*** UPDATE 3 *** An e-mail to me from Ms. Ridgway of the governor’s press office…
It is the Governor’s intention that transit projects will get started this construction season.
Construction season ends in, what, November?
*** UPDATE 2 *** Greg Hinz at Crain’s has shared the original e-mail response he received from Katie Ridgway of the governor’s PR staff…
With a statewide unemployment rate of 9.1%, the Governor, working with the General Assembly, believed it was crucial to pass Jump Start Capital Plan to get shovel ready road projects going in May so we can start putting people back to work. The Jump Start Capital Plan relies on dollars from the Road Fund to support $640 million in road projects.
The funding source for the bonding to support $1 billion in transit projects is GRF; we are working with the General Assembly to pass revenue enhancements to support the GRF spending on the bonds. The purpose for including transit in the Jump Start Capital Plan was to allow transit agencies time to take action necessary to get projects into the “ready to go” phase. [emphasis added]
They are not working with the GA on passing revenue enhancements for transit. Nobody in the GA was ever told about this.
*** UPDATE *** The governor’s office is claiming that the Crain’s story which this post is based on is all just a misunderstanding. Here are some notes from a conversation with a top dog…
Out of context. There’s a significant cash flow problem right now so there’s no money at this moment for the bonding. We’re not trying to impose a new condition.
We’re trying to pay off Medicaid bills by end of May. We don’t have any intention to not issue the bonds. If governor’s budget passes, it puts more money into GRF because of the income tax hike. We have no intention of stalling or withholding any money. It’s a matter of economics. Easier with an income tax hike, but it’s not a condition.
[ *** End of Update *** ]
* Gov. Quinn is apparently reneging on a promise to pay for transit fixes…
What’s happened is that, after signing a bill on April 3 to issue $3 billion for bonds for roads and public transit work, Mr. Quinn’s office has agreed to release money only for roads.
The $1-billion portion that was supposed to go for new buses, train repairs and related items will have to wait, at least for now, flabbergasted transit leaders were told in a meeting with Jack Lavin, Mr. Quinn’s chief operating officer. […]
But the transit work is different, according to the governor’s office. It requires the Legislature to pass “revenue enhancements” to pay off the bonds, and that has not yet occurred, the spokeswoman says. The transit agencies can use the time to get their projects shovel ready, she says.
That’s just not true.
The transit bonding was supposed to be funded by GRF. There was nothing said about any revenue enhancements for that portion of the transit bill. Period.
“The agreement that passed was based on a $28-billion revenue stream that already exists,” said [House Speaker Michael Madigan’s spokesman], referring to the state’s General Revenue Funds, which were supposed to finance the transit bonds. “There was an agreement between the administration and the Legislature to pass this capital plan.”
I’d venture a guess that the bond houses weren’t all that thrilled with the idea of using a bombed-out General Revenue Fund to pay off these bonds. But, again, there was nothing said whatsoever about funding the transit program with any sort of revenue increase.
I’m sure Mayor Daley will also be pleased as punch.
This is an absolutely horrible way to start off the budget negotiations.
…Adding… Wordslinger notes in comments…
Actually, the bond houses like this single revenue source the best. It’s a General Obligation bond, basically; the GRF produces many times the coverage needed for debt service
True. In retrospect, this looks more like a budget office walk-back, which is what happened all the freaking time under Blagojevich. Not good at all.