* OK, so despite what we’ve been told, there’s money available for all of this year’s capital plan. Good…
Construction across Illinois is not in danger of stopping, or even slowing down this summer.
Gov. Pat Quinn’s administration says there are billions of dollars available for road, bridge, and school construction despite a legal challenge to the law the pays for it all.
There had been some question as to whether Illinois had all it needed to move ahead with the second summer of construction that is to come from 2009’s $30-billion public works package.
On Tuesday Quinn’s budget manager, David Vaught, said Illinois has close to $2 billion in the bank and still has another $5 billion in construction bonds to sell.
* The revelation took some legislators by surprise…
State Rep Rich Brauer, R-Petersburg, said if Illinois has $2 billion in the bank then why was there ever talk of missing a summer construction season.
“We have not had any discussion about construction in so long, but I am kind of surprised that there is that kind of money just laying around.”
State Rep Dan Beiser, D-Alton, is in charge of the House Transportation committee. He said Vaught’s comments are the first he’s heard about $2 billion in the bank. That’s all the more reason, Beiser said, to let the court take its time with the legal challenge.
“I think we can now wait on the courts,” said Beiser.
Cullerton was correct. $2 billion will not cover the planned IDOT construction season, let alone the other capital projects planned for this year. The sale of the proposed bonds is waiting because Vaught and the Quinn finance folks know that there will be no buyers in the bond market while the program remains under a legal cloud.
OK, how are you going to sell $5 billion in bonds when the funding source to pay them off is tied up in court? Talk about your sub-prime lending market. Sure that’ll bring it a GREAT interest rate.
“State Rep Dan Beiser, D-Alton, is in charge of the House Transportation committee. He said Vaught’s comments are the first he’s heard about $2 billion in the bank.”
Failure to Communicate? In IL?
- Six Degrees of Separation - Wednesday, Apr 6, 11 @ 9:00 am:
One thing to remember is that a lot of the capital construction projects are funded primarily with federal dollars, and capital is simply matching at 105 or 20%. So “money in the bank” may be referring to federal formula or earmark $ that will be reimbursed upon expenditure. Somebody needs to chase the shell game to get the true picture here.
–The sale of the proposed bonds is waiting because Vaught and the Quinn finance folks know that there will be no buyers in the bond market while the program remains under a legal cloud.–
Although some pledged revenues are in question, buyers don’t care. They’re general obligation bonds. They’d sell in a New York minute, as have the previous issues.
And we still don’t have a clear answer. CDB — the building agency — says they’re out of money for campus construction. But the budget wizards say everything is great. Again, is Vaught saying CDB is wrong? Is CDB admitting they were wrong and agreeing they’ve got plenty of money?
It sounds like CDB freelanced their testimony without checking in with the Governor’s office. Otherwise, why the discrepancy? Aren’t they (Vaught and Underwood) supposed to be on the same team?
For many construction projects, a larger amount is obligated when the bonds are released. This ensures the money is there to complete the project. Many projects take several years to complete, and up to five if you take into account the design phase as well. Some projects only spend 10% in the first year. With the sporadic bond sales we have had, CDB is probably being conservative.
I personally wouldn’t trust anything Vaught says. I have little confidence in him. Somebody needs to determine why CDB and OMB are not on the same page here.
“Somebody needs to determine why CDB and OMB are not on the same page here.”
They both report to Paddy, don’t they? That would explain the confusion…
- Small Town Liberal - Wednesday, Apr 6, 11 @ 11:16 am:
- They both report to Paddy, don’t they? That would explain the confusion… -
Cat’s CEO had some pretty high praise for Paddy, but I imagine you’re far more qualified to judge him. I noticed you didn’t have too much to say on that topic yesterday, but I’m glad you’re back to your old self today.
If by “Paddy” you mean the Governor of Illinois, I do not quite understand why he would need to know a road grader from a backhoe. Perhaps I misunderstand the Constitutional duties of the head of the Executive Branch…
Paddy might not know a road grader from a back hoe but he would have no problem saying he supports the road graders one month and then the next month sign a law making road graders illegal. Back hoes would be exempted from layoffs for an endorsement and some cam Kahn cash. Cause that’s how Quinn rolls.
I certainly welcome Rich’s call for civility regarding Governor Quinn and will look forward to this civility in future threads about Senator Kirk, State Senator Brady and many, many others.
- Old Milwaukee - Wednesday, Apr 6, 11 @ 7:44 am:
Was it Cullerton that was warning the construction projects could come to a stop so he could try to pass a cigarette tax hike?
- phocion - Wednesday, Apr 6, 11 @ 8:01 am:
Cullerton was correct. $2 billion will not cover the planned IDOT construction season, let alone the other capital projects planned for this year. The sale of the proposed bonds is waiting because Vaught and the Quinn finance folks know that there will be no buyers in the bond market while the program remains under a legal cloud.
