Tuesday, May 20, 2008

Trust plagues Goldie Locks and the three bears

By Bethany Jaeger and Patrick O'Brien
Former U.S. House Speaker Dennis Hastert started and ended a Statehouse news conference Tuesday by underlining the General Assembly and the governor’s troubled task of enacting a capital plan:

“We have about $9.5 billion in federal trust funds for covering a lot of things —highways, water projects, airports, transit — that if we don’t pass a piece of legislation that meets this time period so we can get shovels moving, trucks moving on the highway and take advantage of this construction season, those dollars will start to diminish because the trust fund’s diminishing.”

The other problem is a lack of trust between Gov. Rod Blagojevich and the state legislators. They can’t a) agree on a way to generate revenue to pay for a capital plan and b) spell out how that money will be spent.

Hastert was appointed by the governor along with Southern Illinois University President Glenn Poshard to serve as a buffer and move along negotiations for a statewide infrastructure plan. Hastert described the meetings with the legislative leaders as Goldie Locks and the three bears. The “porridge was never exactly right for everybody.” They drafted a proposal that he said should be acceptable to all. He ended the news conference this way:

“Is this perfect? No. But it’s the best that we could cobble together … and I think it has a very good chance of moving if everybody comes to the table and works together in a process. Will that happen? I can’t predict that. Thank you very much. End of session.”

He and Poshard announced a $31 billion capital plan, up from the governor’s original $25 billion proposal, for everything from water and sewer projects to long-term road projects that have been on hold for years. It also would fund projects for higher education facilities, as well as early childhood education space needs, and many other state and local initiatives for economic development and transportation.

At stake is $9.3 billion in federal earmarks for state projects, which Poshard and Hastert said are dwindling and vulnerable if Illinois doesn’t put forth the matching funds soon. “If we can’t get the job done with what we’ve done in the last highway bill … we don’t have a ghost of a chance getting those numbers again.” Illinois Department of Transportation Secretary Milton Sees said he expects to lose between $3 billion and $4 billion when the feds draft their next highway bill without a timely state match.

The proposed plan would generate those state matching funds by — this should look familiar — leasing the Illinois Lottery for immediate influx of cash; building a Chicago casino and expanding gaming, including slots at racetracks; diverting money from the state’s Road Fund, as well as the state’s main general fund, to back up the construction bonds.

The idea of leasing the lottery and expanding gaming, however, have gotten stuck in the legislative process before. And even if legislators trusted the governor to distribute the money as promised, they would risk alienating some voters by agreeing to privatize a state asset and expand gaming. On the other hand, they might win some supporters by rejecting the idea to raise taxes.

Trust is the underlying issue, however. Poshard said Democrats and Republicans in each chamber submitted priorities and requests, some of which were included in Tuesday’s proposal. But they also had the chance to weigh in on what it would take for them to trust the process of distributing the money, which Poshard and Hastert combined into “accountability provisions.” They include creating a “trust” fund (or lockbox) for revenue to be held until distributed, weekly leaders’ meetings, quarterly reports on status of the funds, a “good faith effort” on behalf of the governor to release the money as soon as money and spending authority are granted, and the trusty “memoranda of understanding,” essentially signed IOUs.

Quote Senate Majority Leader Frank Watson: “We need a lockbox that Houdini can’t get out of.”

But, here’s another telling Hastert quote: “The reason that we’re here is because there’s a stalemate, and we tried to come in —and sometimes fools rush in where angels fear to tread — but to try to bring the parties together. We have brought all five parties together, or, at least 4 and a half, at the table every day.”

Although leaders have been meeting with the governor and his negotiators since April, Illinois House Speaker Michael Madigan sent his majority leader, Rep. Barbara Flynn Currie, on his behalf. And Hastert said when he did meet with Madigan, Madigan listened but didn’t offer anything.

Meanwhile ...
The House started unveiling its version of a budget for the day-to-day operations of the state. That’s the annual budget as opposed to the multi-year capital budget. House Democrats, essentially, are advancing flat budgets for state agencies with some increases for union contracts and administrative costs. House Republicans, however, are banding together to oppose the plan.

Higher education is an exception in that it would get a 3 percent boost in funding, and
the committee unanimously advanced the higher ed budget plans.

We’ll have more on this tomorrow, when the Senate also could unveil legislation for its budget proposal.

Note: It doesn’t look like ethics reform will be called this week. We’ll keep you posted.

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