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Forby touts capital plan for his region, IMA opposes it * UPDATED x1 *

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Illinois

* Sen. Gary Forby explains the current fight over the capital bill and Mayor Daley’s reluctance to sign on to the Chicago casino as only Forby can…

“You have to read the fine print,” Forby, D-Benton, said. “Chicago wants the gambling but they don’t want to see us get any money.

“Chicago will get their boats, but we won’t get our money. If you voted against this capital bill, then you voted against Southern Illinois getting our money. We’re getting the shaft again, people. If this bill goes down, if you think you’re crying now, you’ll need a towel to wipe your tears.”

Translation: Daley wants a lower share of Chicago casino revenues going to the state. That means less money for projects.

* And, as the Southern Illinoisan pointed out in a recent editorial, the folks down ‘yonder are getting a disproportionate share of the pie…

In one example, as the plan relates to the money earmarked for all nine Illinois Department of Transportation districts, the two southernmost districts would get 16 percent of the $14 billion for road and bridge projects. Yet those two districts only make up about 9.3 percent of the state’s population.

The Chicagoland district would get 37 percent of the funding, while it has nearly 64 percent of the state’s population.

* The SI has clearly bought into this notion that the South needs to grab while the grabbing is good, despite past problems with the governor’s truthiness…

We understand some lawmakers are leery of Blagojevich and the Constitutional authority he has to release funding for projects. But measures can be built into the bill that are designed to ensure the timely release of money solely for specific uses.

That would be really tough to do. And, so far, the governor has only agreed to the restrictions that are in the current bill. What’s in the bill is the limit that the governor will concede.

* Rep. John Bradley, who sponsored the motion to table the gaming bill on the last night of session, had this to say…

“Based on their track record, I think it is horrible public policy to give the administration lump sums of money,” Bradley said. “What’s the problem with transparency - with putting in the bill, here is $15 million for Carterville, here is $15 million for Marion? I don’t think it is asking too much to know exactly where the money will be spent.”

* Most of the newspaper editorial boards are focusing on all the sweet projects and jobs that a capital bill would provide. But as I told subscribers earlier this week, the Illinois Manufacturers Association has some harsh criticisms of the bill itself - criticisms that have mostly been ignored by the editorial writers. From a letter to state legislators…

Illinois gaming revenue is down 17 percent since the start of the year due largely to the statewide smoking ban and economic downturn in the economy. Despite the slumping revenue, and possible new competition from neighboring states, Illinois Works relies on a huge expansion of gaming in the form of new casinos and additional gaming spots at current casinos and horse tracks to fund the infrastructure program.

Under Illinois Works, the State Lottery would be leased to a private vendor for fifty years for a one-time payment of $10 billion. In the past two decades, the Lottery has been a stable source of revenue, providing nearly $600 million year-in and year-out for the Common School Fund. According to proponents’ stated plans, Illinois would be leasing a $30 billion state asset for a one-time payment of $10 billion. It does not make financial sense to sell or lease a state asset for 30 cents on the dollar, especially in light of the time-tested reliability of the revenue it has made available for our children’s education.

Finally, Illinois Works creates a funding gap in the state budget by diverting the sales tax on motor fuel from the General Revenue Fund… Illinois sales tax revenues are performing poorly, growing less than 1 percent over last year. This means that there is no additional tax revenue to patch the hole in the General Revenue Fund. […]

At a time when the state is facing a fiscal crisis, owing billions of dollars to health care providers and facing the worst funded pension system in the United States, it defies common sense to pass a massive new public works program that contains billions of dollars in unallocated, lump-sum spending or does not contain a mechanism to evaluate the merits of a project.

Illinois cannot afford a massive new program using unstable revenue.

All emphasis is in the original.

Yes, we need a capital plan. But do we need this one?

*** UPDATE *** The CTA Tattler is not exactly clear on the concept…

$115 million in capital funds in 2007 were diverted to cover RTA operating expenses. Of that total, the CTA diverted $83 million. And the five-year total is $315 million.

That’s just a harsh reminder that the state legislature still hasn’t provided any capital dollars for public transportation.

Huh? They’re getting capital dollars and diverting it to operating expenses.

posted by Rich Miller
Thursday, Jun 19, 08 @ 10:10 am

Comments

I still maintain we canNOT do a capital project until Blago is gone. He just can’t be trusted, period.