- Old Milwaukee - Wednesday, Apr 6, 11 @ 8:16 am:
Strange. Cullerton is the only person making that argument. He must be smarter than everybody else.
- piling on - Wednesday, Apr 6, 11 @ 8:30 am:
OK, how are you going to sell $5 billion in bonds when the funding source to pay them off is tied up in court? Talk about your sub-prime lending market. Sure that’ll bring it a GREAT interest rate.
- John A Logan - Wednesday, Apr 6, 11 @ 8:36 am:
Yeah. Right. The budget directors word is gospel. LOL.
- sal-says - Wednesday, Apr 6, 11 @ 8:52 am:
“State Rep Dan Beiser, D-Alton, is in charge of the House Transportation committee. He said Vaught’s comments are the first he’s heard about $2 billion in the bank.”
Failure to Communicate? In IL?
- Six Degrees of Separation - Wednesday, Apr 6, 11 @ 9:00 am:
One thing to remember is that a lot of the capital construction projects are funded primarily with federal dollars, and capital is simply matching at 105 or 20%. So “money in the bank” may be referring to federal formula or earmark $ that will be reimbursed upon expenditure. Somebody needs to chase the shell game to get the true picture here.
- wordslinger - Wednesday, Apr 6, 11 @ 9:03 am:
–The sale of the proposed bonds is waiting because Vaught and the Quinn finance folks know that there will be no buyers in the bond market while the program remains under a legal cloud.–
Although some pledged revenues are in question, buyers don’t care. They’re general obligation bonds. They’d sell in a New York minute, as have the previous issues.
- piling on - Wednesday, Apr 6, 11 @ 9:27 am:
And we still don’t have a clear answer. CDB — the building agency — says they’re out of money for campus construction. But the budget wizards say everything is great. Again, is Vaught saying CDB is wrong? Is CDB admitting they were wrong and agreeing they’ve got plenty of money?
- Capra Corn - Wednesday, Apr 6, 11 @ 9:39 am:
It sounds like CDB freelanced their testimony without checking in with the Governor’s office. Otherwise, why the discrepancy? Aren’t they (Vaught and Underwood) supposed to be on the same team?
- Scottish - Wednesday, Apr 6, 11 @ 10:07 am:
For many construction projects, a larger amount is obligated when the bonds are released. This ensures the money is there to complete the project. Many projects take several years to complete, and up to five if you take into account the design phase as well. Some projects only spend 10% in the first year. With the sporadic bond sales we have had, CDB is probably being conservative.
- Demoralized - Wednesday, Apr 6, 11 @ 10:08 am:
I personally wouldn’t trust anything Vaught says. I have little confidence in him. Somebody needs to determine why CDB and OMB are not on the same page here.
- Cincinnatus - Wednesday, Apr 6, 11 @ 10:19 am:
Demoralized said,
“Somebody needs to determine why CDB and OMB are not on the same page here.”
They both report to Paddy, don’t they? That would explain the confusion…
- Small Town Liberal - Wednesday, Apr 6, 11 @ 11:16 am:
- They both report to Paddy, don’t they? That would explain the confusion… -
Cat’s CEO had some pretty high praise for Paddy, but I imagine you’re far more qualified to judge him. I noticed you didn’t have too much to say on that topic yesterday, but I’m glad you’re back to your old self today.
- piling on - Wednesday, Apr 6, 11 @ 12:17 pm:
Please, Paddy wouldn’t know his road grader from a back hoe.
- soccermom - Wednesday, Apr 6, 11 @ 12:32 pm:
If by “Paddy” you mean the Governor of Illinois, I do not quite understand why he would need to know a road grader from a backhoe. Perhaps I misunderstand the Constitutional duties of the head of the Executive Branch…
- Fed up - Wednesday, Apr 6, 11 @ 4:00 pm:
Paddy might not know a road grader from a back hoe but he would have no problem saying he supports the road graders one month and then the next month sign a law making road graders illegal. Back hoes would be exempted from layoffs for an endorsement and some cam Kahn cash. Cause that’s how Quinn rolls.
- Rich Miller - Wednesday, Apr 6, 11 @ 4:01 pm:
The next person who calls the governor “Paddy” is gonna be banned for life. Enough. It’s demeaning and insulting. Stop it.
- Rich Miller - Wednesday, Apr 6, 11 @ 4:07 pm:
To the complainer I just deleted: My blog, my rules. Follow them or go elsewhere.
- Demoralized - Wednesday, Apr 6, 11 @ 4:34 pm:
==They both report to XXXXX, don’t they? That would explain the confusion…==
Touche
- Cincinnatus - Wednesday, Apr 6, 11 @ 5:13 pm:
I certainly welcome Rich’s call for civility regarding Governor Quinn and will look forward to this civility in future threads about Senator Kirk, State Senator Brady and many, many others.
- Rich Miller - Wednesday, Apr 6, 11 @ 5:16 pm:
Cincinnatus, if someone used an ethnic slur against either of those guys, I would issue the same sort of warning.