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An election year toll hike? Plus: New McPier board doesn’t get it

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Illinois

* According to Crain’s, “Illinois toll rates are among the lowest in the country, averaging 3.3 cents a mile for passenger cars using the electronic toll lanes.” But a rate hike may be in the cards during an election year…

Faced with up to $4 billion in critical repairs on the I-90 tollway and $7 billion in debt already on the books, agency leaders are quietly considering what they previously declared unacceptable: raising tolls on passenger cars using the system’s electronic I-Pass lanes.

The agency is at a financial crossroads: Toll revenue is flat while expenses continue to rise, leaving less operating cash to meet mounting debt obligations. With I-90 and other improvements demanding attention, the authority has all but shelved a plan to devise “green lanes” for carpooling and mass transit, the capstone of its ambitious conversion to electronic, open-road tolling.

By all accounts, the agency needs more money. For starters, the 63-mile stretch of I-90 between O’Hare International Airport and Rockford needs fixing now. Tollway engineers say 80% of the road requires extensive work as soon as this year, and officials are proposing several options, from patchwork repairs to a massive reconstruction project that would include rail or bus service. The cost could run anywhere from $2 billion to $4 billion. Four new tollways, including a western bypass to O’Hare from Elgin, would add billions more to the authority’s expenses.

Crain’s also published some handy graphs…

* In other news, Greg Hinz does a good job of outlining what’s gone so wrong at McCormick Place…

The unions that work at McCormick Place are the same unions employed at the Stephens Convention Center at Rosemont and the same unions that frequently dispatch members to work shows in Nevada and Florida. On an hourly basis, their members earn roughly the same in each of those locales.

But only in Chicago does the end customer — the trade show or convention — end up paying a ton more. Who gets the difference?

One chunk goes off the top to the Metropolitan Pier and Exposition Authority. “McPier” runs McCormick Place and collects a surcharge on just about everything within its halls but argues with some validity that it has cut costs way back lately.

Others point to the two big companies that manage shows for McCormick Place customers, or to the unions, which at times effectively dictate work rules and are divided here into bargaining units that each need to be fed.

But back to my question: Who’s to blame? “All of them,” answers one insider I trust. I suspect she’s right, and I’m guessing the Madigan plan will at least singe all of them.

But the interim McPier board can’t seem to get its act together. The Tribune sums up what the board will bring to Springfield…

• A commitment to slash its profit margins on food and electrical service, and potentially to give customers a choice of providers. Talk of privatizing electrical service hit a wall.

• Support for extracting work-rule concessions from the unions, either by making workers public employees or by pressuring the unions and their private employers to go back to the bargaining table. The board was divided on this matter, as well as on whether contractors should be required to document that they pass along any savings in labor costs to customers.

Electrical service profit margins are out of this world. That has to be a major focus. It’s extremely disappointing that they don’t want to even require contractors to disclose whether they are passing along savings to exhibitors, let alone make pass-through reductions a requirement. As I’ve pointed out here before, Rosemont’s convention center (which is in the top ten nationally) is its own contractor and they don’t have any complaints about over-pricing, despite using the same unions as McPier.

* In other economy news, Chuck Sweeny has an interesting column about how downstate gas prices almost spiked way upwards, but how Gov. Pat Quinn and others stepped in to block new IL Dept. of Agriculture rules.

Also, the Peoria Journal-Star supports a bill backed by Attorney General Lisa Madigan to regulate the burgeoning credit debt settlement industry. But the Sun-Times thinks Madigan’s bill goes too far and supports legislation backed by “responsible” members of the industry.

* Related…

* $6.2M in rebate money gobbled up in 11 hours

* 5 things to know about Illinois’ telecom rewrite

* Daily Herald: Lawmakers, please don’t forget jobs

* Can Cook County homeowners save their homes?: Under the program being rolled out in the county, where foreclosures this year spiked 16 percent over the same period last year, homeowners will be able to meet with their lender to try to work out a modification or other agreement.

* Housing crisis in the inner city

* Illinois makes millions selling personal information

* State law restricts what can be sold to whom

* Lawmaker support lacking for $1 cigarette tax increase

* Harsh political reality may blunt medical marijuana push

* Attorney general, Citizens Utility Board criticize water rate hike

posted by Rich Miller
Monday, Apr 19, 10 @ 9:04 am

Comments

The biggest Illinois political story of the day isn’t even mentioned on CapFax yet? What gives?

Comment by AnonToo Monday, Apr 19, 10 @ 9:18 am
I was at McCormick Place this weekend. I bought a sandwich and went out to the lakeside to eat it in the fresh air. There were two guards watching folks leave through the doors to the lake. On the outside, there were two more guards stopping people from reentering the doors (even though they don’t open that way) and directing them to revolving doors about 100 feet south. At the revolving doors there were two more guards watching people re-enter.

So there you have it. 6 people to do the work of 2 and a couple of signs. Gee, I wonder why it costs so much?

Comment by Phineas J. Whoopee Monday, Apr 19, 10 @ 9:21 am
Make-work patronage and absurdly generous union contracts. The corruption tax is killing this state.

Comment by AnonToo Monday, Apr 19, 10 @ 9:33 am
–Four new tollways, including a western bypass to O’Hare from Elgin, would add billions more to the authority’s expenses.–

Maybe we should slow down on four new tollways. New construction is incredibly expensive. Fix the existing roads first.

