Capitol Fax.com - Your Illinois News Radar » 2008

Repubs say HDem budget has $2 billion hole - and climbing

Wednesday, May 21, 2008 - Posted by Rich Miller

* 2:14 pm - The House Republicans are claiming on the House floor that the House Democratic budget for next fiscal year has a $2 billion deficit - and they’re not even finished voting on the agency budgets. Listen or watch here.

* 2:19 pm - For some background, this is what happened earlier today…

The House voted 63-51 Wednesday for the main operations budget that would keep state government running, then planned to vote for a more expanded version.

But whether this proposal or something like it will become the state’s next budget remains far from clear.

That’s because Senate Democrats are preparing their own budget plan that could be more modest than what the House supports.

* 4:00 pm - The House Democratic budget deficit is up to $3.1 billion and rising as of now according to the House Republicans

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Protected: SUBSCRIBERS ONLY - Is Froehlich Blagojevich’s best friend?

Wednesday, May 21, 2008 - Posted by Rich Miller

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Question of the day

Wednesday, May 21, 2008 - Posted by Rich Miller

* This help wanted ad at CareerBuilder for a new press secretary for Gov. Rod Blagojevich has been making the rounds…

Position Responsibilities:

* Build and maintain relationships with members of the press
* Act as a spokesperson, proactively pitching stories and developing/delivering reaction to reporters’ inquiries
* Collaborate with Governor’s press staff and agency press officers to generate ideas and develop media strategies

* OneMan adds these…

* The ability to keep tabs on Rich Miller
* Know how to look up synonyms for unrelated and coincidence.
* Finally the ability to say “He isn’t public official A” with a straight face

* Chicagoist chimes in…

* Must maintain working knowledge of all Elvis and Hank Williams songs
* Must be skilled with hair spray
* Must be able to “forget” things or “misplace” information
* Must be able to never, ever, mention the name “Rezko”

Your turn.

47 Comments

Another pension bond deal? Maybe

Wednesday, May 21, 2008 - Posted by Rich Miller

* The Tribune has the scoop…

Illinois Senate Democrats are looking hard at borrowing $16 billion, pumping the cash into the state employee pension systems and hoping the investments can beat the market—all as a way to ease budget pressures.

It’s an idea that so far has worked after Gov. Rod Blagojevich took a chance on a $10 billion bond package in 2003. He caught the markets at a terrifically low rate of just over 5 percent and the pension systems took their portion of the proceeds and mostly invested wisely.

Several senators emerged from the Senate Democratic caucus Tuesday saying the latest pension bond idea will emerge in the budget plan they hope to roll out soon. […]

But Sen. Susan Garrett (D-Lake Forest) said she is skeptical about voting for a $16 billion pension bond and the newly proposed $31 billion construction plan when a state operating budget remains unsettled.

* That won’t be easy to pass. The AP did a story on this idea earlier in the week…

Critics, including business groups and Republicans, say borrowing to pay off old debt, even if it’s at a lower interest rate, isn’t wise. It just puts off the problem.

They say there’s also too much risk in a pension bond. It only works if the invested proceeds from the bond get a better return than the interest rate on the amount borrowed, which could be 5 percent a year. In a shaky stock market, critics warn, nothing is guaranteed and the state’s pension debt could get even worse.

“This is a craps game, and you shouldn’t operate the state’s finances based on taking those kinds of risks,” said Eden Martin of the civic committee of the Commercial Club of Chicago.

* The Civic Federation had some harsh words about the idea in a recent report…

“Until Illinois political leaders dedicate themselves to putting the state’s fiscal house in order, Illinois taxpayers and the Civic Federation will not have confidence that any new revenue will be spent effectively,”

* If the plan is met with stiff opposition, it might be dumped like a hot potato…

“I don’t think there’s a will from any member to be down here this summer,” said Sen. Donne Trotter of Chicago, the budget point man for the Senate’s Democratic majority.

* More evidence of that apparent willingness to abandon ship and get out of town…

The House is expected to first push a “bare-bones budget” and follow up with spending expansions as agreement can be found.

Senators, however, say they don’t plan on entertaining more spending until there’s a deal on producing the needed dollars.

“You can’t order up the dinner and know that your Link card, the ATM card’s gonna bounce, MasterCard, whatever they (House members) think they have over there. We’re broke,” said state Sen. Rickey Hendon, a Chicago Democrat.