Comment by Little Egypt Thursday, Jun 19, 08 @ 10:17 am
Yes the southern region has only 9% of the population, but lots of miles of roads and bridges. You can’t distribute road funds on a per capita basis. Come down here and drive the roads-they are in terrible shape-Much worse than the central and northern regions of the state. And to makes things worse, most of our major roadways are two lane.

Comment by SIUPROF Thursday, Jun 19, 08 @ 10:18 am
I’m against giving any one leader a large “lump sum” - regardless of his or her past history. That’s the problem with omnibus bills and large-scale appropriations: there is too much chance for malfeasance and manipulation. Look at what happened when the U.S. House and Senate passed the 2005 TEALU! Pet project after pet project was embedded into the legislation. This wouldn’t be much different.

The “capital plan” needs to be broken down and passed into specific, germane brackets. There should be bills for school construction, road construction, community development, general infrastructure and state-sponsored government projects. A gigantic plan is too vague.

Comment by Team Sleep Thursday, Jun 19, 08 @ 10:35 am
There was some talk about the dynamics of the IMA letter on the Democrats, particularly how it hurts the position of the Governor and aids the position of the Speaker while the IMA opposes the type of measure that they would typically support. But the underreported angle is that it undercut the Republicans who were already out on a limb working for a capital bill. The IMA, while not always, is typically part of the institutional Republican party so I would not have expected them to put the Republicans in such a vulnerable position. Cross is no stranger to being left out by the institutional Republicans but it’s somewhat unusual to see it happen to Watson whose caucus just a few seasons ago considered themselves “the last true Republicans”. In fact it’s Watson’s members who are on the record voting for the four bills that made up the capital bill in late May and passing it over to the House. You could technically (although probably not honestly) argue that Cross is less vulnerable since it was Biggins that killed the Lottery lease in committee and then the gaming bill died on a procedural vote on the floor with Republicans voting in the majority.

Either way I don’t think Watson’s members who voted for the four pieces of the capital bill were too happy to see the IMA letter, and the ones who are on the ballot are probably hoping that it doesn’t get used against them this fall.

Interesting dynamics at play.

Comment by Anon Thursday, Jun 19, 08 @ 10:40 am
I for one do not support the Capital Plan based on the lack of revenue the State is taking in versus the expenditures the State is paying out. It is totally b.s. to place this type of debt on our future tax payers.
Rep. John Bradley is to be commended for stopping this white elephant. The Senator from the 59th District is in the tank with Rod and Emil. According to Gary Forby its doom and gloom if this plan does not pass.
The majority of people that pay taxes in Illinois are tired of the games our elected officials have been playing and are not falling for these type of tactics.
Since recall was killed and the pay raises for our elected officials will go in play after the November elections. The voting public of Illinois has to let them know in November with mass turnouts in the districts that are up for grabs and start cleaning the house one district at a time. Our kids and grandkids future depends on this if Illinois wants to keep them here.

Comment by Southern Illinois Thursday, Jun 19, 08 @ 10:43 am
The lottery deal is evcen worse then described. The lottery has steadily increased the revenues it produces. In roughly 8-10 years it will not be earning 600 mill, (656mil) it will be earning closer to 1 Bill a year! It is not a 30 Billion dollar asset, over 50 years at 3-5% growth we are really looking at a 50+ Billion asset.

Comment by Ghost Thursday, Jun 19, 08 @ 11:02 am
While there are scant details on the Illinois Works webpage, it appears that the majority of the funds will be from a one-time source (lottery lease and gaming expansion).

This introduces one of the larger problems that has always been a part of roadway funding here in Illinois - the yo-yo effect of funding.

We pass a transportation bill - lots of money, less contractors around to handle it, so via supply and demand, the costs go up. Then 3-4 years into the bill, funding starts to decrease, contractors start going out of business.

Instead of one-time funding sources and bonding, we need to have a stable, year after year, funding mechanism for transportation.

Comment by trafficmatt Thursday, Jun 19, 08 @ 11:29 am
Team Sleep-

As far as I know, the highway and transit components of the capital bill are the only ones where federal matching funds are involved. I agree it makes sense to put some kind of state funding plan together to leverage those funds. And it would probably be on the order of $3 to 4 billion of state money to be raised. Far less ambitious than the $34 billion plan (some of which counts the federal $), but far more doable.

