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Quinn puts hold on transit $$$
4/28/2009 Crains Chicago Business
A mini-capital bill passed with fanfare three weeks ago has hit a landmine in Springfield -- a potentially bad omen as Gov. Pat Quinn and legislative leaders enter the homestretch of what was supposed to be a peaceful and productive session.
What's happened is that, after signing a bill on April 3 to issue $3 billion for bonds for roads and public transit work, Mr. Quinn's office has agreed to release money only for roads.
The $1-billion portion that was supposed to go for new buses, train repairs and related items will have to wait, at least for now, flabbergasted transit leaders were told in a meeting with Jack Lavin, Mr. Quinn's chief operating officer.
Mr. Quinn's spokeswoman says road work can begin right away because the state's road fund has existing revenue sources that can support $640 million appropriated for road projects. Mr. Quinn "believed it was critical to pass the Jump Start Capital Plan to get shovel-ready roads projects going in May so we can start putting people to work," she says.
But the transit work is different, according to the governor's office. It requires the Legislature to pass "revenue enhancements" to pay off the bonds, and that has not yet occurred, the spokeswoman says. The transit agencies can use the time to get their projects shovel ready, she
Squabbles over how to pay -- gasoline tax, license fees, privatization of the tollway, expanded gambling, whatever -- have been among the factors holding up a much bigger capital bill for many years. The mini-capital bill was supposedly a sign that, with the evil Rod Blagojevich gone, state government would start working again, and not just on capital projects.
Is that now at risk?
House Speaker Michael Madigan's spokesman refrained from harsh language when asked about the above. But he made it clear the speaker does not agree with Mr. Quinn's interpretation.
"The agreement that passed was based on a $28-billion revenue stream that already exists," said the spokesman, referring to the state's General Revenue Funds, which were supposed to finance the transit bonds. "There was an agreement between the administration and the Legislature to
pass this capital plan."
If putting people to work building highways is a priority, so is putting people to work on projects for the Chicago Transit Authority and Metra, the spokesman added. "The same construction season that applies to roads applies to transit."
Look for the governor and legislative leaders to take up this matter when they meet later this week. It could get quietly worked out. It also could really blow up.
**** Update: In a late afternoon phone call, Pat Quinn's press secretary, Bob Reed, issued some reassuring words for the transit guys...kind of.
Mr. Reed said the governor has "every intention of using general revenues to pay for" the transit bonds and "believes" it can be done even if the legislature fails to enhance revenues later this year. But the gov ain't promising how much or how soon.
Asked if the state will pay for all or just some of the promised $1 billion in transit bonds if there is no revenue enhancement, Mr. Reed replied "some, depending on the amount of money that's available." Asked when Mr. Lavin's ban on transit agencies spending the promised money will be
lifted, Mr. Reed replied, "In a reasonable time."
Of course, the road guys already have the green light to spend now.
Mr. Reed also suggested that temporary Medicaid-related cash flow problems are putting a crimp in things. But I'm not quite sure how that fits in, because debt service on the transit bonds would not begin at least for a couple of months.
Mr. Reed also said that the transit projects would have to be approved by the Illinois Department of Transportation. If that's more than perfunctory, look for big yaps from the CTA and Metra.
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