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* 1:15 pm - Nobody is completely sure whether this is true or not, so the lead-in is more than a little misleading…
On the eve of the General Assemby’s special session in Springfield, two prominent Illinoisans who helped draft a 31 billion dollar capital spending plan are pleading for its passage.
WBBM’s Regine Schlesinger reports that otherwise, Illinois stands to lose 9-billion dollars in federal money.
The story (which gets the size of the capital bill wrong) appears to be based solely on a press release sent out by the governor’s office late this morning…
…[Hastert and Poshard] stressed that further delays in passage of a comprehensive capital bill could jeopardize nearly $9 billion in federal funds dedicated to infrastructure projects in the state.
Over the past two weeks, several members of Congress have warned about the accelerated depletion of the federal Highway Trust Fund, which contains matching funds for statewide infrastructure enhancements. Due to the recent decrease in federal gas tax revenues, current projections estimate that the fund will empty in 2009 with a $1-3 billion deficit.
At an April 2 Surface Transportation Hearing, Congressman John Olver, Chairman of the House Appropriations Transportation, Housing and Urban Development Subcommittee said, “…the most immediate challenge the Congress will face is the solvency of the Highway Trust Fund. The Highway Trust fund will go broke in fiscal year 2009 and the future viability of federal transportation financing is in doubt.”
The question I’ve been asking without receiving a satisfactory response lately is if the money isn’t going to be in the Highway Trust Fund anyway, how does Illinois get its share even if the General Assembly approves a funding bill tomorrow?
* 3:14 pm - From a press release…
11th Congressional District candidate Marty Ozinga announced Wednesday that his campaign had raised over $800,000 in the 2nd Quarter of 2008, his first fundraising quarter as a candidate.
As a demonstration of his commitment to the campaign, Ozinga donated $70,000 to his own cause in early April, pushing his total receipts for the quarter over $870,000. […]
Ozinga was overwhelmed by the strong showing of grassroots support. He received about 1,000 contributions, and nearly 60% of them were for $250 or less.
Well under 10% of Ozinga’s total came from PACs. By contrast, nearly half of his opponent’s total through March 2008 has come from PACs.
Ozinga is running against Democratic state Sen. Debbie Halvorson. The Dems had already penciled this one in as a win, but she looks to be in for a big rumble.
posted by Rich Miller
Tuesday, Jul 8, 08 @ 1:16 pm
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By a series of $25,000 checks?
Comment by Anon Tuesday, Jul 8, 08 @ 1:30 pm
If Olver’s statement is factual, it makes the gas tax holiday proposal appear even more ridiculous. The feds should adopt IL’s gas tax scheme based on a percentage of the price, not a flat amount.
Comment by The Doc Tuesday, Jul 8, 08 @ 1:33 pm
Precisely….who did you say prepared the press release?
Comment by downhereforyears Tuesday, Jul 8, 08 @ 1:35 pm
If Illinois has its state match on the table when Congress addresses the underfunding issue it will likely get its dough. If it doesn’t, why would Congress want to cut Illinois in on new funding when there is not enough funds to cover the projects that are committed to now? Wouldn’t play chicken with this one. Can you see Durbin having to fight a second time for the Illinois share under the old authorization with a new authorization pending. Another disaster for the democrats running this state.
Comment by Put up or shut up Tuesday, Jul 8, 08 @ 1:43 pm
There are two issues here.
One, is there a sunset on the federal appropriation? While there have certainly been scare tactics used that a deadline will come, there has seemingly been no definitive answer on this.
Two, will the fund run out of “real” money? If there is no sunset, but the fund is depleted, most likely the federal government will just borrow the money to meet their commitments.
So, either way it seems unlikely that there is any “immediate” necessity to access federal money.
Comment by Balance Tuesday, Jul 8, 08 @ 1:45 pm
Passing the capital bill does not trigger the match anyway, its the actual spending of money on the road projects. Since the projects would not be in play until closer to 2009 if not 2009 itself, how can they say there is any money available for IL?
More importantly, we can not trust the Gov to release or spend the dunds, or not to misues the approp to squeeze money out of contractors. We need to deal with that problem before we pass the funding.
