Worthington
Senior Lecturer Paula Worthington

A lecturer at Harris School of Public Policy since 2004, Paula R. Worthington teaches state and local government and cost-benefit analysis classes. As academic director of Harris’ Policy Labs, she also develops and runs school-wide experiential learning programs for second-year students. Nine times since joining Harris, Worthington has been voted Best Teacher in a non-Core course.

Additionally, while on leave in 2017-18, she was a senior economist at the Council of Economic Advisers in Washington, D.C. In that role, Worthington prepared research, policy analysis, and written materials across various policy areas to provide superior, objective economic analysis to the Executive Office of the President.

State and municipal fiscal policies—particularly those related to good governance and responsible financial policies—are her top interests. In this conversation, she offers insight on restoring public transportation, two extensive federal infrastructure initiatives, the fiscal challenges of marijuana legalization, and what excites her most about teaching.

Chicago soon will have a new mayor, Cook County Board Commissioner Brandon Johnson, a former Chicago Public Schools teacher and Chicago Teachers Union organizer. What policy implications can you draw from his election?

It seems evident that voters prioritize having a new mayor who is going to bring new energy to solving longstanding problems and challenges for the city in crime, education, finances, and fiscal affairs. I’m a city resident and like other city residents, I'm looking forward to seeing what Mayor-elect Johnson prioritizes and what first steps he's going to take.

In terms of the narrower component of infrastructure, our city has these sort of sister agencies—the CTA, for example. A big, open question is how we are going to get ourselves through and past our post-COVID recovery. And, while Mayor-elect Johnson is not directly running or responsible for what that agency does and what its umbrella agency—the Regional Transportation Authority (RTA)—does, you aspire for a world in which the choices the transit agencies make are aligned with the choices the city is making.

Public transportation faces a number of challenges that the COVID pandemic exacerbated. Among those are ridership numbers that continue lagging well below pre-COVID rates. Also, general skepticism seems to exist about whether mass transit can function effectively here. What can be done?

Chicago has a lot in common with other U.S. cities experiencing public transportation ridership decline—places like New York, Philadelphia, and the San Francisco area. When you combine that slow recovery with the fact that, in our region, fares historically have covered a significant amount of our operating budgets, you reach an almost existential crisis for our local transit agencies: sluggish ridership numbers also mean lower farebox revenues.

What makes this time interesting is that transit agencies, planning organizations and other stakeholders are really pushing for more creativity—using state and local funds, for example—to support public transportation. We also need to explore allocating tolling or road use charges from drivers on some roadways to support the transit system. Creative alternatives like those and others probably will be part of the solution. And they’re relevant because transit is crucial to making our urban areas work.

chicago
Chicago is experiencing similar problems with public transportation ridership decline alongside other major cities. 

You’ve been deeply involved in policy for some time. Have you seen policymaking change much in recent years?

In certain settings, we have moved toward more appreciation for and reliance on evidence to guide our policy choices and policy decisions. I see our work here at the Urban Labs playing important roles in that. We’re really focused on generating high-quality evidence on the impact of a particular policy or program or intervention, and definitely have had some real victories where we do a high-quality study, learn something, and then that informs choices on what programs to change. Right now, for example, the Inclusive Economy Lab is conducting all the randomized control trial evaluations of the income assistance programs that the city of Chicago and Cook County are doing. I’m excited that there’s an appetite for that kind of work.

Another observation I’d make is that in the last ten years, we see greater awareness of equity and disadvantage and how we think about programs that, in principle, don’t have any necessarily obvious impacts there. But, when we start to peel back the layers of the onion, we find real issues.

The $1.2 trillion Infrastructure Investment and Jobs Act of 2021 is being touted as the most comprehensive infrastructure investment in 70 years. That was followed in 2022 by the $770 billion Inflation Reduction Act, which invests heavily in green infrastructure. How would you characterize those measures?

The Infrastructure Investment and Jobs Act is a fairly traditional piece of legislation. A lot of the money is being sent to states based on various formulas and is being spent on traditional hard assets in transportation—roads, bridges, those sorts of things. The Inflation Reduction Act was very different in that it really prioritized directing funds to decarbonization, clean energy, things like that. One characteristic that makes it different is that most of the assets in that space are privately owned. That means the Inflation Reduction Act will be using things like tax credits and subsidies to incestivise private entities to move further into clean energy. 

