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11/11/2009

Show Us The Money

   So where does the state of Illinois find $15 million dollars to pay the interest on loans taken by the Regional Transportation Authority?  The RTA will sell $166 million in bonds, perform a regulatory "sleight of hand" to transfer the money to the Chicago Transit Authority, as part of a grand scheme to stave off a fare increase on CTA busses and trains.

   Governor Pat Quinn called the interest payments "debt service" and estimated they would cost Illinois taxpayers "about $5 million or so in the first year, roughly $10 million in the second year." 

   I'm no wizard of finance and was a mediocre math student in high school.  But how does the governor of a state with a $10 billion deficit and at least a three-month backlog of unpaid bills promise to pay the interest on a financially-strapped public agency's loans?  And isn't this the same governor who late last month told us that Illinois itself needed a $900 million "cash management" loan just to make its payroll during the final weeks of 2009?

  A few hours before Quinn announced the transit "deal", a Washington-based think tank called the Pew Center on the States released a report listing Illinois among nine states most at risk of "fiscal calamity".  When I told the Governor about the report during the news conference, incredibly, he said 'that's what I've been saying since January 29th" when he was sworn in.  During his nine months in office, Quinn has tried unsuccessfully to get the General Assembly, mired in election year politics, to pass a tax increase to generate revenue to fill the budget hole.

  Still, it raises eyebrows and questions when the "broke" state announces new spending, even if it is "only" $15 million. 

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