Comment by Ghost Tuesday, Jul 8, 08 @ 1:52 pm
There is no ‘real’ money….it’s all borrowed. The quote from Olver (D-Taxachusetts) is ‘prepared remarks’ from a subcommittee hearing complaining about the Bush administration ‘underfunding’ the highway bill. There is no bigger threat of losing federal funds than there was the first time the ‘Illinois Works’ bi-partisan coalition took the stage.
Comment by Vote Quimby! Tuesday, Jul 8, 08 @ 1:53 pm
I have a call in to Durbin’s office. Hopefully, we can get a straight answer.
Also have a call in to Obama’s people.
Comment by Rich Miller Tuesday, Jul 8, 08 @ 1:58 pm
This is a canard, this idea that the state will lose the federal money if the state doesn’t approve it’s budget. From what I’ve noticed, the Republicans have been putting it out there.
Comment by P Tuesday, Jul 8, 08 @ 2:03 pm
It’s a trumped up scare tactic designed to pressure Madigan into passing the bill.
It’s not a crisis, but they want us all to think it’s a crisis to instill some urgency. That’s why you can’t get a straight answer, Rich. It’s hard to fully and specifically explain b.s.
Comment by Truth Tuesday, Jul 8, 08 @ 2:11 pm
It is time for the interests of the people to be served by the passage of a Capital spending bill Mr. Madigan and Blago…put in checks and balances so the government (all branches-especially executive) don'’t turn this into a feeding frenzy…
Our infrastructure is crumbling as are our public buildings and transportation systems…this in turn hurts our economy and business climate…
Put away your chicken suits and do the right thing for once…
Comment by Anonymous45 Tuesday, Jul 8, 08 @ 2:20 pm
Another question is that, if the federal trust fund is $1-3 billion short, and IL has billions of potential Federal-Aid projects “on the table” that it has not leveraged yet, what is the true shortage if all states were to suddenly put their eligible projects forth for the federal match? If this is the case, things may be even worse than they seem.
OR (more likely, IMHO) is the $1-3 billion federal shortfall “on paper” and based on all states’ projects 100% ready and match-funded (which they most certainly are not)? In that case, the theoretical shortage may not really be a shortage at all, if you’re talking about this years’ and next years’ federal cash flow.
I have heard that there is a recission provision in the federal SAFETEA-LU bill (which may threaten “some” but not all of unexpended funds at the end of the bill’s term in 2009) but I am not about to go through several hundred pages of legislation to find it and interpret it. Maybe someone who works at IDOT finance or Federal Highways knows the answer.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 2:21 pm
I guess the safe play is to vote Obama and Durbin. A president and a big dog in the Senate ought to do the trick.
Comment by wordslinger Tuesday, Jul 8, 08 @ 2:23 pm
lol
Hope is not a plan.
Comment by Rich Miller Tuesday, Jul 8, 08 @ 2:27 pm
Doc 1:33-
IL does NOT have a “gas tax” based on percentage of price. IL’s Motor Fuel tax is fixed at 19c a gallon and 21.5c a gallon for diesel. IL does have a state sales tax of 6.25% that applies to most items including gasoline, but that money does NOT go into the road fund; it goes into the general fund.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 2:28 pm
From what I understand…
The money is there now, but if we dont act now it could possibly run out by the time Illinois gets its act together.
If Illinois isnt able to match the federal dollars this year then other states who can match will get priority on the money. Weve got to act now or the money will be gone say in late 08 or early 09.
Comment by The Feds Tuesday, Jul 8, 08 @ 2:29 pm
Thanks, Six. That comment got by me somehow.
Comment by Rich Miller Tuesday, Jul 8, 08 @ 2:29 pm
My mistake - thanks Six.
Comment by The Doc Tuesday, Jul 8, 08 @ 2:31 pm
==Hope is not a plan.==
It’s not? Ruh-roh.
Comment by wordslinger Tuesday, Jul 8, 08 @ 2:38 pm
You mean hoping the lottery lease doesn’t end up sticking us in the wallet is not a plan?