Anything stand out about Illinois’s effort on decarbonization and clean energy?

Pritzker
Governor JB Pritzker

My impression is that Governor JB Pritzker has really embraced the electric vehicle space. He’s trying to make sure Illinois gets its fair share of what federal money is out there and trying to bring state resources to bear to develop that sector for us and make that transition happen sooner rather than later.

One thing I would mention is that the Infrastructure Investment and Jobs Act included a little space for developing pilot programs that experiment with vehicle miles traveled charges or road use charges. Electrification of our vehicle fleet means gas revenues are falling and will continue to do so. To replace that, states may have to charge vehicles for their use of publicly provided roads and other surface transportation assets. I’d be excited to see our state learn from those experiences so that we can ultimately promote something that makes sense.

Green infrastructure and the transition to clean energy are parts of your broad interest in infrastructure. What are your thoughts on what it’s going to take to shift to full or near full decarbonization?

It really is about providing the right incentives for users, producers, and researchers to accelerate their efforts to decarbonize. What is that going to mean? We need more research on various things related to storage and batteries. We also are anxious about supply chain concerns and access to certain materials that are only available in certain jurisdictions and under certain conditions. So, there's going to be a lot to sort through there. Beyond that, we have to continue encouraging consumers to make clean energy choices, particularly in the vehicles we drive.

Tax revenue from legalized marijuana in Illinois jumped 50 percent to $445.3 million last year from the year before. Tax disbursements to local governments rose 77 percent to $146.2 million over the same period. Is legal weed a success story in Illinois or is it best to wait a few years before making a conclusion?

Illinois is still a little bit in the honeymoon period where it’s trying to take what was an illegal market and move it into a legal setting, which allows it to be regulated and taxed. And our state has made some interesting choices about spending some of the money on individuals and communities that have been harmed by our previous legal regime.

Having said that, I’m not a fan of building a public finance regime that relies too heavily on cannabis taxes, gaming taxes, alcohol, cigarettes, and things like that. Some of those activities create costs on the individual and costs on others. Generally, a healthy public finance structure is one in which you have a diverse set of revenue streams. And when it comes to cannabis, I’m a little anxious, honestly. We don’t know yet the full public health consequences of a material increase in consumption and availability, and we don’t know the consequences of surrounding states’ legalization.

With your extensive experience in government fiscal analysis and policy, it seems necessary to ask you about the state of Illinois’s pension crisis. Illinois Answers, a Better Government Association journalism and data outlet, reported recently that the state’s unfunded pensions total nearly $142 billion. Do you envision a scenario where this gets resolved?

One observation to make is that the state is not nearly as vulnerable as the city of Chicago, in terms of having cash on hand to pay out promised benefits over the near and medium term. Another thing I’d mention is that the Illinois State Constitution’s Pension Protection Clause is pretty tight. I don’t envision any material, retroactive changes to the benefits retirees will receive from the state.

What it would take to resolve is a restructuring and commitment by the state legislature to fund those liabilities more fully. That puts a lot of pressure on our demand for other services that we expect the state to provide. I don’t have a magic elixir there.

You’ve been voted Best Teacher in a non-Core Class for nine of the years you’ve taught at Harris. What excites you most about teaching?

Especially these last five or six years, I have felt the most passionate about and most vested in situations where I can work with a small number of students in a group on a project, like I do in the Harris Policy Labs. When we’re actually confronted with the here and now of a particular situation with all these imperfections and inconsistencies, and we have to decide what to do and how to make our case compelling, that’s where I feel like you’re pulling it all together. We've been able to work with a number of nonprofit entities or public sector clients, including the RTA, the Chicago Metropolitan Agency for Planning, and the Metropolitan Planning Council on a variety of infrastructure and urban development challenges. I’ve worked with students on projects related to lead service line replacements, water utilities, urban flooding, and transit issues. What students can accomplish in a short quarter is just amazing.