the laws of Illinois and the laws of the US.
7. Which areas of state government need to endure more budget cuts than they have thus far?
I’m going to focus on consolidating this office with Comptroller but to answer the question they all do. Unless and until Springfield gets honest about the financial math and tells people how much their pension promises are crowding out basic services, everything needs to be under the spending microscope to find efficiencies.
• Are the state's two 529 college-tuition savings plans being utilized by enough people? If no, how can participation be increased?
These are good programs, enabled by federal tax legislation. They have been in place for many years. As Treasurer, I will much more active in promoting financial literacy and use of programs like this for parents to help their kids get a college or technical education.
I don’t agree with seeding these accounts for every kid born in Illinois with state money. While that is a noble goal, it doesn’t really address the core need: making higher education more affordable in the first place. My concerns are these: First, the state is technically broke, so we don’t have the money. Second, if the money goes unused for this propose, who keeps control of it?
8. Should Illinois' tax structure be changed to bring in more revenue?
No. Let me repeat that, no. Illinois currently has one on the highest total tax burdens in the country and at the same time, $200 Billion in unfunded liabilities and the worst credit score of all 50 states. We are literally dead last in credit worthiness.
The only way that happens is when you have incompetent legislators who can’t or don’t want to understand the true costs of their promises. Taxpayers get stuck with the bill.
We have a spending problem, not a revenue problem.
9. What should the Legislature do to limit tuition increases at the state’s public universities?
It is not a question of limiting the tuition increases by legislation. It’s a question of forcing universities to justify everything they spend, looking at their overall cost structure plus making them be transparent to the students and parents on what they spend money on.