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Laurence Msall has been a resident of Oak Park since 1975, when his parents moved from the South Side of Chicago to the 500 block of S. Kenilworth Avenue. There he became the neighbor of Redd Griffin, a state representative who introduced him to Republican politics.

Msall and his family are members of the St. Giles Family Mass Group and he volunteers with the PADS homeless shelter and L’Arche, which offers community living for people with developmental disabilities. Msall’s sister, who has Down syndrome, lives in the L’Arche home on Austin Boulevard.

He is executive director of the Civic Federation, a 116-year-old organization founded by Jane Addams, Bertha Palmer and Lyman Gage. A former economic development adviser for governors George Ryan and Jim Thompson, Msall has headed the Civic Federation since 2002. Lately, the organization has been making headlines for speaking out on the state’s fiscal crisis and proposing a plan to get the state back on the right track.

Wednesday Journal recently caught up with Msall for his thoughts on a range of topics.

The Civic Federation has been generating a lot of news coverage lately.

We’re a non-partisan, government research organization that has expertise in areas such as property taxes, public pensions and government finance. The organization has always had a certain confidence in the potential of government to improve the quality of life in the community. We’re not an anti-tax, anti-government group. We try to work with government to promote rational tax policy and fiscal reasonableness.

Do you still have confidence that government can improve its efficiency?

Yes, one of the guiding principles of the membership, who come from a wide variety of businesses, corporations and industries in the greater metropolitan area, is that there is an appropriate role for government and society benefits from an organized government that delivers services in an efficient and effective way.

We take an objective look at the facts. Everybody can interpret the facts for their different positions, but we should only be arguing over one set of facts. You’re entitled to your own opinion. You’re not entitled to your own facts.

The state of Illinois, which is facing a $12.8 billion deficit, has a structural problem and a spending problem. It has found a way, particularly in the last decade, to spend more money than it’s taking in and to use borrowing and ignoring its bills, pushing them from one year to the next. It is very costly to current and future taxpayers, but we also believe it is harming the social and government infrastructure of the state. You have the schools of Oak Park not receiving their categorical funding from the state after they have appropriated the money and been promised that they will receive the money.

Financial observers from all over the country are looking at Illinois and saying, “You owe $70 billion to your pension fund. You owe $40 billion in retirement income. You don’t have any plan for how you’re going to pay that.” The Pew Center for the States came out recently and said Illinois is the worst funded pension system in the U.S., and it has the worst financial management of all the states. People used to take comfort in saying, “Well, we’re not as bad as California.” By objective standards, we are now worse than California in terms of liabilities and our failure to deal with the situation.

The state, instead of making a contribution to its pension fund last year, through its operating budget, borrowed $3.5 billion. That cost the taxpayers of Illinois, for one year, $800 million. That’s $800 million that’s not going to be available for Oak Park schools or the developmentally disabled or seniors or anything else. That is outrageously, fiscally irresponsible.

We identified a $12.8 billion deficit, of which $5.8 billion is unpaid bills from the previous two years that we just keep pushing forward and $4.1 billion in unfunded pensions. We borrowed to make the pension contribution.

Then there’s about $1.5 billion in federal stimulus money that’s not going to be available after December of this year.

Is there a way to resolve the crisis?

The Civic Federation looked at what other states were doing (Indiana, Wisconsin, California, Virginia), looked at what other civic groups had been recommending (Illinois Policy Institute, Center for Budget and Tax Accountability) and then came forward with our own path to more fiscal stability.

We found it would be reasonable if the state cut spending by $2.5 billion, bringing our spending back to Fiscal Year 2007, which was the last year of full state spending before the economic downturn started to affect revenues. We would still have to hold Medicaid and elementary and secondary school aid at the current year’s spending level in order to avoid losing federal stimulus dollars and avoid putting the public school system in a crisis where they would be forced to dramatically raise property taxes or enormous layoffs.

