Can’t anybody play this game?
Wednesday, Nov 4, 2015 - Posted by Rich Miller
* State construction money isn’t being distributed and there’s still lots of untapped bonding authority out there…
Illinois, once a top issuer of municipal bonds, has been absent from the debt market for a year and a half despite having more than $4.8 billion of untapped bond authorization left from a $31 billion, partially bond-funded “Illinois Jobs Now!” program the state enacted in 2009.
Money on hand from state bond sales shrank to $552 million at the end of fiscal 2015 from $2.68 billion at the end of fiscal 2014, according to Moody’s. […]
Metra, the Chicago area’s commuter train operator, said about $400 million of projects, including improvements to 16 stations, two rail yards and a major bridge replacement program, are on hold due to the lack of state bond money.
Our state could use those jobs. And those are easily measurable jobs, not some ideological pie in the sky hoped-for return on anti-union “reforms.”
* Also, this…
A package of fees and taxes meant to pay off the “Jobs Now” bonds has fallen short of its revenue target. This is largely due to underperformance of a video gambling tax as some communities, most notably Chicago, blocked the gaming machines.
The package is expected to generate $830 million this fiscal year, short of legislative projections from 2009 that it would raise $943 million to nearly $1.2 billion annually, according to the Chicago-based Civic Federation.
Chicago wants a casino, so it hasn’t approved video gaming. In the process, it has passed up millions of dollars in revenue, which it can’t afford to leave on the table.
Man, this state is messed up.
- VanillaMan - Wednesday, Nov 4, 15 @ 9:26 am:
When politics is injected into every facet of governing to the extent it currently is, there is no governing. To one political party, this is seen as a good thing.
Until they remove their heads from their posteriors and stop hating the organizations they lead, we won’t have any governing.
BTW - the past twenty years has hobbled Illinois to an amazing extent. Anyone thinking that government is a problem, obviously isn’t aware of what happens when there isn’t any government.
Or doesn’t care.
Or gets $63,000,000 a year in retirement.
- Arsenal - Wednesday, Nov 4, 15 @ 9:28 am:
Not using the bond authority seems like part of the administration’s pattern of ignorance. Not that that’s OK, it’s just morally more understandable than Chicago’s deliberate sabotage.
- Arsenal - Wednesday, Nov 4, 15 @ 9:28 am:
And I’m all for a Chicago casino, too. Just, y’know, in the meantime, solve what you can solve.
- Honeybear - Wednesday, Nov 4, 15 @ 9:33 am:
Okay, I need some Oscar therapy. Rich, could you post a nice pic of your dog? That would be a nice offset to the other news. Maybe IPI could layoff for a bit and start posting cat videos. Holy crap, failure day in and day out is starting to take a toll.
- unspun - Wednesday, Nov 4, 15 @ 9:36 am:
The election and its campaign ended a year ago. Someone please notify BVR that he won, and that he may begin governing now. And, by “governing” I don’t mean taking the failed anti-union policies adopted by ultra-conservative states a decade ago and trying to superimpose them onto a progressive state with endless economic potential. Illinois neither wants nor needs those policies, which is why I suspect BVR campaigned in the general election as not having an “anti-union” agenda.
- Ducky LaMoore - Wednesday, Nov 4, 15 @ 9:38 am:
===Not using the bond authority seems like part of the administration’s pattern of ignorance.===
Bond Authority: The Accidental Hostage
When you have never run a government and have no desire to learn, this happens. Good management isn’t sexy. But bad management sure is ugly.
- walker - Wednesday, Nov 4, 15 @ 9:43 am:
Arsenal: Even when the game’s going badly, the best teams can score some goals and get some points.
Unless they’re more comfortable sitting back and blaming the ownership.
- Former Hoosier - Wednesday, Nov 4, 15 @ 9:45 am:
Hmmm…interesting how the Gov’s ‘hood in Winnetka is having some major infrastructure work done on sewers and streets.
- Anon221 - Wednesday, Nov 4, 15 @ 9:49 am:
Rauner wanted all high school students to take Civics classes. I’d like to see what his idea of the actual curriculum should be.
http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=099-0434
“Civics course content shall focus on government
institutions, the discussion of current and controversial issues, service learning, and simulations of the democratic process.”
