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Weekly Review Forward the Weekly Review using the forward link at the bottom of the page!
January 13, 2009
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From the Capitol |
Last Friday, January 9, the Illinois House of
Representatives impeached Governor Rod Blagojevich by a vote
of 114-1-1
(HR 1671). The
Senate is scheduled to take up the matter on January 26th.
Background On December 9, 2008 Governor Rod Blagojevich was arrested on corruption charges including attempting to sell President-elect Barack Obama's vacant U.S. Senate seat. Governor Blagojevich claims he has done nothing wrong and remains in office. Following his arrest the Illinois House created a Special Investigative Committee to investigate any misconduct and to make a recommendation to the full House on impeachment. (View the members here). The Committee met regularly, discussing matters such as the expansion of the FamilyCare program, audits by the Auditor General's Office and the government's criminal complaint against the Governor. The Governor was represented by his attorney, Ed Genson in Committee. On January 8th, the Committee recommended impeachment to the full house on a vote of 21-0-0. The Final Report of the Special Investigations Committee as well as other Committee documents can be accessed here. Vacant Senate Seat On December 30, 2008, Governor Blagojevich appointed former Illinois Attorney General and State Comptroller Roland Burris to the U.S. Senate seat vacated by President-elect Barack Obama (also the Senate seat the Governor allegedly tried to sell). Burris is expected to be seated this week. On Monday, the Secretary of the U.S. Senate released the following statement: "The new credentials presented today on behalf of Mr. Burris now satisfy Senate Rules and validate his appointment to the vacant Illinois Senate seat" according to NBC News. |
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Short Term Borrowing |
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State of Illinois Bond Rating Lowered State Borrows $1.4 Billion to Relieve Cash Flow Pressures: Must Pay Back at 3.99%
As reported by the Commission on Government Forecasting
and Accountability, in December the State competitively
bid $1.4 billion in General Obligation Bond
Certificates. Proceeds were deposited into the General
Revenue Fund to relieve cash flow pressures. The state
must pay back the bonds at a 3.99 percentage rate or a
debt service of $26.7 million.
How Governor Blagojevich's Indictment Affects Illinois' Bond Rating, Interest Rates and Debt Service on Bonds The competitive bid process for the bonds had to be extended to allow for language to be rewritten concerning the federal complaint against the Governor and possible litigation and then signed off by the Attorney General. COGFA reports that in December, Fitch Ratings downgraded Illinois General Obligation bond rating from AA to AA- with a stable outlook. Fitch based the downgrade on:
"The rating
downgrade reflects deterioration of the state's
fiscal position and a continuing inability to
achieve solutions...given the controversy and
uncertainty surrounding the Governor's situation, as
well as the inability last fiscal year, and so far
this year, to achieve a consensus on corrective
measures, it is unclear at this time how budgetary
solutions will move forward and be implemented".
The State's rating is important because it affects the number of firms that bid on certificates and the interest rate at which the State must pay the bonds back. COGFA writes that the downgraded rating was one of the reasons there was little interest in the certificates. J.P. Morgan won the bid on the Certificates at a 3.99 percent interest rate or debt service of $26.7 million. Compare that interest rate and debt service to the last two times the State sold General Obligation Bond Certificates. In April 2008 the State sold $1.2 billion in Certificates for which it paid only $3.5 million in debt service and just last Spring paid 1.94% and 2.1% on $1.2 billion in General Obligation Bond Certificates. The higher interest rate and debt service the State must pay back, the less it has money to fund public services.
Other Rating Agencies
According to COGFA, also in December, Standard and Poor's put Illinois' G.O. bonds on its credit ratings watch list for a possible negative downgrade. S&P reported:
"The CreditWatch
placement reflects our opinion of the state's
growing budgetary shortfall, now projected at $2.0
billion for the current fiscal year, and our concern
that the legal charges now facing the governor and
his chief of staff may challenge the state to
respond to this fiscal situation on a timely basis."
[www.ratingsdirect.com, S&PCORRECTED: "Illinois' GO
Rating Placed On CreditWatch Negative", December 11,
2008].