[But] the primary driver of the state’s fiscal crisis is the consistent underfunding of the pensions and the fact that the pension funds are running out of money. We owe over $70 billion in unfunded liabilities. You cannot escape that. It is something the state has promised its employees and retirees. The only way you’re going to reduce that obligation is by reforming the system.

So we’re calling for raising the retirement age for state employees to match Social Security at 67½. Right now, many state employees can retire at 55, some at 50. We have an automatic increase for every retiree, 3 percent a year, regardless of inflation. That has to be tied to more reasonable indicators like the CPI.

Then and only then would the Civic Federation support additional tax increases. Those increases will need to be of such a magnitude that the most obvious place to go would be the income tax. We would probably need to raise it from 3 to 5 percent and for corporations from 4.8 to 6.4 percent. We would also support the taxing of cigarettes and eliminate the state exemption for taxing retirement income.

Our plan really attempted to share the pain. We’ve been calling for employees to increase their contribution to the pension and to their health insurance. The state has a very, very expensive health insurance plan for which employees who have retired with 20 years of service pay nothing. That’s just not financially [viable].

The worst thing the state of Illinois can do right now is continue to ignore this problem and use borrowing and gimmickry to push bills off to future years. We are seeing social service organizations stretched to the brink, school districts laying off teachers around the state, local governments being forced to borrow. And the state’s credit-worthiness is being called into question. If the state of Illinois should fall into non-investment grade, it would create a financial crisis the likes of which the state hasn’t seen in a hundred years. We’re at the risk of the state not being able to borrow money in the future.

Even governments seemingly removed from the state’s fiscal crisis, like the Village of Oak Park, are having their credit-worthiness reviewed because of the unreliability of the state’s finances.

Does the Civic Federation take a lot of heat for its positions?

As a business organization, my members don’t want to be mayor or governor or overthrow the Water Reclamation District or take a seat on the county board. They just want the government to operate more efficiently and more reasonably and hopefully to lessen the burden on taxpayers.

To describe me as a Republican is a fair assessment, but I don’t promote myself as a Republican. I worked with Barack Obama in Springfield and knew him very well. I played basketball with him. Like many Illinoisans, I was thrilled to see someone we knew become president of the United States. I took my daughters to the inauguration.

I work with whomever. Sen. Don Harmon has carried a lot of reform bills for the Civic Federation. He helped us get rid of the Tuberculosis Sanitarium District [formerly in Forest Park], a level of government that was completely obsolete.

Right now the Civic Federation is very concerned, bordering on frightened, because of the financial condition of the state of Illinois. We’re frightened because we’ve seen an unwillingness in the past year by the General Assembly and the governor to really deal with this financial crisis.

What most people want is that their government provide a safety net and those services that the private sector can’t effectively provide to them in an efficient way. There are plenty of examples of government operating efficiently and delivering services. Illinois is an outlier not because of the economic downturn. We’re an outlier because we’re not dealing with the problem.

Do you have opinions on economic development in Oak Park?

The library is an example of something I wasn’t supportive of. I didn’t think we needed a new one. I liked the old library. It was the one I sort of grew up in. But I was wrong. Now, it’s one of my favorite places. It’s one of the most beautiful places in Oak Park. I’m very pleased that we make those kinds of cultural investments.

I’m a relative newcomer. I’ve lived here for 34 years. A lot of the hard work was done before my family came here in 1975. The Bobbie Raymonds and Sherlynn Reids are giants, and so were the government officials who helped steer the village.

Oak Park is unique in the amount of participation that occurs in our government – in our commissions, our boards, the debate that goes on for different projects. In the long run, that’s probably good, but sometimes the more active people may end up dominating the conversation because too many people don’t find the time to participate in village board meetings or serve on various task forces. But there are a lot of very, very committed people who make Oak Park a pretty special place.

When you think of what goes on at the Farmers’ Market and the breadth of diversity in our schools, we are much better for it.

The Tuesday night Irving basketball league is one of the great melting pots – not so much melting as a sweating pot. Some of these guys have been playing for 30 years or more. They range from guys in their 60s to a couple of sons we let play in their mid-20s.