Comment by Vote Quimby! Tuesday, Jul 8, 08 @ 2:41 pm
TF, you’re not the feds, but whatever.
There are tons of hedges in your comment, but let’s just say for argument’s sake that it’s mostly true. So, if the governor is extremely concerned about this potential problem, then I have a few questions that have yet to be answered…
1) Why stick by a massive gaming expansion bill that is opposed by Mayor Daley?
2) Rep. Hannig claims there’s enough money in the state’s Road Fund and other bonding sources to capture much of that $9 bil right now. True?
3) If this is so important, and I agree it is, then why propose a Lottery lease that was (in a similar form) overwhelmingly rejected by the House?
4) Why were some House members told by IDOT that they could look at the project lists but could not take the lists out of the room? Doesn’t exactly encourage a whole lotta trust.
There are others, but we can start with those.
Comment by Rich Miller Tuesday, Jul 8, 08 @ 2:44 pm
Gov. Blagojevich’s spokesperson-of-the-week answers Rich Miller’s questions:
1) Now that we have conquered smoking in casinos, gaming is now healthy for all!
2) While the federal match is important not to leave on the table, the hardworking people of Illinois deserve to have all of these projects completed and 600,000 jobs. So to get $9 billion we must spend $31 billion. Just like the Cubs… you’ve got to spend to win.
3) Now that the public knows how vital an issue this is, lawmakers should do the will of the people and pass this jobs bill. Because I won’t be in office when the bad news hits and there is no lottery income for ‘education.’
4) Our administration has taken into consideration the importance of these projects to lawmakers and shared the information with them. However, we don’t want our enemies to be able to prove this down the road when we need their vote.
Comment by Vote Quimby! Tuesday, Jul 8, 08 @ 2:52 pm
Does the Road fund need to be flush to capure the Fed match or can we spend based upon projected revenue? Seems like a good opportunity for compormise would be to pull out the 9 bil in fed projects.
on a side note, fed funded projects come with all kinds of rules. IDOT and CDB often include requirements on projects that violate fed rules and prohibit the Stae from getting the matching funds. So how many of the capital projects are truly eligible for fed matching funds by having the State give up some of its requirments?
Comment by Ghost Tuesday, Jul 8, 08 @ 2:52 pm
Here’s another one for you, Rich…
The state’s highway and transit programs rarely exceeds $3 billion a year, even when the federal funding component is thrown in. Does this “$9 billion” figure, on top of the state/federal spending that is already accounted for, mean that we have 3 times our annual program waiting to be leveraged, in nearly the last year of the federal transportation bill? I think the $9 billion includes some money we’re already spending or are going to spend regardless of a capital plan.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 2:55 pm
It is amazing that Hastert and Poshard seem to be the only people privy to the rules and availability of federal funding, and that everyone else (not a hyperbole) seems to be at a loss for the reality of the situation. But bureaucracy is designed to mystify not clarify.
Comment by anon Tuesday, Jul 8, 08 @ 2:56 pm
I’ve asked Poshard’s people for a clear explanation for why, exactly, Illinois will supposedly lose out on this money and have never been given an actual answer.
Comment by Rich Miller Tuesday, Jul 8, 08 @ 3:00 pm
Ghost-
I am not aware of anything the state does to prevent its projects from being federally-eligible. That would be counter-productive, as you always want to go after the most restrictive funding sources for your projects and work your way backwards when the restricted pots run out. The state sometimes uses straight-state funds to avoid federal red tape, especially on engineering studies and land purchases.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 3:01 pm
A point of clarification is needed because both the story and press release are misleading - surprise! The federal $9 billion Illinois is due is only for eligible federal highway and related transportation projects. My guess is, the $34 billion capital plan includes a lot more that has nothing to do with highways or transportation such as “urban renewal.” If the problem is losing $9 billion in federal highway and transportation funds, then all Illinois needs is a capital plan that represents the State match to this $9 billion, or about $2.5 billion. That amount is within reach.