Also-when and if state assets are leased, we should prefer capital investments that last til the end of the lease period, and not to invest in stuff that’ll fall apart halfway into the lease period.

Comment by Six Degrees of Separation Thursday, Jun 19, 08 @ 11:33 am
One of the glaring mistakes in the “Illinois Works” bill is that it does not include the $75 million to build the Western Illinois University-Quad Cities Riverfront Campus. Once they get that mistake rectified, the bill should be ready to sail.

Comment by No Spin Zone Thursday, Jun 19, 08 @ 11:37 am
trafficmatt, you’ve hit on the one big problem I’ve always had with the way our government treats infrastructure spending. Why not try to have a level program that stays consistent? This would result in much more stability in the job market, and forces the legislature to find a logical, consistent means to fund the program, rather than one-time mortgaging out a finincial boon like the lottery. I suppose it’s far too logical of a solution to the cyclical crisis that’s created in the absence of such a program, and a governor would not be able to toot his own horn so much when he does get something put together for a massive capital spending plan, even when it financially handcuffs the state for years to come.

Comment by BigDog Thursday, Jun 19, 08 @ 11:39 am
Interesting dynamics, indeed. Another example of the shifting and unusual relationships Rich was talking about yesterday on the Hoffman thread.

Good for the IMA. The hocus-pocus-dominocus of the funding plan has been taken as an article of faith by people who should know better.

Comment by wordslinger Thursday, Jun 19, 08 @ 11:54 am
Thanks for the translation. I’m not sure I could have gleaned that from Forby’s statement.

This admin. shouldn’t be trusted with lunch money, let alone $35 billion.

Comment by Ex State Thursday, Jun 19, 08 @ 12:15 pm
BigDog,

Thanks

I think it has more to do with politicians beating able to beat their chests that they “brought home the bacon” than smart government

Comment by trafficmatt Thursday, Jun 19, 08 @ 12:22 pm
Another problem with the Governor’s capital plan is that the existing riverboats aren’t too keen on it. As everyone knows, the plan would allow them to increase the number of gaming positions they operate. I’ve been told by industry insiders that they all would have to build new boats to do so. They question whether this is a wise investment when they have to pay 70 percent in taxes to Illinois. They could go to 38 other states and get a better deal.

Comment by GA Watcher Thursday, Jun 19, 08 @ 1:39 pm
It’s not just the taxes, but the price for each new position.

Then again, I’d pay for two to put on my boat.

Comment by Rich Miller Thursday, Jun 19, 08 @ 1:45 pm
It is too bad that all the discussions, polls, and exhortations from the general public are completely ignored by the pols. We are no more influential than the sound of a fly buzzing around their heads. And forget the promises to do good and leave office….Shimkus. Not going to happen.

Comment by Chanson Thursday, Jun 19, 08 @ 2:54 pm
I just can’t believe we keep electing Gary Forby! What in the world are we thinking. Somehow, Somewhere, there has to be someone that better represent Southern Illinois.

Comment by JI Thursday, Jun 19, 08 @ 2:59 pm
Forby is a superstar — we all agree, but he forgot to tell the crowd that Chicago agreed to pay $200 million for the casino not the $500 million the Senate bill wants. I know The Superstar probably got tripped up on all dem high falutin’ numbers ( it is kinda like Bush and divisification) but 2.5 times over the agreed amount can cause a problem.
Maybe he could get a wig and become a new SpinSister?

Comment by DumberThanUThink Thursday, Jun 19, 08 @ 5:20 pm
If Forby got a Blagojevich administration job in Springfield, I wouldn’t shed a tear over it. The fundamental issue down here in Southern Illinois is trying to get the capital necessary to rebuild SIU into the type of campus that can be an economic engine for the region.

Comment by iPhone Thursday, Jun 19, 08 @ 6:47 pm
It’s the FEDERAL capital dollars that cta and rta have diverted to ops, not state capital dollars. The federal rules are more flexible because the dollars are not muni bonds. Tattler’s point is that the state was so slow fixing the operating piece that it exacerbated the problem caused by the lack of a state capital program.

Comment by Prairie Sage Friday, Jun 20, 08 @ 6:15 am