I feel I know every house and street in Oak Park. I delivered the Chicago Daily News. It was my first management job – with Oakside Daily News Agency. Jim Smith took me under his wing. I became a supervisor of paper routes, which really meant I did the routes when the kids were sick.

I have no aspirations for public office, but I did once run for the Park District of Oak Park. I did not receive the endorsement of Wednesday Journal. It was a missed opportunity but a great gift that others were selected.

Who is the greatest public figure in Oak Park?

Sheila Carter, the principal of Hatch School. She could literally run General Motors. Before Sheila Carter, Hatch had a very different reputation. Sheila started as principal when my daughter started kindergarten. It has been the most inspiring thing to watch. She’s only about 5 feet, 3 inches tall. She and her husband were gymnasts at the University of Illinois. She knows all the kids, has great presence and demands excellence in a very positive way.

Other people I think are heroes to Oak Park would be Larry Christmas who ran the Northeast Illinois Planning Commission. Certainly Phil Rock. I saw him operate down in Springfield. He was an awesome statesman who was responsible for bringing the state’s tourism promotion program, something I helped push through the legislature but would have gone nowhere without his leadership. And Redd Griffin.

What was the high point of your time in government?

My proudest moment was when George Ryan called a halt to the death penalty [in the late 1990s]. You could really feel how much stress he was under and how worried he was. The evidence was clear and mounting that there were people on Death Row by mistake. He was willing to break from what the political advisers were telling him to do and declare a moratorium. I had almost no part in doing that, but that was my proudest moment. They lit the Coliseum in Rome for him because of that.

Web Extra!
The interview in its entirety
An Interview with Laurence Msall

Head of the Civic Federation weighs in on state finances, life in Oak Park

Laurence Msall has been a resident of Oak Park since 1975, when his parents moved from the South Side of Chicago to the 500 block of

South Kenilworth Avenue
, where he was the neighbor of Redd Griffin, a state representative who introduced him to Republican politics.

Msall and his family are members of the St. Giles Family Mass Group and volunteer for PADS and L’Arche, which offers community living for people with developmental disabilities. Msall’s sister, who has Down syndrome, lives in the L’Arche home on

Austin Boulevard
.

He is the executive director of the Civic Federation, a 116-year-old organization founded by Jane Addams, Bertha Palmer and Lyman Gage (the same group who brought the 1893 World’s Fair to Chicago. A former economic development advisor for governors George Ryan and Jim Thompson, Msall has headed the Civic Federation since 2002. Lately, the organization has been making headlines for speaking out on the state’s fiscal crisis and proposing a plan to get state government back on the right track.

We interviewed him recently at the offices of Wednesday Journal.


A lot of people weren’t aware of the Civic Federation until the recent spate of news coverage.

The organization has always had a certain confidence in the potential of government to improve the quality of life in the community. We’re not an anti-tax, anti-government group. We try to work with government to promote rational tax policy and fiscal reasonableness.


Do you still have confidence that government can improve its efficiency?

Yes, one of the guiding principles of the membership, who come from a wide variety of businesses, corporations and industries in the greater metropolitan area, is that there is an appropriate role for government and society benefits from an organized government that delivers services in an efficient and effective way.

That doesn’t mean we aren’t challenged sometimes by the slowness of government to modernize or reform. But we focus almost exclusively now on tax and fiscal issues. We take an objective look at the facts. Everybody can interpret the facts for their different positions, but we should only be arguing over one set of facts. You’re entitled to your own opinion. You’re not entitled to your own facts. In financial reviews as to whether a budget is balanced, whether a government is operating efficiently, matching its expenditures to revenues, it’s often very straightforward.


And people look to you to provide those facts in a non-partisan manner?

We’re a non-partisan, government research organization that has expertise in an area such as property taxes, public pensions and government finance. We have a staff of about 12 who are all advance-degreed in either government finance, law or general business finance. We spend our resources understanding and analyzing government budgets and tax situations.


Then you make statements that are somewhat unpopular?