I know a lot of land speculators and house farm developers might not want to hear that, but times are tough all over.

Besides, I think it’s an interesting quirk that the Elgin-O’Hare Expressway enters neither the town or the airport.

Comment by wordslinger Monday, Apr 19, 10 @ 9:38 am
I sit amazed that the McPier authority does not get it (snark.)

The hierarchy of loyalties has become a bit more apparent. First we throw the working stiff under the bus and pretend we have solved the problem…..

While there is much to say about the union work rules and wages, it is becoming more clear that there is a lot more at play than what the men (and women) on the job get in compensation. The secretive meetings which threw the press out are an example of the arrogance the McPier leadership and its immediate stakeholders share. Until there is new leadership and removal of the secretive middlemen, the convention business will continue to crater.

Heck, it was only recently that the McPier authority wanted hundreds of millions to build a new hotel in this market where occupancy is already at very low levels. Who thought that was a money maker?

The folks at the top have a different set of priorities than the citizens of Illinois. The are dedicated first to the continuation of their own power and that of their political masters. Then they have a support network for the “friends of the patrons.” The rest of the stuff is simply crumbs left to garner the support from the unions. The real money is already consumed.

Comment by Plutocrat03 Monday, Apr 19, 10 @ 9:54 am
Why did the Tollway’s operating expenses rise so fast in the past 5 years?

Partly because the Executive Director makes more than the Governor?

Comment by truthman Monday, Apr 19, 10 @ 10:09 am
What is amazing is all the talk of tax hikes and higher fees when it is obviuos that the state is wasting money. State vehicles being used for personell use, politicans stacking the state payroll with family members it’s very difficult to accept higher taxs and fees when day after day more examples of corruption and waste are discovered. Just think of the waste that isn’t as obvious the papers only get the low hanging fruit. This administration just cannot be trusted with more money to squander.

Comment by Anonymous Monday, Apr 19, 10 @ 10:15 am
One of the items not explicitly discussed in the Crain’s tollway article:

The reconstruction cost of I-90 will be highly dependent on what happens with the STAR line, the Metra proposal to run commuter trains down the median of I-90 from O’Hare to Hoffman Estates. Add the transit line and the cost doubles.

And to wordslinger’s comment-

Maybe it’s time to offer these new tollways to a public-private concession, where the low bidder gets a concession to build, operate and toll the facility, and the pricing structure is figured into the bid. That way, existing toll users are not charged with the cost of expanding the system.

Comment by Six Degrees of Separation Monday, Apr 19, 10 @ 10:39 am
Those who use the tollway, are increasingly going to pay more of their “fair share” to use it in these very tight budgetary times…the only way to avoid this is to use public transportation/advocate for expanded public transit, which unfortunately has no dedicated funding stream…

Comment by Loop Lady Monday, Apr 19, 10 @ 10:50 am
I thought we’d see more savings from having fewer employees take change. Instead, in the infinite wisdom of the tollway, they still have employees taking exact change from drivers. Why not bring back the baskets and limit the employees to one lane for those who don’t have exact change?

Oh right, the patronage. My bad.

Comment by 47th Ward Monday, Apr 19, 10 @ 11:03 am
–Instead, in the infinite wisdom of the tollway, they still have employees taking exact change from drivers. –

It’s the same on the privatized Skyway and Indiana Toll Road, which I find odd.

Comment by wordslinger Monday, Apr 19, 10 @ 11:09 am
47th Ward channelling Paula Wolff channelling Gilda Radner channelling Emily Letilla:

Nevermind.

http://www.chicagobreakingnews.com/2010/04/report-tolls-may-be-raised-for-i-pass-users.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ChicagoBreakingNews+%28Chicago+Breaking+News%29

Comment by 47th Ward Monday, Apr 19, 10 @ 2:56 pm
Loop Lady,

The tollway users have always paid at least their “fair share” since tollway revenues and costs are nearly totally self-contained with no outside state or federal subsidy help…in other words, the tollways are funded by their user fees. Its users are also doubly taxed by paying about 40c a gallon state and federal road tax for the fuel they buy or consume while driving on the tollway, of which zero goes to building, operation or maintenance of the toll road system.

You can be an advocate of more transit (of which I am, and a user also), but more transit will require more subsidies so that it won’t be priced out of ordinary folks’ means. And therein lies the rub, especially with what we are financially faced as a state and nation.

If a concession could run transit as a private enterprise at a profit, firms would be lining up to do so. Maybe the cost equation will work out when gas is $10 a gallon.

Comment by Six Degrees of Separation Monday, Apr 19, 10 @ 3:13 pm
Folks, take a look at the handy graph Rich plucked from the Crain’s article - the steep increase in annual debt payments is the culprit here. So even if you tie operating expenses to revenue (read: reduce headcount), you only slightly delay the day of reckoning.

We’ll see additional borrowing before a toll increase, but only because it’s politically palatable.

Comment by The Doc Monday, Apr 19, 10 @ 3:53 pm
Why do we need a McPier Authority, really? Can’t they just appoint a business manager for booking the events and be done with it?

Comment by Gregor Monday, Apr 19, 10 @ 6:13 pm