Comment by Sir Reel Tuesday, Jul 8, 08 @ 3:05 pm
Six the State can require contractors to sign onto what amounts to a master union contract for all employees on the worksite (even if they are not in the union)(I have forgotten the technical terms for these master agreements). This requires the employers to pull out union retirment, dues etc from the employees. The Feds prohibit this requirment, so if you put it on a project, you lose fed money. I am ware of a couple of projects in IL where the State elected to go without fed funds so that they could include this requirment. One invovled improving infrastructure leading to and around a casino.
Comment by Ghost Tuesday, Jul 8, 08 @ 3:07 pm
===or about $2.5 billion. That amount is within reach.===
And, from what I understand, doable with current Road Funds.
Comment by Rich Miller Tuesday, Jul 8, 08 @ 3:08 pm
The best questions for Durbin, Speaker Denny or Froggy are:
1. why did they dump a plan opposed by the City on the legislature?
2. Doesn’t the state really need to slip about $20 million a year out of the growing road fund balance to match the first phase of the fed bucks earmarked for IL?
3. Would Sen. Durbin — the nation’s #2 Senator — allow IL to get the shaft in the fiscal year begining in October?
4. Would President Obama allow IL to get the shaft?
5. Are they happy the sleazes at Bear Stearns aren’t involved in the new gambling deal
Get back to us with the answers pronto.
Comment by DumberThanYou Think Tuesday, Jul 8, 08 @ 3:08 pm
Poshard’s people are probably on Google looking for an answer to copy.
But seriously, folks,
Illinois needs not only the infrastructure repairs and improvements but the stimulus that all of those good jobs would provide. How do we fund it? Obviously, not by leasing the lottery, trying to rape Chicago for the cost of a new casino, or putting slot machines in tracks. Sweeping existing surplus monies from special lobbyist funds is a start. Follow that up with an income tax increase of 1% and extend sales tax to services and, viola, we’re done. Pay as you go should make everyone happy, even the repubs who will be needed to override the veto. Let’s get to work and get it done.
Comment by Bill Tuesday, Jul 8, 08 @ 3:16 pm
There is enough money now at IDOT to make the federal match (what is it , 10%?). Rep. Hannig is correct on that. Illinois does not need the capital bill/gambling expansion to do it. Can the Trust Fund be going broke with gas prices approaching $5 a gallon?
Comment by Legal Eagle Tuesday, Jul 8, 08 @ 3:27 pm
=== Sweeping existing surplus monies from special lobbyist funds is a start. ===
I have to agree with that one. I still do not understand the hestiancy to have the special interests money included in GRF along with the rest of the money the people of Illinois pay.
Comment by Ghost Tuesday, Jul 8, 08 @ 3:28 pm
LE, the state match is higher than that and the gas tax is based on gallonage, not price.
Comment by Rich Miller Tuesday, Jul 8, 08 @ 3:31 pm
Ghost- I think you are referring to a Project Labor Agreement, which Federal funds are prohibited from being expended on. If I understand, only a handful of otherwise federally eligible transportation projects use these PLA’s. They were basically a bone thrown at the trade unions.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 3:52 pm
Legal Eagle (LE could also be Little Egypt, Rich)
Federal Highway Trust Fund is a fixed 18.4 c a gallon, whether gas is $1 or $4. Nearly 3 c comes off the top for the Transit Account, and the rest goes to highways and some other tiny funds. It’s a tax or user fee (whichever you prefer) that has been seriously declining as a percentage of the purchase price, as opposed to most other taxes or fees lately that have kept pace with or outran inflation.
And the usual state match for federal highway funds is 20%, not 10% except for “legacy” interstate routes built on the original interstate system before the 1980’s. Federal transit fund matches can be as high as 50/50.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 4:01 pm
Ghost-
Just checking, out of 370 Highway and Aeronautics projects on the June 2008 statewide letting, 15 had Project Labor Agreements.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 4:18 pm
There is no immninent loss of $9 billion, and Hastert, Poshard, and the Governor know that. They just want to scare people into action, so that is why they are not giving straight answers.