The state of Illinois, which is facing a $12.8 billion deficit, has a structural problem and a spending problem. It has found a way, particularly in the last decade, to spend more money than it’s taking in and to use borrowing and ignoring its bills, pushing them from one year to the next. It is very costly to current and future taxpayers, but we also believe it is harming the social and government infrastructure of the state. You have the schools of Oak Park not receiving their categorical funding from the state after they have appropriated the money and been promised that they will receive the money. They’re 90, 120 or in some cases 6 months behind in those transfers. When you have the developmentally disabled service providers or elderly providers not receiving their funds for over 6 months, that puts an enormous burden on those service providers, which eventually comes back to an increased cost to the taxpayers.


What does the state need to do?

The state is in a fiscal crisis of epic proportion. The state needs to stop spending more than it takes in. We came forth several weeks ago with a plan that we believe is a way to rehabilitate the horrible situation Illinois is in. Financial observers from all over the country are looking at Illinois and saying, “You owe $70 billion to your pension fund. You owe $40 billion in retirement income. You don’t have any plan for how you’re going to pay that.” The PewCenter for the States came out recently and said Illinois is the worst funded pension system in the U.S., and it has the worst financial management of all the states. People used to take comfort in saying, “Well, we’re not as bad as California.” By objective standards, we are now worse than California in terms of liabilities and our failure to deal with the situation.

The state, instead of making a contribution to its pension fund last year, through its operating budget, borrowed $3.5 billion. That cost the taxpayers of Illinois, for one year, $800 million. That’s $800 million that’s not going to be available for Oak Park schools or the developmentally disabled or seniors or anything else. That is outrageously, fiscally irresponsible.

We looked at the budget the General Assembly passed and the governor signed into law. We identified a $12.8 billion deficit, of which $5.8 billion is unpaid bills from the previous two years that we just keep pushing forward and $4.1 billion is unfunded pensions. We borrowed to make the pension contribution.

Then there’s about $1.5 billion in federal stimulus money that’s not going to be available after December of this year.

The Civic Federation looked at all the different scenarios, looked at what other states were doing (Indiana, Wisconsin, California, Virginia), looked at what other civic groups had been recommending (Illinois Policy Institute, Center for Budget and Tax Accountability) and then came forward with our own path to more fiscal stability.

We found that it would be reasonable if the state cut spending by $2.5 billion, bringing our spending back to Fiscal Year 2007, which was the last year of full state spending before the economic downturn started to affect revenues. We would still have to hold Medicaid and elementary and secondary school aid at the current year’s spending level in order to avoid losing federal stimulus dollars and avoid putting the public school system in a crisis where they would be forced to dramatically raise property taxes or enormous layoffs.

[But] the primary driver of the state’s fiscal crisis is the consistent under-funding of the pensions and the fact that the pension funds are running out of money. We owe over $70 billion in unfunded liabilities. You cannot escape that. It is something the state has promised its employees and retirees. The only way you’re going to reduce that obligation is by reforming the system.

So we’re calling for raising the retirement age for state employees to match Social Security at 67 1/2. Right now, many state employees can retire at 55, some at 50. We have an automatic increase for every retiree that goes up 3 percent a year, regardless of inflation. That has to be tied to more reasonable indicators like the CPI or something the state can afford.

We’re not talking about dumping the “defined benefit plan,” which is a certain percentage of your salary based on your years of service. We’re just saying you have to relate it more to what is economically reasonable. Raise the retirement age, reduce the annual increase tied to the CPI.

Then and only then would the Civic Federation support additional tax increases. Those increases will need to be of such a magnitude that the most obvious place to go would be the income tax. We would probably need to raise it from 3 to 5 percent and for corporations from 4.8 to 6.4 percent. We would also support the taxing of cigarettes, $1 a pack, and eliminate the state exemption for taxing retirement income.

These are all enormously difficult. There is something for everyone to be concerned about, but our plan really attempted to share the pain. We’ve been calling for employees to increase their contribution to the pension and to their health insurance. The state has a very, very expensive health insurance plan for which employees who have retired with 20 years of service pay nothing. That’s just not financially [viable].