- Bored Chairman - Wednesday, Nov 4, 15 @ 9:55 am:
May help explain why the Deputy Secretary at IDOT is stepping down.
- Maguffin - Wednesday, Nov 4, 15 @ 9:59 am:
Beyond video poker revenues, don’t forget that the failure of Northstar, the lottery’s private manager, to produce the hundreds of millions of dollars in additional lottery profits promised in their winning bid, coupled with the millions lost because of their ineffective Internet lottery app, significantly affected the state’s bonding ability, and cost hundreds, if not thousands, of construction jobs.
- Team Sleep - Wednesday, Nov 4, 15 @ 10:01 am:
Hoosier - maybe Winnetka properly manages their collected property tax and additional sales tax revenue? You know…unlike Springfield, which can’t seem to do anything right.
So are we going to blame Chicago’s refusal to green light video gaming on the Governor, too?! I’m sorry, but that’s not exactly his doing.
- Abe the Babe - Wednesday, Nov 4, 15 @ 10:02 am:
At this point Rauner has two options.
1. Pare down the TA to reasonable reforms like WC and property tax reform and end the mess with some semblance of a #Win.
2. Limp along with no budget, declare that a deal is not possible with Madigan/Cullerton and focus all efforts/resources/capital on the ‘16 elections.
Im betting the superstars are pushing for #2 so that the always talked about war with the democrats actually takes place. You know the one in which the GOP has enough $ to compete.
- Louis G. Atsaves - Wednesday, Nov 4, 15 @ 10:02 am:
Revenues on the existing bonds issued from 2009 going forward are short $100 million from expenses? The solution is to double down on these losses by spending the rest of the bond money?
Fix the problem of lack of enough revenues first. Or is that too much of a common sense solution here?
- Former Hoosier - Wednesday, Nov 4, 15 @ 10:09 am:
Team Sleep- Yes, overall, Winnetka does a good job of managing the finanaces. However, the sewer/road work of which I spoke is an IDOT project.
- Team Sleep - Wednesday, Nov 4, 15 @ 10:16 am:
Hoosier - just curious, but how is a sewer project tied into IDOT? I haven’t been to Winnetka in years, so I don’t know if it would tie into a sewer repair/replacement on an IDOT-maintained area.
To be fair, too, a lot construction money comes in from arrears. The general public sees it and wonders what’s going on, which makes sense given the public’s attention to real time issues and funding.
- Team Sleep - Wednesday, Nov 4, 15 @ 10:19 am:
And - just so you think I’m not just being difficult - one reason I ask is because I used to sit on planning meetings when the City of Springfield was trying to map out major sewer repairs and replacement. Most of the funds/loans come from the EPA (for cities) or the USDA (for smaller communities). IDOT is typically only involved if the sewer lines are somehow tied into an area controlled/maintained or engineered by IDOT.
- Former Hoosier - Wednesday, Nov 4, 15 @ 10:24 am:
Team Sleep- don’t know the $ details. The work is being done on a state maintained road. It is separate from the stormwater plan being implemented by the Village of Winnetka. I’m sure the project has been planned for awhile. The amount of reconstruction being done (on a road that was not in bad shape) seems curious given that many other state construction projects have been put on hold.
- DuPage - Wednesday, Nov 4, 15 @ 10:28 am:
How much in federal matching funds are we losing by not fixing bridges and highways? If Illinois spends a billion to build new highway bridges, the feds match and then much of the money goes back into the Illinois economy.
- Anon221 - Wednesday, Nov 4, 15 @ 10:28 am:
Team Sleep-
This may be applicable to how the funding works-
http://idot.illinois.gov/assets/uploads/files/doing-business/manuals-split/local-roads-and-streets/chapter%2004.pdf
- illini - Wednesday, Nov 4, 15 @ 10:30 am:
“Man, this state is messed up.” Exactly
- Anon - Wednesday, Nov 4, 15 @ 10:42 am:
“Man, this state is messed up.”
Pretty much sums things up. This bond money issue is mind-blowing. SMH. I can’t believe there aren’t people in the administration’s budget or legislative offices that understand this.
- Bored Chairman - Wednesday, Nov 4, 15 @ 11:15 am:
Hoosier, the Governor’s Winnetka home is located in a residential neighborhood on a Village Street. Please remove your tinfoil hat and refrain from making stuff up.
