The Problem
Illinois faces $6 billion in unpaid bills with an unemployment rate over 11 percent—the highest in 27 years. The state pension system is underfunded by $80 billion, and the state’s bond rating ranks second lowest in the country.

In response, Governor Pat Quinn’s proposed fiscal year 2011 budget would raise income taxes by 33 percent and increase top line spending by $3 billion. Budget Solutions 2011, the Illinois Policy Institute’s balanced budget solution, offers an alternative by addressing three key areas of reform: spending realignments, right-sizing government labor costs, and pension funding reform.
One key spending realignment featured in Budget Solutions 2011 concerns the recommended closure of the Department of Commerce and Economic Opportunity (DCEO). According to DCEO’s mission statement, the department is “the lead state agency responsible for improving Illinois’ competitiveness in the global economy,” and responsible for “creating and retaining high quality jobs and building strong communities.”

In reality, much of the DCEO’s work is duplicative of services already offered by the private sector. For example, Illinois businesses already exist to provide other Illinois businesses with services like global marketing and technology support. The DCEO does not need to play a role in these areas, and may even be taking away commerce from other Illinois companies.

Additionally, a considerable amount of DCEO’s spending is superfluous when the state is billions in the hole. Examples of unnecessary DCEO spending include:


$100K to Help Celebrate Canadian 4th of July
The Illinois Department of Commerce and Economic Opportunity (DCEO) gave a $100,000 grant in fiscal year 2010 to the Western Illinois Tourism Development Office in Macomb to help “with the costs associated with hosting the Canadian 4th of July Celebration.” The DCEO’s grant tracker says the grant’s (#10-372010) purpose is “to assist with costs associated with attracting international tourists to Illinois attractions and events.”

Money Given to Increase Awareness of Illinois, Chicago in Ireland.
The DCEO gave a $50,000 grant in fiscal year 2009 to the Chicago Convention and Visitor’s Bureau to “increase awareness of Chicago and Illinois in the Republic of Ireland.” The DCEO’s grant tracker says the grant’s (#08-372010) funding will come from “a portion of the state’s hotel-motel tax revenue.”

$250,000 to Western Kentucky Carbon Storage Foundation
In 2009, the Department of Commerce and Economic Opportunity gave the Western Kentucky Carbon Storage Foundation a grant worth $250,000.00. Western Kentucky Carbon was created when “Peabody Energy, ConocoPhillips and E.ON U.S. formed the non-profit Foundation to work with the Kentucky Geological Survey in a project that includes drilling a well to test the Knox and Mount Simon geological formations at a site in Hancock County.” The grant from the Department Commerce was used to fund “a test well to research the permanent storage of carbon dioxide (CO2) deep underground in western Kentucky.”

$10K to Update Route 66 Gas Station
The DCEO gave a $10,000 grant in fiscal year 2009 to Ryburn Enterprises in Normal to “assist in the restoration and preservation of a 1930’s gas station, garage, and restaurant.” The DCEO’s grant tracker explains the grant’s (#09-335011) purpose is to promote tourism in the area, as the old and outdated buildings lie on the historic Route 66 highway.

“Chocolate-Themed Meals” Given a Boost From Taxpayers
The Blackhawk Waterways Convention and Visitors Bureau in the town of Polo received $1,272.88 for advertising “bed & breakfasts that specialize in chocolate-themed meals.” The DCEO’s grant tracker explains this grant’s (#10-361014) purpose is “based off of the increased interest in culinary tourism, it is clear this promotion strategy will promote more tourism to the area.” The DCEO’s grant tracker also shows a total of $219,067.00 in the last two years going to the Blackhawk Waterways Convention and Visitors Bureau to promote tourism in the area in other ways.

$100,000 for Touch Screen Kiosks in Springfield
The DCEO gave Downtown Springfield Inc. $100,000 for touch-screen kiosks to “provide information on local historic sites, restaurants, retail shops, services, hotels, recreational facilities, maps of downtown and other services.” The web-based informational kiosks are located at Eighth and Adams streets, near the Prairie Capital Convention Center, and at Sixth and Madison streets, near Union Station and the Abraham Lincoln Presidential Museum. As of June 29, 2010, neither kiosk computer was operational. The DCEO’s grant tracker also says the grant (#08-203453) will provide for hiring a part-time employee “to serve as an information/data input operator to collect and post information.”

Our Solution
The Department of Commerce and Economic Opportunity should be eliminated.

Why This Works
Despite DCEO’s intended mission of fostering economic activity, Illinois compares poorly with most states on economic growth. The American Legislative Exchange Council ranked Illinois 48th for Economic Performance and 47th for Economic Outlook in 2010. Additionally, Illinois ranked 48th for Non-Farm Payroll Employment Growth from 1998-2008, and 48th for Absolute Net Migration from 1999-2008. These are not promising rankings, and they clearly show the DCEO is not fulfilling its mission.

The Department of Commerce and Economic Opportunity’s activity overlaps services provided by the private sector, and many of its grants are of dubious value. Eliminating the DCEO would provide one much-needed route to ending unnecessary, wasteful spending of taxpayers’ dollars in Illinois.