State Treasurer Alexi Giannoulias will guest on Ray Hanania's radio show, Radio Chicagoland, Wednesday Dec. 19, 2007.
Visit www.RadioChicagoland.com for details
Giannoulias: Drive Clean, Save GreenHybrid buyers eligible for $1,000 rebatesJuly 15, 2007To combat rising gas prices, Illinois State Treasurer Alexi Giannoulias today unveiled a new statewide rebate program designed to make fuel-efficient hybrid vehicles more affordable.
Under the “Green Rewards” program, the Treasurer’s Office will partner with banks and credit unions throughout the state to issue $1,000 rebates to Illinois residents who purchase a hybrid or other energy-efficient automobile.
“Hybrid cars use less gas, but they cost more upfront,” Giannoulias said during a press conference at Grant Park. “Green Rewards entices Illinois residents to buy fuel-efficient, clean-burning vehicles by offering $1,000 rebates. This will help them recoup their investment faster while they save money at the pump.”
Green Rewards is the first incentive program to encourage hybrid purchases in Illinois. The program offers the largest state rebate for hybrids in the nation.
Giannoulias is pledging $2 million in Green Rewards during a statewide tour in his personal hybrid vehicle. The Treasurer’s Office will fund the program by depositing money at local banks and credit unions at a below-market interest rate. The money that those institutions save in interest is passed to consumers in the form of $1,000 rebates at the time of purchase.
To take advantage of the program, buyers must secure a car loan from a participating bank or credit union for a new hybrid vehicle or an eligible electric or fuel cell vehicle. Purchasers can receive one rebate per vehicle, allowing municipalities or other entities to receive additional cash back when acquiring fuel-efficient fleets.
Mayor Richard M. Daley endorsed Green Rewards, saying it complements Chicago’s commitment to protecting the environment.
“This is a great program that will encourage people to purchase hybrid vehicles which conserve fuel, save money and protect our environment by reducing harmful emissions,” Daley said. “In Chicago we are leading by example by purchasing City vehicles and buses that are hybrids or run on alternative fuels. Purchasing these types of vehicles will go a long way to help conserve and protect our valuable natural resources and our quality of life for future generations.”
Current hybrid cars can get up to 60 miles to the gallon on the highway and produce up to 80 percent less harmful pollutants and greenhouse gases than comparable gasoline cars. But they cost $1,200 to $10,000 more than their fossil fuel counterparts.
Studies show that the Ford Escape, Honda Civic, Toyota Camry and Toyota Prius all recover their price premium through fuel efficiencies after the first five years or 75,000 miles of ownership.
Fourth of July gas prices were 89 cents higher this year than two years ago. As of Friday, the price of regular unleaded gasoline in Illinois was $3.30, 25 cents more than the national average. If gas prices remain at this rate, average hybrid drivers could save $5,000 in gas by the time they drive 120,000 miles.
“For every dollar that is spent on the program, drivers will save $5 on fuel over the life of their vehicle,” Giannoulias said. “That’s a deal government should make every day of the week.”
Jack Darin, Director of the Sierra Club’s Illinois Chapter, supports the Drive Clean, Save Green campaign.
“The cars we drive in Illinois account for 26 percent of the global warming pollution we put into the atmosphere,” Darin said. “By rewarding car buyers who choose a hybrid over a gas guzzler, Treasurer Giannoulias' Green Rewards program will help more Illinois drivers get into a car that is part of the solution to global warming, while saving money at the gas pump.”
Giannoulias has ordered two hybrid vehicles to replace a pair of gas-only vehicles and will replace others with fuel-efficient models when their leases expire.
Hybrid and other fuel-efficient vehicles reduce harmful environmental triggers that contribute to asthma, said Harold Wimmer, President and CEO of the American Lung Association of Illinois-Greater Chicago. In 2003, approximately 20 million Americans had this chronic lung condition, which accounted for an estimated 12.8 million lost school days in children and 24.5 million lost work days in adults.
“I applaud the Treasurer’s Office for encouraging Illinois residents to proactively reduce their exposure to harmful environmental triggers that contribute to asthma, such as gasoline exhaust,” Wimmer said. “Hybrids are a clean air choice that will help to prevent lung disease and promote the lung health of all Americans.”
Illinois State Rep. John Fritchey believes Green Rewards will pay off for Illinois residents who want to save money and reduce global warming.
“This is a great example of what can be accomplished through innovative ideas and proactive leadership,” Fritchey said. “The Treasurer’s investment will result in financial dividends for people wanting to drive energy-efficient vehicles, and environmental dividends for all Illinoisans now and into the future.”
Green Rewards also received an endorsement from Howard Learner, Executive Director of the Environmental Law & Policy Center.
“Hybrid cars produce much less pollution and can save car buyers money over time because of high gas costs,” Learner said. “The State Treasurer's program provides a helpful incentive for purchases of these cleaner cars that help solve our global warming problems through technological innovation.”
Green Rewards is one of the State Treasurer’s Cultivate Illinois Agricultural and Environmental programs.
For more information contact:
(312) 814-1901 or (217) 557-6436 or cultivateillinois@treasurer.state.il.us.
State Treasurer overhauls 'Bright Start' $2.1 billion college savings program to become one of the most affordable in the nation;
New program manager commits millions
in scholarships to Illinois students
March 12, 2007
State Treasurer Alexi Giannoulias today named a new administrator for the state’s tax-exempt college savings program so Illinois families can earn more money to send their children to college.