Moody's reaffirmed the State's Aa3 rating with a stable outlook, while giving the State's G.O. Certificates a MIG 2 rating, lower than the MIG 1 ratings given to the G.O. Certificates of April 2008 and September 2007. |
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December Revenues |
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December
Revenues grow Due to Increased Federal Funding
In the December Monthly Revenue Report, the Commission on Government Forecasting and Accountability reported December revenues grew $275 million due to an increase in federal reimbursable funding. Federal sources grew $379 million in December 2008 over December 2007 because an increase in federal reimbursable spending to Illinois was triggered when the State sold $1.4 billion in short-term borrowing and then doled it out. December 2008 Compared to December 2007: Gains
Losses
Through the first half of Fiscal Year 2009 overall base revenues are down $477 million. For more information and analysis on revenue and budget topics visit the CTBA website at: http://www.ctbaonline.org Read the COGFA December 2008 Revenue Report here |
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CTBA Symposium |
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Save the Date
CTBA's 8th
Annual Fiscal Symposium
A panel discussion on how the current economic downturn is affecting Illinois' ability to provide crucial public services. Monday, February 23, 2009 Registration: 8:15 am Continental Breakfast: 8:30 am Program: 9:00 am to 12:30 pm Union League Club of Chicago 69 West Jackson Blvd. Main Lounge, 2nd Floor Chicago, Illinois Details and Registration Form will be forthcoming |
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Calendar |
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WHAT:
Loyola University Chicago
School of Law Public Interest Law Reporter Symposium Separate and Unequal: The Socioeconomic Realities of American Public Education WHEN: Friday, February 6, 2009 8am to 4pm WHERE: Loyola Law Center Ceremonial Courtroom 25 East Pearson Street Chicago, IL INFO: Loyola University Chicago School of Law is pleased to present this important symposium at no charge. However, seating is limited. To register, please e-mail: PILR-Symposium@luc.edu WHAT: Leadership for Diversity Conference Social Justice for Illinois Schools Pre K-12 WHEN: Friday-Saturday, January 30-31, 2009 WHERE: Bradley University · Robert H. Michel Student Center · Peoria, IL INFO: The purpose of this conference is to promote a statewide dialogue about best leadership practices to promote learning in diverse environments. We seek to understand policy implications at the local, state, and national levels that affect all stakeholders in diverse settings. It is our hope that from this dialogue will emerge effective leadership practices that build inclusive learning communities where diversity is valued, respected and promoted. Keynote Speakers: Dr. Linda Skrla, Associate Dean for Research, P-16 Initiatives, & International Programs, Texas A&M University, Ralph Martire, Executive Director, Center for Tax and Budget Accountability, Phillip Jackson, Founder & CEO, The Black Star Project Registration Fees: Friday Afternoon Diversity & Inclusion Awareness Workshop $50.00 Friday Evening $50.00 Saturday $125.00 CPDU credit available - $15.00 Register online at www.iwel.org. (Deadline for registration is January 9th.) Questions? Contact Dr. Jenny Tripses at 309-677-3593 or jtripses@bradley.edu WHAT: Dupage Federation on Human Services Reform, Making the Connection: Accessing Public Benefits for Low Income Persons WHEN: October 1, 8, 15, 22, 29 February 18, 25 March 4, 11, 18 June 3, 10, 17, 24 July 1 WHERE: All trainings held at NIU Naperville, 1120 Diehl Road, Naperville, IL INFO: Making the Connection training sessions contain information in an easy-to-understand format regarding many programs available to assist low income persons. Individuals who register for a Making the Connection training session now receive membership access to the Federation's newly developed Making the Connection Illinois website, www.mtcil.org. To register and for more information please visit www.dupagefederation.org. |
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Do you have something to add to the Weekly Review? email Chrissy Mancini @ cmancini@ctbaonline.org ___________________________________________________________________________ Center for Tax and Budget Accountability 70 East Lake Street, Suite 1700 Chicago, IL 60601 312-332-1041 www.ctbaonline.org |
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