Capitol Fax.com - Your Illinois News Radar

House returns mid September for Lottery lease bill * UPDATED x1 *

Posted in:

Illinois

*** UPDATE 12:30 pm *** House members have been sent a memo by Speaker Madigan saying they should prepare to return to Springfield next Wednesday at 11 o’clock, with committee hearings at 11:30. They are also being told to prepare to stay overnight for Thursday business. That business will include the Lottery lease a funds sweep and veto overrides.

* I told subscribers about this development yesterday. Not sure why nobody picked up on the interview this past weekend…

Illinois House Speaker Michael Madigan plans to call the chamber back into session this month to consider leasing the Illinois Lottery as a way of paying for a public works construction program.

Appearing on WBBM Chicago radio’s “At Issue” program over the weekend, Madigan said he told Gov. Rod Blagojevich at the Democratic National Convention in Denver last week.

“My plan is to go back to work in September with the idea of passing a bill that would authorize a long-term lease of the lottery where the money could be used for a construction program,” Madigan said.

* More from WBBM’s website…

House Speaker Madigan says his staff has made great progress on a bill to fund news schools, roads and bridges across the state, and it would be funded by leasing the Illinois State Lottery. There could be a vote in Springfield by mid- September. That’s what Madigan and Governor Blagojevich were seen discussing, even before their much ballyhood unity in Denver.

* You can listen to the entire interview by clicking here.

* Madigan was asked about a possible rapproachment with the governor in the wake of the infamous “Denver hug.” Here’s some of his response…

“I plan to take whatever good can come out of it, and I’d recommend that to everybody else. People send us to the Capitol Building in Springfield to be productive… We ought to do that, and if disagreements are standing in the way, then we ought to eliminate at least some of the disagreements so we can show some progress.”

That seems reasonable. Madigan has worked with Blagojevich in the past. It’s been frustrating to see him refuse to do anything with the governor over the past couple of years. We no longer have a government. It’s beyond even a parody of government. So a modicum of cooperation is welcome news, as long as it’s done with open eyes and extreme caution.

* Remember, however, that right now Madigan is only talking about the revenue stream for the capital bill, not the actual spending portion. And there’s no guarantee that the Senate will return, either…

“We passed a lottery bill through the Senate (in the spring),” said Cindy Davidsmeyer, spokeswoman for Senate President Emil Jones, D-Chicago. “We have no information about what the House may or may not consider. Right now, we are not scheduled to be in (Springfield) until the veto session” in November, after the election.

* Also, here’s something else I told readers about yesterday…

If the House does return to Springfield this month, it doesn’t necessarily have to limit its business to a lottery-lease bill. It could also decide to deal with bills vetoed or changed by Blagojevich, including legislation limiting campaign contributions from state contractors.

Brown said no decision’s been made on that. If the House did take up vetoed bills, it would force the Senate to return within two weeks to also consider the bills or they will die.

I think there will be an override of the monster ethics bill AV. Stay tuned.

* The Peoria paper editorialized about that infamous hug today…

The skeptics in us question how a brief embrace can erase months of bitter battling, especially between Blagojevich and Madigan.

Still, it seemed genuine enough. If a little brotherly love can make Illinois government functional again, we’re all for it.

“Genuine enough” compared to what?

posted by Rich Miller
Wednesday, Sep 3, 08 @ 9:28 am

Comments

It seems to me back in the Build Illinois days the projects were line items. I guess the trick then becomes how to ensure money is released for the line items.

Comment by wordslinger Wednesday, Sep 3, 08 @ 9:31 am
If they lease the lottery - I will stop my $20 a week lottery habit. Wonder how many others feel like I do?

