The ILLINOIS Report 2012 Foreword At the University of Illinois, we share the same dream as every citizen across our great state: a future of prosperity and progress, security and success, health and happiness. For nearly 150 years, the university has partnered with the state to build a better tomorrow for the people of Illinois, through world-class academic and research programs that produce both new generations of leaders and new waves of innovation. And for nearly half of our storied history, our Institute of Government and Public Affairs (IGPA) has helped lead the way. IGPA is a jewel of our university and our state, created by the Illinois General Assembly in 1947 as a place where decision-makers can turn for real solutions to the state’s most critical problems. Its offices in our campus cities of Urbana-Champaign, Chicago, and Springfield are home to top public- policy researchers, known nationally for their groundbreaking scholarship in fields ranging from public finance and ethics to health and social policy. Each year, our IGPA experts take a fresh look at the state’s biggest challenges in The Illinois Report . This sixth edition examines a host of issues that are crucial to our future, including the state’s budget deficit, its changing demographics, and its educational needs. The report has a singular goal—providing nonpartisan, evidence-based analysis to help guide decision-makers and steer Illinois toward a new era of economic and social growth that will make it a model for the nation. The University of Illinois deeply values the key role that our academic and research programs play in shaping the state’s future, and the crucial support that we receive from Illinois and its citizens. The Illinois Report 2012 is another example of the value we bring to the state. Michael J. Hogan President University of Illinois 3 Preface The Illinois Report 2012 looks with a critical eye at some of the most pressing issues facing the state. This report’s primary goal is to provide decision-makers with information they can count on to be grounded in evidence and presented in accordance with the best practices of social science study. The faculty and staff of the University of Illinois who have contributed to this edition of The Illinois Report 2012 are some of the University’s best scholars. They devote their careers to pursuing solutions to the problems that face society. The University of Illinois is committed to public service and public engage- ment across its three campuses. The rigorous scholarship of the Institute of Government and Public Affairs and the publication of The Illinois Report, now in its sixth year, epitomize this commitment. I look forward to working with our state’s leaders and policymakers as they confront the difficult decisions that await them during the coming year. I also invite your comments or suggestions about how the University of Illinois can be of further assistance to Illinois become an even greater state. Christophe Pierre Vice President for Academic Affairs University of Illinois 4 The ILLINOIS Report 2012 Table of Contents Foreword ...................................................................................................................... 3 Michael J. Hogan Preface .......................................................................................................................... 4 Christophe Pierre Introduction ................................................................................................................ 6 Robert F. Rich CHAPTER 1: Lessons Learned from the 2010 Census .................................................................. 8 Matthew Hall CHAPTER 2: Latinos in Illinois: A Growing Population Amid a Stagnating Economy and Challenged Public Institutions ................................................................................................................ 22 Jorge Chapa CHAPTER 3: The Painfully Slow Recovery Continues ................................................................ 34 J. Fred Giertz CHAPTER 4: Through a Dark Glass: Illinois’ Budget Picture is Dire and Distorted ............................................................ 41 Richard F. Dye, David F. Merriman, and Nancy Hudspeth CHAPTER 5: Illinois’ Pension Puzzle ............................................................................................ 57 Darren Lubotsky CHAPTER 6: An Illinois Health Care Report Card ........................................................................ 65 Bryan N. Becker CHAPTER 7: The Challenging Road to Coherence in Illinois Education Policy ...................... 72 Benjamin M. Superfine, Mark A. Smylie, Marlon I. Cummings, and Steven Tozer CHAPTER 8: Playful Learning in Early Childhood ...................................................................... 83 Rachel A. Gordon CHAPTER 9: The American Research University: A Renewable Resource of Innovation .......................................................................... 90 Caralynn V. Nowinski and Lawrence B. Schook 5 Introduction By Robert F. Rich A return to y almost every measure, Illinois prosperity in remains in a fiscal quagmire. Even the state’s Bthough legislators enacted a large increase economy in personal and corporate income taxes in and in its early 2011, the pile of overdue bills still government amounts to about $4 billion and Illinois has will not come the largest unfunded pension liability of without any state in the nation. The state is sacrifice. borrowing from consumers, pharmacies, For progress dentists, physicians, universities and to occur, schools to whom money is owed. We have context of the current demographic, difficult more obligations than income (a structural economic, and political trends. In the deficit), a long-standing problem that choices and following pages, researchers from the continues to haunt us and make it very decisions Institute of Government and Public Affairs difficult to be optimistic about the future. and others from the University of Illinois must be explore some of the factors that have made. It took years for Illinois to reach these depths contributed to our state's current condition. of fiscal gloom. It will take years for Illinois While the economic and fiscal difficulties to emerge and gain economic stability. have become the state’s focus in recent However, as IGPA researchers Richard Dye, years, we also cannot overlook changes in David Merriman and the makeup of Illinois’ population that will Nancy Hudspeth show affect nearly every aspect of life in the state. in the following pages, We also must not lose sight of the critical there is reason to believe need to maintain a high-quality health care that good fiscal health system in the face of growing numbers of can return. uninsured and demands on Medicaid. Our state’s schools must continue to prosper, for There can be little doubt it is through a vibrant education system that for Illinois to that coming generations will be able to face recover fiscally, it must future challenges. recover economically. Innovation, education We are consistently reminded of the and training of a attributes that make Illinois a great state: superior workforce, and great wealth in terms of per-capita income, policies that enable our a robust transportation network, depend- state's businesses, able energy resources and hardworking, industries and corpora – resilient people. These assets remain despite tions to grow should the economic doldrums of the recent past. Robert F. Rich, always be our goal. Illinois must remain Director, This means that Illinois continues to have competitive and attractive. This is absolute- Institute of great capacity and potential for prosperity. ly key if we are to attract and retain business- Government and Public Affairs es, and if we hope to create new jobs. A return to prosperity in the state’s economy and in its government will not The Illinois Report 2012 examines the most come without sacrifice. For progress to 6 important issues facing this state in the occur, difficult choices and decisions must y o C c M y e s l e K With each Highlights from The Illinois Report 2012 include: difficult choice, • Analysis of data from the 2010 Census to those with a determine how population change is stake in that affecting the state. We also provide a particular focus on changing demographics among issue—no the Latino population in Illinois; matter what it • The aforementioned projections from our is—will rise to Fiscal Futures Project find that, under support or certain conditions, fiscal stability could oppose. Those be made. Our problems cannot be return to Illinois by 2019; who make the • A snapshot of the quality of health care addressed if we try to explain them away decision must as “it’s simply a revenue problem” or “it’s across the state; • An examination of the interconnections be willing to simply a spending problem.” Instead, we assume the risk will need strategies that will combine cuts of education policy in Illinois and how a associated with with generating revenue and possibly lack of coherence might affect outcomes some borrowing. With each difficult in the classroom; a tough choice. choice, those with a stake in that particular • Exploration of a concept known as issue—no matter what it is—will rise to Playful Learning, which provides an support or oppose. Those who make the interesting contrast to the “Three-R’s” in decision must be willing to assume the risk preschool that can make education in associated with a tough choice. They must later years more