- mikie maddawg - Wednesday, Nov 4, 15 @ 11:18 am:
I agree with rich on this one, the state is messed up and it’s mostly from the kind of people who live in-state. from the top to the bottom of this state are people who just aren’t right. born here and lived here most of my except for maybe a year but traveled a lot and the old saying about this state is like a bowl of granola because it’s filled with nuts, flakes and etc is not about California but this gawd forsaken hole. believe if I could leave I would and it looks like pretty good chance with the leadership in place for this state that I won’t have a choice.
- DuPage - Wednesday, Nov 4, 15 @ 11:29 am:
@Anon221 10:28
Thank-you for posting the link about funding.
Somehow I thought bridge rebuilding was matched by
the feds 50/50. It looks like I was incorrect.
According to the IDOT link, bridges are 90/10
with the feds paying 90%. This is awful, much
worse then I originally thought. If Rauner cuts
a billion from fixing bridges, Illinois loses
nine billion in federal funds. Illinois has a lot
of bridges in bad condition.
- Ducky LaMoore - Wednesday, Nov 4, 15 @ 11:36 am:
“Chicago makes Illinois look well run, and that’s pretty scary.” -Bruce Rauner
I missed that on Monday. You would think the guy in charge of running the state wouldn’t make such a negative comment about himself.
- Mattman - Wednesday, Nov 4, 15 @ 11:54 am:
=== “Man, this state is messed up.”
No Rich….. this state is way more than messed up.
Just wait till the snow starts flying and someone realizes that no vendor will sell diesel (on credit) for the plow trucks.
- Huh? - Wednesday, Nov 4, 15 @ 11:58 am:
The federal funds for bridges are a bit more nuanced than a straight 90%/10%.
The IDOT rule of thumb is 80%/20% for the vast majority of federal funding for both bridge and road projects. There are special cases where the 90/10 split comes into play.
To put this into perspective, the MFT sweep last June to balance the FY 2015 budget was essentially the State’s share of 1 construction season.
- PublicServant - Wednesday, Nov 4, 15 @ 12:09 pm:
Yeah, but…Pennsylvania!
- Bruce (No not him) - Wednesday, Nov 4, 15 @ 12:11 pm:
“Man, this state is messed up.”
Nope, the state is fine. Just the government is messed up.
- Henry Francis - Wednesday, Nov 4, 15 @ 12:21 pm:
This all assumes that the governor is interested in governing. He isn’t.
He is interested in bringing the Democratic Party to its knees and breaking the current government apparatus and rebuilding it in his image. If you look at it from that perspective, then everything makes sense.
- Anon - Wednesday, Nov 4, 15 @ 4:01 pm:
===Man, this state is messed up.===
Rich, I agree with you.
The only think that might be more messed up than the state is if the state attempted to draft a bond disclosure statement that would have to be made available before the bonds could be issued, regardless of it’s a competitive bid or a negotiated sale.
These disclosure statements can be hundreds of pages long and are supposed to paint an accurate picture of what an investor can expect.
The State has already been sued by the SEC for misleading investors in it’s disclosures, and given the current state of affairs I think it would be very difficult to draft a statement that couldn’t potentially mislead bond buyers about the fiscal shape of Illinois.
http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171513202
The SEC and MSRB has also added new rules that make misleading disclosures even more of a potential risk for bond issuers by adding a mandatory disclosure for when any of the professionals involve realize that something they’ve provided to investors might be misleading that results in a scheduled fine/civil penalty rather than additional enforcement.
I’m not sure I would be willing to put my name and risk liability on a disclosure statement for the State of Illinois unless it blatantly said “We’re running our fiscal affairs like we’re a banana republic, however we’re offering a general obligation bond so if we do default on our payments you can sue us and a judge can order that we levy taxes to pay you back.”
So, simply having the authority to issue bonds is just one tiny part of the picture. The behind the scenes process has great implications, and I think it’s also really important to remember that the primary goal of issuing a bond is borrowing at the lowest rate possible and we’ve kind of made that a bit difficult.
- blue dog dem - Wednesday, Nov 4, 15 @ 9:23 pm:
Anon@4:01. Excellent. Cant for the likes of me understand how a state as sophisticated as Illinois even considers negotiated deals over a $mil. Crap like that perpetuates our bad name.