Comment by Mr. Ethics Wednesday, Sep 3, 08 @ 9:39 am
I’m confused as to how, in the mind of MJM, the lottery lease became a sound and responsible approach for funding a capital bill. You’re leasing a stable and dedicated state asset for pennies on the dollar for a one-time payout. According to the calculations in the article, $3 billion will be set aside to replace the $600 million generated annually - meaning that the lottery lease will have a term of 5 years. That leaves $7 billion for infrastructure, assuming the lease can net $10 billion. And what happened to the talk of leasing the lottery for pension debt relief?

None of this seems plausible, albeit there are surely a number of unknown details at this juncture.

A $7 billion capital program, or approximately 1/5 of the previously floated capital program, seems paltry and inadequate. Do we continue to lease state assets to fund future capital plans? Somebody pull me off the ledge, please.

Comment by The Doc Wednesday, Sep 3, 08 @ 9:45 am
Sell the Illinois Tollway!
The Infamous Hug, how fake was that?

Comment by Northside Bunker Wednesday, Sep 3, 08 @ 9:52 am
It’s September. This can wait now until there is new and, we hope, more trustworthy leadership in the Senate.

Comment by Excessively rabid Wednesday, Sep 3, 08 @ 9:58 am
Nothing exciting here … just a continuation of the complete disconnect between revenues and spending that persists in Illinois state government

Comment by Gunslinger Wednesday, Sep 3, 08 @ 9:58 am
Leasing the lottorey is the worst idea for revenue ever.

I wonder though if Madigan is moving this forward either because he thinks it will not get enough votes; or if he thinks that at the end of the day there will be no takers. i.e. he is moving it forward to let the last coffin nail be hammered into this miserable scheme.

If he is for the lease then we need a new house leader. it is time to stop borrowing from our future to pay for the present. We can’t keep pushing more and more debt off to the future. leasing the lottery is just giving up future substantial state revenue for a few pennies today.

While we are at it lets lease the State income tax, we can get an annuity that never grows based on todays dollars, by letting a purchaser keep all the growth. The state can then live off a fixed income from leasing all its revenue streams for a flat, no growth amount forever.

Comment by Ghost Wednesday, Sep 3, 08 @ 10:04 am
“Borrowing from the future” isn’t always wrong. If you borrow from the future for long term, capital projects which will benefit the future along the same time line of the borrowing, it makes sense. That’s what most of us do when we take out a mortgage. It’s only wrong when you borrow from the future for current or short term spending needs. Don’t be so indiscriminate with the shibboleth “borrowing from the future”.

Comment by Anonymous Wednesday, Sep 3, 08 @ 10:13 am
The purpose behind coming back and doing something is to once again shift the attention; and blame, to someone else other than House Democratic candidates. This also re-shapes Madigan’s image by some as an obstructionist, by demonstrating the ability to compromise on an idea put forward by the Governor.

The Senate will not come back; citing having already passed a Lotery/Capital Bill already, and if they do, they will not accept the bill as passed by the House, and they would amend it and send the hot potato of perception back.

Neither Madigan or Jones is going to keep their chambers in session during the heart of the campaign this fall. Madigan is just re-casting his image however to make sure it does not cast a long shadow on his various candidates.

The only serious aspect of this effort is to divert attention and shift blame; and it will likely work as the attention challenged media and voting public will only remember the latest episode, and forget all about all the rest of what’s happened. Overt and covert reminders will come during formal campaigns as well as subtle PR.

Comment by Change of Subject Wednesday, Sep 3, 08 @ 10:31 am
Rich made a good point re the spending side of this new and improved capital bill. All hugs aside, I just can’t see Speaker Madigan allowing a bill to be passed which doesn’t include some strict spending guidelines and earmarks.

Comment by Springfield Alum Wednesday, Sep 3, 08 @ 11:26 am
ANonymous there are several assumptions you make which are incorrect. A 40 year lease is long. a 5 year construction program is very short.

