* Capitol News Illinois…
Pritzker announced Monday that he was forming a task force to study the possibility of transferring state assets to the pension system, but Hynes’ speech Thursday offered a more detailed glimpse into what the administration is, and isn’t, considering.
When asked by an audience member what kinds of assets they were considering to sell, Hynes jokingly said, “Don’t say tollway; don’t say tollway; don’t say tollway.”
“I joke about the tollway, but like that’s what everyone’s going to think,” Hynes said, according to a video of the event that was posted online. “And you have the Lottery. Any kind of cash-generating asset is a logical place to think of. But it’s not that simple. Those are actually complex because there are bonds attached to it. There are stakeholders.”
More likely, he said, the administration would look at some of its office buildings and other real estate.
“The state of Illinois in 2000 had 80,000 employees. Today, we have 60,000 employees,” Hynes said. “So not only does that contribute to the whole unfunded problem because we have fewer people paying into the pension system, but from a capacity and utilization of our properties standpoint, it begs the question: What are we doing with this excess space? Has it been looked at? Have we consolidated office space? Have we sold buildings of the state that we don’t need? And that’s what we’re going to be looking at.”
* As Hynes said, it would take quite a while to sell the Tollway, but there is a history to look back on…
At the time , it was estimated privatization of the tollway could generate as much as $24 billion for the state. Such a figure, even at the 2006 estimate, represents nearly 18 percent of the state’s current unfunded pension liability of about $134 billion.
The estimate, provided by Credit Suisse, said the lease or sale value would depend on such issues as raising toll rates. The finance firm said the state could raise $23.8 billion if it leased the tollway for 75 years, increased tolls by 50 percent every 20 years, and also hiked tolls 3 percent in all other years of the lease. […]
Privatization of the tollway system also could carry political ramifications. Much of the tollway is located in suburbs that have leaned Republican until recently, as well as in more rural GOP areas. When Blagojevich introduced the issue, Republican leaders warned him of the potential backlash from suburban drivers who might have little protection from seeing tolls boosted by a private operator.
Additionally, the 2008 privatization of Chicago’s parking meters by Daley for $1.15 billion, which the mayor rapidly spent down as parking rates escalated, has created negative public attitudes toward the leasing or selling of major public assets in the region.