The new program manager, Oppenheimer Funds, Inc., will significantly reduce the costs of Bright Start, making it among the lowest-cost programs in the nation, and will offer better investment options to gain a higher rate of return. In addition, Giannoulias negotiated $3.5 million in scholarship money that Oppenheimer will earmark for Illinois students planning to attend college.
Bright Start has come under criticism for its underperforming funds and high structural costs. Savingforcollege.com, an independent authority that analyzes college savings programs, recently ranked Illinois’ Bright Start program 47th out of 48 plans nationwide. Giannoulias is confident this overhaul will turn Bright Start into one of the best college savings plans in the nation.
“Stronger performing funds, increased investment options and lower fees will make Bright Start a vastly improved program for current participants and much more attractive to prospective investors,” Giannoulias said. “With costs of college skyrocketing, Oppenheimer will give Illinois families the biggest bang for their buck.”
Bright Start’s former program manager, Legg Mason, will complete its transfer of accounts to Oppenheimer within the next few months.
Scholarships
As part of its seven-year contract, Oppenheimer will allocate $3.5 million in scholarship money to college-bound students. The Treasurer’s Office is developing a selection process and criteria to award the $500,000 in annual scholarships to Illinois students from low- and middle-income families from every region of the state.
“The $3.5 million devoted to scholarships demonstrates the state’s and Oppenheimer’s commitment to support students who do the right thing, work hard and understand the importance of going to college, but require some extra financial help,” Giannoulias said.
Better Performing Funds
As one of the nation’s largest and most experienced money managers, Oppenheimer will offer Illinois residents an impressive portfolio lineup, which will include popular, strong-performing Oppenheimer and Vanguard funds. All of the underlying funds Oppenheimer will employ in Bright Start are currently ranked in the top quartile by Morningstar, Inc. and Lipper. Both Oppenheimer and Vanguard equity portfolios have outperformed the existing Bright Start portfolio during the past three years.
Along with its actively managed funds, Bright Start will offer a portfolio of index funds for the first time. Index funds seek to match the performance of specific stock and bond market indexes, such as the Standard & Poor's 500 Index. Index funds generally have lower fees than actively managed funds, which rely upon managers to buy stocks in an effort to outperform the market as a whole.
“Our Vanguard Index funds are safe investments that take the guess work out of investing at a much lower cost than actively managed mutual funds,” Giannoulias said.
Investors will have the option of choosing from different investments that provide exposure to three equity options – an S&P 500 index fund, a small-cap index fund, and an international index fund.
Current investors will have their assets transferred from existing mutual funds to similar actively-managed funds managed by Oppenheimer. The asset allocation and the percentage of the investments in stocks, bonds, international investments, etc., will remain the same. The Treasurer’s Office will notify all Bright Start account holders about the changes to the program and will provide information on how to transfer assets to index funds.
Costs and Fees
Giannoulias also announced significant reductions in the costs of Bright Start, which will make it one of the most affordable college savings plans in the nation.
“There is no reason why a college saving program with in $2 billion in assets should have such high fees,” said Giannoulias, referring to the old plan that required participants to pay a .99 percent annual fee.
Under the new plan, costs will vary from .19 percent to .21 for index funds and .53 percent to .64 percent for actively managed funds.
“High expenses can siphon off returns and limit financial gains that ultimately eat away at money that would have gone toward tuition,” said Giannoulias, noting that Morningstar criticized Bright Start’s high fees, saying they took up a “sizable portion” of fixed income returns.
Under the new contract, the typical Bright Start investor will save approximately $5,000 to $10,000 in fees. These figures are based on a family that contributes $3,000 per year for 18 years and earns an industry-average 8 percent return. Investors who choose Vanguard funds will save the most because the fixed index funds have a much lower expense ratio.
The Treasurer’s Office also negotiated break points in the new contract, which call for Oppenheimer to reduce Bright Start’s fees as investor’s assets increase. This will ultimately reduce the overall costs for individual participants.
Tax penalty
In addition to naming a new program manager, Giannoulias is seeking to pass legislation that will eliminate the tax penalty imposed on Illinois residents who invest in out-of-state 529 programs.
Illinois is one of two states that impose a 3 percent state tax on the earnings residents receive from 529 plans administered in other states, and residents must pay income tax on contributions to out-of-state plans.
“We should not punish Illinois residents because they want to get the most for their money,” Giannoulias said. “Illinois’ savings plan should attract investors based on its own merits and because it’s the best in the country, not because investors will get penalized if they go elsewhere.”
Giannoulias’ bill (HB 376), sponsored by State Rep. Jack Franks (D-Woodstock) and State Sen. James Clayborne (D-East St. Louis), to remove the penalties has won unanimous approval in the Illinois House and now awaits a vote in the Illinois Senate.
Nearly every state runs a college savings program, called a 529 plan after the section of the IRS code, which offers tax advantages to investors who use the money to cover the costs of higher education. Earnings on 529 plan investments are exempt from state and federal income taxes.
Bright Start, which was created in 2000, boasts more than $2.1 billion in assets and has more than 142,000 separate accounts.
Subscribe to Ray's
Join Ray Hanania on the LinkedIN network today
Follow Ray Hanania's Suburban Chicago Blog