Second, you borrowing from the future making its financial status even worse to get a few road repairs contains major flaws. Intially is the job creation myth. The jobs created by the capital program are term limited construction jobs. This provides a short term boost that peters away. We need long lasting jobs. Second, we will always need capital programs to repair roads, schools etc. This solution borrows 40 years of revenue to cover repairs and work for a handful of years. How do we pay for the capital work that will be needed during the 35 years we no longer have the lottery? Next every year after we lease the lottery the education system begins to lose money. The lottery grows at a rate greater then inflation. The flat fee for the lease is stagnant and does not even increase to match inflation. So every year of the lease the State will need new fudning to replace revenue lost from the lottery. AT about the 10-15 years into the lease the State will be giving away 1 Billion in revenue in exchnage for 600k. As the lease progresses the State will start with shortfalls of half a billion which will increase to a shortfall for education of over 1 billion a year. So now the State has no lottery revenue, and educations is out 1 billion a year which must come from somewhere. Meanwhile we still need to fund a capital porgram, plus filling the hole in education. So the future now has no money for a capital program, AND has an additional hole of a billion a year i education to make up. How is this ever a good plan? The money from the loan is long gone, the school buildings and highways are crumpling, but now instead of needing to find proper funding for capital we have to make up the education hole as well.

The only way anyone leases the lottery is because they will be taking money that would normally go to the State as profit. If we can not afford a capital program now then we need to scrap it as being outside our budget, or look for ways to pay for it with present revenue. But saddling the future with huge budget holes for a quicky payout today is the worst thing you can do. The State already was passing along 600k in unpaid medical bills year to year, now that number is over 1.5 Billion with no practical solution.

Also consider that the State is laying off people, increasing the number of unemployed and uninsured in IL. Thos are long term jobs and benefits. The State recieves a greater fiscal bump from long term employment both frm direct, indirect and influenced jobs from thos jobs.

We need responsible revenue streams. The State has developed huge budget problems because it spends money it does not have with the promise to fix it in the future, a future fix that never comes. Enough is enough. No more irresponsible borrowing from the future to pay for solutions today.

We have the road fund to pay for road work. Use that money for roads. If the fund is inadeuate then we need a long term solution to increase the money in the fund so that we have permanent income for ongoing road work.

Enough snake oil salesman fly by night solutions. We need long term funding solutions and plans for school repairs etc. We are making our future worse by coming up with stop gap measures that sell off Assest for decades for a few quickj bucks today.

Comment by Ghost Wednesday, Sep 3, 08 @ 12:01 pm
Adding to the problem are the funds sweeps, which only creates a budget hole for next year.

Comment by Gunslinger Wednesday, Sep 3, 08 @ 12:58 pm
So what happens after the Lottery money is spent? If Ghost and Doc are right the hole simply gets bigger with nothing to fill it. If Lotteys-R-US Inc can make money with a lease, why shouldn’t the state hire them to manage the Lottery and keep the profits. Inflation and rising costs are never going away from the State budget process so why give up significant long term income for a very short term fix. Seems like Madigan is going along to get along, for now.

Comment by zatoichi Wednesday, Sep 3, 08 @ 1:30 pm
I sure hope they take up the need for funding of substance abuse services. The impact of the cuts have been devastating and this winter will be exponentially worse if nothing occurs within the next few weeks. Agencies need weeks if not months to rebuild staff and services to prepare for the “seasonal” clients. Otherwise, hospitials will be footing many millions of dollars in free services.

Comment by midstateanon Wednesday, Sep 3, 08 @ 2:42 pm
Some capital projects do last for 40 years or more, especially bridges and buildings. Also, some “new construction” infrastructure improvements cause a ripple effect of creating jobs from their existence over a period of many years by drawing additional private capital investment to an area. The benefit of selling or leasing capital assets should be measured against the long-term value and fringe benefits of the created assets vs. the cost of turning them over, not the short-term value of the jobs created. Agree wholeheartedly that we should not be selling or leasing long term assets to patch short term budget holes or temporary infrastructure fixes that will fall apart in 10 years or less.

Comment by Six Degrees of Separation Wednesday, Sep 3, 08 @ 2:53 pm