* But there’s also this…

.Blagojevich spokeswoman Rebecca Rausch said the governor is more focused on seeing a good budget that meets the right priorities than having something done by a specific date.

Except almost nobody really believes that they can pass a “good budget” this year, so why bother sticking around?

23 Comments

No trust, no deal

Wednesday, May 21, 2008 - Posted by Rich Miller

* “Trust” is the word of the day….

Conceding that many state lawmakers just don’t trust Gov. Rod Blagojevich, two former congressmen Tuesday unveiled a $31 billion public-works package to be paid for by leasing part of the lottery, giving Chicago a casino and allowing slot machines at horse-racing tracks.

Former U.S. House Speaker Dennis Hastert, a suburban Republican, and former U.S. Rep. Glenn Poshard, a Downstate Democrat, delivered the Blagojevich-backed plan to lawmakers, who immediately greeted its chances with skepticism as they try to finish a state budget in the next 10 days.

* And…

But the two veteran political leaders — who have been Gov. Rod Blagojevich’s roving emissaries on the issue lately — acknowledged that legislative distrust of Blagojevich has hampered their effort. Their recommendations include “accountability provisions” to reassure legislators that the Democratic governor won’t break any agreements on how the money is supposed to be spent. […]

“Part of the problem is a trust factor, frankly, between the Legislature and the governor,” said Hastert, a Republican who is a former speaker of the U.S. House

* And…

Senate Minority Leader Frank Watson, R-Greenville, said the revenue ideas floated Tuesday are “iffy at best.” He said Republicans also are still leery of so-called accountability measures contained in the plan. Those measures were included to allay fears that Blagojevich might use the money for something other than construction projects or would only approve projects for his political allies.

* Watson added…

“We need a lockbox that Houdini can’t get out of.”

* As Watson pointed out, the trust factor isn’t the only problem here. There’s also the funding mechanisms…

To pay for the $31 billion package, proponents are counting on two ideas that have stalled in the legislature.

They hope to raise $10 billion by leasing a large portion of the lottery, with $7 billion going for construction and the rest for increased education spending.

The other hurdle is winning support for a huge gambling expansion that includes a land-based Chicago casino, a new riverboat casino, adding thousands of positions at existing boats and putting slot machines at racetracks. The plan also counts on taking advantage of the state’s surge in gas-tax revenues tied to higher prices at the pump.

* That last proposal came at somewhat of an inopportune time for the House Republicans, who held a press conference yesterday morning demanding that motorists be given a gasoline sales tax holiday this summer…

House Republicans are calling for a suspension of the Illinois sales tax on gasoline this summer.

Lawmakers claim the average family would save up to $60 over a four-month tax holiday. Truckers might save $1,000.

* Patterson put it well…

So, now those House Republicans face this choice: help local motorists, or get credit for big new construction projects with grand ribbon-cutting ceremonies.

But Patterson later bumped into a House GOP spokesperson who said: “We’re for capital.”

* That quote sums up the dire need for a capital plan…

Most Illinois political leaders in both parties agree a major program is necessary to rebuild deteriorating highways, bridges, schools and public transit. The failure to launch such a plan has endangered $9.3 billion in federal matching funds.

“We’re the fifth-largest state in the nation (and) we’ve been nine years without an investment in our infrastructure,” said Poshard, a former Democratic gubernatorial candidate and now president of Southern Illinois University at Carbondale. “We can’t compete (economically) if we don’t decide to invest.”

But without trust, it’s gonna be really tough to get this done.

* Meanwhile, even though Blagojevich has said that the capital plan and the budget are tied together, two top Senate Democrats had news for the guv…

Sen. Donne Trotter, D-Chicago, said lawmakers have to approve a budget before adjourning.

“We do not need to pass a capital bill to be out of here by June 1,” he said.

“A capital bill is separate. They are not tied together in any way,” agreed Senate Majority Leader Debbie Halvorson, D-Crete.

33 Comments

Morning Shorts

Wednesday, May 21, 2008 - Posted by Kevin Fanning

* Tax collectors have trouble

* Audit: Tax agency sloppy with dollars

* Illinois panel delays action on Silver Cross

* A few DCFS investigations are too slow, report says

* Governor touts treatment program

* Rezko-trial juror’s family issue ends day early

* Scalia says his views are similar to Lincoln’s

* Daley: ‘Not my way’ to ‘ram through’ museum vote

* Zoning committee postpones Children’s Museum vote