Does anyone like the plan?

We’ve received praise from different quarters. Newspaper editorials across the state said they were pleased to see someone providing a comprehensive solution.


Are you the only ones with a comprehensive plan?

We are one of the few groups who have come out with an actionable, comprehensive plan that includes cutting spending, pension reform and tax increases. We are not pleased to be in a position to take such a drastic approach to the state’s finances. We got into this problem not because of the economic downturn but because of some of the worst financial management in the country, ignoring basic economic principles, according to the PewCenter.

If we don’t do these things now, it will only make the pain much more severe. It will make the cost to the taxpayers much higher. The worst thing the state of Illinois can do right now is continue to ignore this problem and use borrowing and gimmickry to push bills off to future years. We are seeing social service organizations stretched to the brink, school districts laying off teachers around the state, local governments being forced to borrow. And the state’s credit-worthiness is being called into question. If the state of Illinois should fall into non-investment grade, it would create a financial crisis the likes of which the state hasn’t seen in a hundred years. We’re at the risk of the state not being able to borrow money in the future.

Even governments seemingly removed from the state’s fiscal crisis, like the Village of Oak Park, are having their credit-worthiness reviewed because of the unreliability of the state’s finances.


You’ve now been inside and outside state government. Which do you prefer?

I had the pleasure of working for two different governors, Jim Thompson and George Ryan as his economic development advisor. There’s an awful lot of good people in government who work hard and do the right thing and try to improve the lives of Illinoisans.

I like my job at the Civic Federation a lot. I loved my service with the Governor’s Office. The advantage of the Civic Federation is I get to stay with my family in Oak Park and don’t have to travel as often to Springfield as I used to.

Government is a very hard place to be right now, but it’s also a very fascinating place to be because the problems and challenges they face are really historic.


Are you able to speak out more openly in your current job?

I think I can be more objective about how the government is acting. I’m not under any political or other restrictions in terms of promoting the Civic Federation’s positions. I work for the Civic Federation, which is overseen by a board of directors, very distinguished business leaders who dictate the policies and positions.


Do people accuse the Civic Federation of being a Republican organization?

People point more toward the fact that we are primarily a business-funded organization. We’re non-partisan. We don’t take any political positions. The by-laws dictate that.

As a business organization, my members don’t want to be mayor or governor or overthrow the government of the Water Reclamation District or take a seat on the county board. They just want the government to operate more efficiently and more reasonably and hopefully to lessen the burden on the taxpayers.

It is reasonable for people to draw the conclusion that I am a Republican [having worked for two Republican governors]. To describe me as a Republican is a fair assessment, but I don’t promote myself as a Republican. I worked with Barack Obama in Springfield and knew him very well. I played basketball with him. Like many Illinoisans, I was thrilled to see someone we knew become president of the United States. I took my daughters to the inauguration.

I work with whomever. Sen. Don Harmon has carried a lot of reform bills for the Civic Federation. He helped us get rid of the Tuberculosis Sanitarium District [formerly in Forest Park], a level of government that was completely obsolete.


You could certainly be forgiven for being pessimistic about government, but are you hopeful?

Right now the Civic Federation is very concerned, bordering on frightened, because of the financial condition of the state of Illinois. We’re frightened because we’ve seen an unwillingness in the past year by the General Assembly and the governor to really deal with this financial crisis.

It was only because of how much worse the situation had become in the last nine months to a year that the Civic Federation took the position that we have to try to fix this problem now before another election cycle happens – and that the fabric and quality of life in Illinois is in jeopardy because of fiscal irresponsibility and inaction in Springfield.


Conservatives at one extreme say government can never do anything right. Liberals at the other say the free market will always land us in a depression. Is it possible for the free market and government to work together effectively?

It definitely is. What most people want is that their government provide a safety net and provide those services that the private sector can’t effectively provide to them in an efficient way. There are plenty of examples of government operating efficiently and delivering services [for example the police and court systems].

Illinois is an outlier not because of the economic downturn. We’re an outlier because we’re not dealing with the problem.


