Illinois Business Journal - Blagojevich, Republicans at odds over $3.2 billion capital budget

The $15.6 million expansion of Illinois Rte. 3 in Waterloo, the $25 million relocation of Illinois Rte. 159 around Collinsville and the $14 million extension of Governors' Parkway in Edwardsville - along with billions of dollars of other projects - are all waiting on the passage of the governor's capital improvement program by the General Assembly.

In his State of the State address last month, Gov. Rod Blagojevich proposed borrowing $3.2 billion to pay for these and a host of other capital improvements across the state. Of the $3.2 billion, road improvements would gobble up $2.3 billion and would be repaid by revenues generated out of the road fund. Another $425 million would be devoted to mass transit and would be repaid by existing growth in general revenue fund revenues, and the remainder would be scheduled for school construction projects. The governor has proposed adding keno to the state's lottery operations to cover the school costs.

Becky Carroll, spokeswoman for the governor's Office of Management and Budget, said many of these projects are long overdue.

"The state hasn't had a new capital plan for more than two years," Carroll said, "which means that roads and bridges throughout the state continue to remain in a state of disrepair and those repairs and needed infrastructure improvements continue to get more expensive the longer we wait to fix them and maintain them."

Carroll points out that the plan would help create 230,000 jobs throughout the state of Illinois and would help to buttress the state's economy which, she says, has been moving steadily forward in the right direction over the last year.

"In 2005, for example, we led 44 other states in new job growth," said Carroll. "We experienced 10 months of consecutive job growth as well, which Illinois hasn't experienced since 1996."

The program has gone to the General Assembly, where the governor needs the approval of 60 percent of the delegation in both houses. Blagojevich has found that super majority tough to get since his arrival in the governor's mansion.

"The capital program has really been held up for the last couple of years because the Republicans on the senate side have not voted in favor of it," Carroll said. "That's why we're hoping that they'll put partisanship aside and instead help these school districts that need these capital dollars; help the communities that need new roads or need existing roads to be upgraded to alleviate traffic and congestion; and ultimately help to create 230,000 jobs throughout the state."

But State Sen. Frank Watson, a Republican from Greenville and Senate Minority Leader, says the hang-up isn't with his party; it's with Blagojevich's style of leadership.

"I haven't seen a plan at all and that's a big part of the problem," Watson said. "We've just had press releases. There is no substance. There is no real plan. And that is a big problem."

Watson further says that there is a credibility issue with Blagojevich.

"Trust and credibility is very lacking in this administration," Watson said, "not just among Republicans; Democrats are the same way. They just don't have the trust in the administration to deliver on what it is telling us. So we want to make sure of whatever we vote on. We only get one opportunity to vote. We can authorize the bonds; we can appropriate the money; but only the governor can release it, and we have to have some trust that the governor will actually follow through with what he says he is going to do," he added.

Watson is also skeptical of the administration's claims that current revenue streams will cover much of the debt service on the bonds. He said he wants to see revenue streams dedicated to the retirement of the bonds, but he's not going to take the governor's word for it.

"The state's debt has gone from $9 billion when he (Blagojevich) took office to over $22 billion today," said Watson. "He's more than doubled the debt of the state and he wants to do another $3.2 billion without any kind of revenue source to retire the debt. That's not fiscally responsible. That is a problem."

Watson says he has voted for every capital program that has been brought before the General Assembly, including Gov. James Thompson's Build Illinois Program, Gov. Jim Edgar's School Construction Grant Program and Gov. George Ryan's Illinois FIRST Program.

"I'm for capital," Watson said. "I understand the importance of capital, but I also understand that this administration has a credibility problem with the General Assembly and trust is a real issue."

Carroll says the addition of keno to the state's lottery games will be more than enough to cover the debt on the school improvement bonds. She said the state's lottery department did a study of keno around the country. According to that study, there are 12 other states that have keno and they've all generated significant revenue. The lottery department believes keno will be successful in Illinois and that it will generate at least $80 million per year once the game is fully operational, according to Carroll.

She says that the lottery department can start keno on its own and that no legislative approval is necessary.

"We don't need legislative approval on that because the lottery department here in Illinois issues new games into the market every year," Carroll said. "Just like they do with any other online lottery game, they would be using the same process to introduce keno into the market as well."

But Watson finds that claim hard to believe and has turned to the Attorney General's office to get an opinion as to whether legislative authorization would be necessary to add keno games. He says adding keno is a huge expansion of gambling and that he finds the proposal surprising coming from Blagojevich, who had vowed not to expand gambling in the state.

The two sides seem to be miles apart while billions of dollars in projects wait on a resolution. Watson says he's eager to work on it but that the governor has to make the first move.

"My attitude is, 'Governor, call. Let's sit down and let's talk about it,'" Watson said. "But he has not done that. My phone has been silent. I haven't had one call from the governor's office - not one. He gives a lot of lip service to this, and there are some out there that think the guy is not really serious. He just wants someone to blame, and he is not really serious about wanting to do it."