Monday, August 03, 2009

Problems with Proposed Lobbying Changes

One of the hit-or-miss bills that passed the General Assembly this year was SB 54, which, among other things, made substantial changes to the Lobbyist Registration Act (LRA). The genesis of the LRA portion of the bill is plainly found in HB 736, which ICPR supported, but SB 54 differs in some key ways.

One difference is the disclosure of lobbyist costs, and several recent news stories make clear how the differences between HB 736, which did not pass the GA, and SB 54, which did, will impact public policy discussion. In one news story, the federal government gave billions to the financial services industry, and the industry responded by spending dramatically more on lobbying. In another news story, Congress took up legislation to regulate student loans, and lo and behold, the industry hired a bunch of lobbyists to fight the proposals. A third national news story compares the progress of the debate over health care reform with spending by health care interests (noting, also, that health care interests combine to spend more on lobbying at the federal level than any other sector).

All of these stories are built around disclosure of lobbyist contracts. At the federal level, lobbyists are required to report how much they bill their clients. Indeed, spending on lobbying is often in the same ballpark as spending on elections. Interest groups that spend millions on campaign contributions to candidates often spend similar amounts to hire lobbyists to influence elected officials. Just as disclosure of campaign finance is in the public interest, so too is it in the public interest to let the public know how much an interest group is spending to influence legislation.

The Illinois General Assembly has yet to go that far in statute. HB 736, the bill that did not pass, would have mandated disclosure of lobbying costs, but SB 54 did not include that provision. This was a missed opportunity to help the public better understand how particular interests are trying to sway the General Assembly.

Another provision in SB 54 that did not come from HB 736 raises the registration fee for lobbyists. And the increase is a whopper. Currently, most lobbyists pay $350 per lobbyist per year to register with the Secretary of State (non-profits, including ICPR, pay $150 per lobbyist per year). SB 54 raises that fee for all lobbyists, including non-profits, to $1,000. For most lobbyists, it's a steep increase; for non-profits, it's a huge added cost.

The increase is particularly steep because of the way that lobbying is defined. Generally, anyone who communicates with officials to influence legislative, executive, or administrative actions is a lobbyist. There are exceptions, of course (it's statute, after all) but broadly, once you are paid or reimbursed $500 for such communication, you become a lobbyist and must register. Which is to say, once you are paid or reimbursed $500, you must pay $1,000 to register. And the entity that paid or reimbursed you the $500 must also pay $1,000 to register. That's $2,000 in registration fees for $500 in reimbursements. Large lobbying firms will likely be able to absorb these costs, but smaller groups, especially non-profits, will have a harder time.

SB 54 increases the registration fee in order to cover additional administrative costs, but some of the cost of registration (the $200 difference between the for-profit and non-profit rate) goes into the General Revenue Fund. It seems that the state is still using lobbyist registration fees to produce income for the General Revenue Fund.

Both of these changes are unfortunate components of the new Lobbyist Registration Act. Gov. Quinn, or the General Assembly, would do well to revisit them.

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