The feds have put down a lot of money. And now the State needs to come up with a 20% match? How do we do it?
So if we need to come up with $200 million a year, starting next year, we either have to raise taxes or cut spending by $200 million for the next five years (the federal transportation bill is a five year bill, as I recall), or we can get that billion by raising taxes by only $40 million over the next 25 years, and then borrow the billion dollars (which $40 million over 25 years would generate) by selling a bond to the general public and paying it back with the $40 million.
Illinois likes bonds.
The problem with bonds is that you have to pay more than $40 million over 25 years. You have to pay interest. And you have to pay the bond company to set up the paperwork to sell a billion dollars worth of loans to the public (fees are a percentage of the take and worth millions), which is where some of the shadiness comes into play. That's why clean government conservatives like Steve Rauschenberger are agahst that Bob Kjellander, probably the biggest GOP bigwig in Illinois and a close friend of Karl Rove, is in the bond-selling business as well. It smells like clout as a business model to them, and that's really behind much of the internal strife of the GOP -- much more than abortion rights, say.
I'm not so sure about bonds as a policy. It seems more honest to pay-as-you-go, meaning you raise the money you need in five years instead of raising the money over 40 years but spending it all this year. On the other hand, if the thing that you are buying lasts for 40 years (like a highway), then maybe it makes sense to pay for it over 40 years. But the temptation to move costs that are consumed this year only (like personnel) into the bond money (which is going to be paid in small increments over the next two generations) is very strong, and that's irresponsible. That's a fair critique of some moves of the Blagojevich Administration so far, and hopefully we can figure out a way that won't happen going forward.
Anyway, this issue is at the heart of why Dems would like to elect three more state senators. Right now, a unified state GOP caucus under the relatively ornery Frank Watson can block a bond, because you need 36 senate votes and the Dems only have 33 (with Independent James Meeks). Now that the northwest crescent of Republican senators have announced their retirements, there is a real opportunity for the Dems to flip these rapidly Latino-izing districts and build up 36 votes in the senate, giving us a chance to bond without the consent of Frank Watson.
Governor Blagojevich started to put pressure on the senate Republicans to get behind a bond in the veto session yesterday, as the Tribune puts it here:
As Blagojevich discussed the idea of diverting money from the Prairie Parkway, he also tried to use the project's most significant backer, Hastert, as leverage in urging Republicans to support road-construction bond legislation in Springfield.
"I think it's going to be awfully hard for some of the Republican leaders who have been holding up this legislation to stand in the way of building roads and putting people to work and fixing an infrastructure, including a Prairie Parkway that Speaker Hastert has fought so hard to try to see happen," Blagojevich said.
Because a supermajority vote of lawmakers is required for the state to issue bonds, Republican votes are needed despite Democratic control of the legislature.
But Republicans have balked at Democratic construction bond initiatives. They are distrustful that the Democratic governor would fund initiatives in GOP districts, and they contend he has used road-fund dollars for non-road construction purposes and argue that Blagojevich has resorted to borrowing in lieu of dealing with the state's fiscal woes.
Senate Republican leader Frank Watson of Greenville noted Democrats as well as GOP members have previously rejected Blagojevich's proposed funding sources for new bonds. And Watson said lawmakers in both parties don't trust Blagojevich when it comes to actually releasing money for projects.
"He's got a terrible track record of living up to commitments," said Watson.
So that's the deal.
There is a really unfair critique that Watson and the GOP have of Blagojevich: first the GOP soundly rejects any tax increase like closing a software loophole or raising a cigarette tax (both of which I personally support as good policy) and then they say that Blagojevich won't deal with the state's deficit and instead relies on borrowing. Well, if the GOP won't raise any taxes at all, and they certainly aren't interested in cutting spending, and if the GOP has a veto over any bonding measures, then what else can the Administration do but borrow? The part that I think is unfair is that the GOP hasn't worked to support a revenue source for a bond, but then can complain that there isn't a bond to match the dollars. Maybe this is a premature critique of the senate GOP's action for veto session, since it isn't clear what they are going to do yet, but I do think since they do have a seat at the table on any bonding measures, they have some responsibility to support a revenue source. And if they don't and they veto a bond, then the editorial boards (especially the Trib) shouldn't wrap the GOPers up in a glow of fiscal respectability.