SPRINGFIELD – For state Sen. Kirk Dillard, it’s an ethics reform law. For businessman Bruce Rauner, it’s how his private-equity funds made money for state pension systems. State treasurer Dan Rutherford cites a fairer reimbursement of nursing homes. Sen. Bill Brady? His role in the state’s landmark state pension overhaul.
Each of the Republican contenders for governor got a chance to brag on a campaign questionnaire from The Associated Press, identifying what they think are their biggest accomplishments. The AP’s examination of their choices offers voters a glimpse into each one’s priorities and leadership as the March 18 primary election nears.
In each case, the candidate generally can take credit for his claims, though not without a reservation or complication.
Rauner might be slightly exaggerating about his firm’s success with some state funds, depending on how one measures, while the pension fix that Brady boasts of helping craft still awaits a court ruling on its constitutionality. By emphasizing his ethics work, Dillard draws attention to his cooperation with then-Illinois Sen. Barack Obama, a Democrat not popular with GOP voters, while Rutherford’s work to help nursing homes reveals the wonkish focus for which he’s known.
The Bloomington senator calls last year’s state pension deal and his work toward it his proudest accomplishment. The legislation aims to wipe out a $100 billion deficit in five state retirement systems by reducing annual cost-of-living increases for retirees and raising the retirement age for younger workers.
As a member of a special committee convened by Gov. Pat Quinn, Brady said he knows “the hours of work and compromise that ultimately was reflected in that legislation, which I believe moves the state’s public retirement systems toward fiscal stability.”
Brady was a leading opposition voice on the committee. He pushed for more savings, including through a higher retirement age and giving state employees the option of a 401(k)-style retirement program, which became part of the final package.
A Democrat on the committee, Rep. Michael Zalewski of Riverside, said the panel’s work amounted to a lot of time and effort in a “project that frankly nobody thought would be successful.”
“There’s rightfully some pride of authorship in that and I don’t necessarily disagree with Sen. Brady’s statement that it was one of his biggest accomplishments,” Zalewski said. “I know it was one of mine.”
Problem is, the law now is the target of numerous lawsuits and a number of state leaders – including Rutherford, the treasurer – believe it violates the constitution for unilaterally diminishing state employee benefits.
The Hinsdale senator points to 1998 legislation he sponsored with a little-known lawmaker – now President Obama – that became the state’s biggest campaign reform since the Watergate era.
Known as “the Gift Ban Act,” it prohibits most gifts from lobbyists and contractors to lawmakers, limits personal use of campaign funds, limits Springfield-area fundraisers during the legislative session, and stopped fundraising by government employees among those they regulate. It also requires political donors to disclose their occupation and employer.
“The era of full disclosure and the end of pay-to-play politics has arrived,” Dillard wrote in the questionnaire. “To accomplish this, it was necessary to build coalitions with members of the opposite party, without abandoning my core Republican values.”
It’s a stretch to say Illinois’ pay-to-play politics has ended. But the 1998 effort was important, said David Morrison, executive director of the Illinois Campaign for Political Reform.
For years, lawmakers couldn’t agree on ethics reform. When each party designated point-people to tackle it – in the Senate, Dillard and Obama – some were shocked to learn of bipartisan agreement, he said.
“The process that allowed [later reform] bills to pass was begun with that ‘98 Gift Ban Act,” Morrison said.
The flip-side for Dillard is having to remind people that he worked with Obama, who Dillard also praised in a 2008 presidential campaign commercial. Brady criticized him for it in a debate last week, dismissing Dillard’s attempt to downplay it now as “pathetic.”
The billionaire from Winnetka, who has never held public office, points to the success of his former private-equity company, GTCR, from which he resigned in 2012. In Illinois, GTCR invested money for three pension systems: for public school teachers, state employees and university workers.
“I’m particularly proud of the fact that GTCR has been trusted for decades to oversee the retirement investments of” state workers, Rauner said, “and has created tremendous returns for them – more than doubling the stock market’s performance – while providing exceptional value for taxpayers.”
Whether GTCR actually “doubled” the market’s performance depends on which investments are examined.
William Atwood, executive director of the Illinois State Board of Investment, said the Standard & Poor’s 500 index has returned 11.1 percent since 1984, the year the board first invested with GTCR.
Since then, the state board has invested $130 million in six GTCR funds, yielding a return of 17.3 percent. Atwood said the board considers investments successful if they top the S&P 500’s performance plus 5 percentage points, or in the case of the market since 1984, 16.1 percent.
Therefore, using that measurement, GTCR has out-performed the market, but has not doubled it.
The state’s largest pension program, the Teachers’ Retirement System, has invested $120 million in three GTCR funds since 2000, with a return of 25 percent, spokesman Dave Urbanek said. In comparison, all of TRS’s private-equity investments have had a 10-year return of 14.6 percent, Urbanek said.
The S&P 500 during that period has returned 3.6 percent, so GTCR indeed has more than doubled the stock market’s performance specifically in its TRS work.
Asked about Rauner’s claim, spokesman Mike Schrimpf cited overall GTCR numbers – not just in Illinois – saying the average rate of return for GTCR funds since 1980 is nearly 19 percent, compared to a stock market return of 8 percent.
Rutherford, of Chenoa, was chairman of the House Republican Long Term Care Task Force a decade ago, during which he takes credit for ushering in a more equitable means of state Medicaid reimbursement for nursing homes.
In 2003, Illinois began using the so-called Minimum Data Set assessment to determine payment on the actual work a nursing home does for patients, rather than on average costs and geographic formulas, which Rutherford said shortchanged some homes.
The effort “was minutia without high-profile headlines,” Rutherford said. “It was an important policy change to enhance the continuum of care for our elderly.”
Matt Hartman, vice president of public policy for the Illinois Health Care Association, said the move made a “significant change” in making Medicaid distribution more fair.
“It also brought additional money into facilities because it showcased the need for additional funding across the entire long-term care spectrum,” Hartman said.
In a nod to his key role, Republican Rutherford retained sponsorship of the legislation despite Democratic control in the House, Hartman said.
“I don’t know that we could have gotten it done without his leadership,” he said. “He did a phenomenal job.”