Federal money that has come to Illinois in the form of earmarks or formula funds (which is where most fed money comes from) is staying in Illinois. It isn’t going anywhere, and it does not have to be used before the next “TEA bill” - Beltway code speak for a highway and transit measure - is written. There are many chicken littles out there who cry that the money will be reallocated, but out of Congressional courtesy Congress does not take money from old projects.
Where some money is lost is in delaying the start of projects, as the cost of concrete and steel is rising 10% percent a year. But the cost delay doesn’t amount to $9 billion.
There are also people out there who say that northeastern Illinois will lose federal transit money if we don’t pass a capital bill to provide a local match for RTA transit expansion projects - that could be where the $9 billion figure is coming from. While there are 10 RTA projects worth $8 billion proposed, maybe - at best - one to two of those projects will be selected for federal funding in the US DOT’s competitive transit funding process. Why? Because there is just $6.6 billion nationally set aside for all transit expansion projects over five years.
By the way, local matches for highway and transit projects is a minimum of 20%.
Comment by Radical Moderate Tuesday, Jul 8, 08 @ 4:19 pm
Dumber 3:08:
Item #2 - The logic of a “growing road fund”, presumably the state’s Motor Fuel Tax account, escapes me. Everything I’ve heard is that statewide traffic counts in 2008 are down from 2007. Add in that people are buying more fuel-efficient cars these days, and the only logical explanation is that the state is holding the money instead of spending it on roads or diverting it to SoS, State Police as compared to last year.
Items #3 and 4 - See Rich Miller, 2:27 pm
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 4:26 pm
Scare Tactics - More like money for the “Rod Blagojevich Defense Fund”.
Comment by It's a Mystery Tuesday, Jul 8, 08 @ 4:40 pm
Just a note….there are consequences to sweeping the ==special interest funds== just ask any owner of an old gas station where the money is to help clean up the soil. I’m sure there are better examples, but this idea of ‘free money’ laying around is a bad one. If they’re that bad, why not abolish them to avoid the temptation?
Comment by Vote Quimby! Tuesday, Jul 8, 08 @ 4:42 pm
=== Sweeping existing surplus monies from special lobbyist funds is a start. ===
Oh Bill, come on. That is a rather “sweeping” generalization, dontcha think? Somehow, AA doesn’t feel that the retired teachers, crime victims, and gas station owners, all of whom had their money swept by the big Filan broom last time, are “special lobbyists.”
Further, “Surplus” is in the eye of the beholder. In the case of the retired teachers, they had just finished a renegotiation of the financing for their insurance program that required about $5 million per year in additional retiree contributions. The next day, Filan hits the insurance fund for, you guessed it, $5 million.
I agree with VQ-if there are too many funds, or surplus balances, go through the front door, and legislatively take them off the books.
Rich, while you’re asking questions, AA has a couple:
How is the budget hole caused by no POBs going to be filled?
Speaking of POBs, how much would the State have lost if they had sold that $26 billion load a year ago?
Comment by Arthur Andersen Tuesday, Jul 8, 08 @ 5:48 pm
Rich, I have sent an e-mail to you regarding Federal road funds with names of people and phone numbers you can contact to hopefully get the real story on what the State will lose, if anything, in Federal funding. Good luck.
Comment by Little Egypt Tuesday, Jul 8, 08 @ 7:30 pm
Six Degrees - I am not Legal Eagle. My legal expertise is limited to doing an on-line will, and not a good one at that. I’m pretty sure Rich has the ability to see who is who and where we are posting from.
Comment by Little Egypt Tuesday, Jul 8, 08 @ 7:38 pm
Little Egypt-
Thanks for the clarification…when Rich used the initials LE in his 3:31 post to refer to Legal Eagle, I immediately thought of you. Such is your fame here that you are known by your initials
Comment by Anonymous Tuesday, Jul 8, 08 @ 9:24 pm
9:24 Anon post is by SDoS.
Comment by Six Degrees of Separation Tuesday, Jul 8, 08 @ 9:25 pm
Us all and our secret posts - bet some of you guys and gals also have secret handshakes! :.)
Comment by A Citizen Tuesday, Jul 8, 08 @ 11:30 pm