Do you have opinions on economic development in
Oak Park?

I follow what’s going on locally. I certainly am very interested in what goes on at the schools. I was very, very disappointed to see that one unit of government is going to the extraordinary lengths of suing another. The legal costs, the lack of civic-mindedness that something like that represents is troubling.

The library is an example of wasn’t supportive of. I didn’t think we needed a new one. I liked the old library. It was the one I sort of grew up in. But I was wrong. Looking at the new library now, it’s one of my favorite places. It’s one of the most beautiful places in Oak Park. I’m very pleased that we make those kinds of cultural investments.

The issue of our schools is the most important. The main thing that distinguishes us from other west suburban communities that are not as affluent is the quality of our schools, and if we let any one of our schools fall into a condition that is not superior, then we jeopardize the entire community.

I’m a relative newcomer. I’ve lived here for 34 years. A lot of the hard work was done before my family came here in 1975. The Bobbie Raymonds and Sherlynn Reids are giants, and so were the government officials who helped steer the village.

I think there’s a tendency to take for granted the affluence of Oak Park. If we don’t maintain a certain level of quality, culturally, educationally, in our infrastructure, we’ll jeopardize our values.

Oak Park is unique in the amount of participation that occurs in our government – in our commissions, our boards, the debate that goes on for different projects. In the long run, that’s probably good, but sometimes the more active people may end up dominating the conversation because too many people don’t find the time to participate in village board meetings or serve on various task forces. But there are a lot of very, very committed people who make Oak Park a pretty special place.

My job is such that I could live anywhere in the Chicago metropolitan area. Our decision to live in Oak Park was an active decision. We are very proud to be a part of Oak Park. We have our problems like other communities, but we seem to have a great willingness to roll up our sleeves and get involved.

When you think of what goes on at the Farmers’ Market and the breadth of diversity in our schools, we are much better for it.


What are some of your other favorite places?

My favorite place to eat is Johnny’s Italian Beef. I probably know more people [here] who worked for different governors or U.S. senators than just about any other town. Gov. Quinn still goes to St. Giles Church.

The Tuesday night Irving basketball league is one of the great melting pots – not so much melting as a sweating pot. Some of these guys have been playing for 30 years or more. They range from guys in their 60s to a couple of sons we let play in their mid-20s.

I feel I know every house and street in Oak Park. I delivered the Chicago Daily News. It was my first management job – with Oakside Daily News Agency. Jim Smith took me under his wing. I became a supervisor of paper routes, which really meant I did the routes when the kids were sick.

I have no aspirations for public office, but I did once run for the Park District of Oak Park. I did not receive the endorsement of Wednesday Journal. It was a missed opportunity but a great gift that others were selected.


Who is the greatest public figure in
Oak Park?

Sheila Carter, the principal of HatchSchool. She could literally run General Motors. Before Sheila Carter, Hatch had a very different reputation. Sheila started as principal when my daughter started kindergarten. It has been the most inspiring thing to watch. She’s only about 5 feet, 3 inches tall. She and her husband were gymnasts at the University of Illinois. She knows all the kids, has great presence and demands excellence in a very positive way.

Other people I think are heroes to Oak Park would be Larry Christmas who ran the Northeast Illinois Planning Commission. Certainly Phil Rock. I saw him operate down in Springfield. Even working with a Republican governor, he was an awesome statesman who was responsible for bringing the state’s tourism promotion program, something I helped push through the legislature but would have gone nowhere without his leadership. And Redd Griffin gave me my first taste of government. He was a mentor and an inspiration, not just for his government service, but also his community service.


What was your proudest moment in government?

My proudest moment was when George Ryan called a halt to the death penalty [in the late 1990s]. You could really feel how much stress he was under and how worried he was. The evidence was clear and mounting that there were people on Death Row by mistake. He was a governor who was willing to break from what the political advisors were telling him to do and declare a moratorium. I had almost no part in doing that, but that was my proudest moment. They lit the Coliseum in Rome for him because of that moratorium.

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