DATA ABOUT ENTERPRISE ZONES
Since being established, the zones have contributed to the creation of more than 900,000 jobs and led to nearly $50 billion in associated revenue. Bipartisan legislation, Senate Bill 3688, has been introduced to extend the length of the zones by 25 years, create up to 10 new zones over the next 10 years, and implement transparency and accountability for these zones.
Lawmakers anticipate the public hearing and review period will provide helpful feedback from business and community leaders that will enable the state to improve effectiveness of the zones going forward. As the state looks to improve the economy and create jobs, many legislators say that enterprise zones should be a key component of that growth.
Three additional hearings are planned for Peoria, Rockford, and Chicago. Exact dates and times are yet to be determined.
STATE BORROWS MORE, PAYS MORE
The need for economic development and addressing the state’s fiscal problems was underscored during the week when the state borrowed $575 million for capital construction bonds March 13.
Illinois received another reminder of the costs and risks of its ongoing budget woes when the state paid a 4.19 percent interest rate with the latest bond sale, up from 3.9 percent in January. The Bond Buyer, a financial newspaper, reported “Illinois continues to pay an interest-rate penalty for its fiscal challenges, which include mammoth unfunded pension liabilities, an $8 billion backlog in bills and rising Medicaid expenses….”
With the state’s credit rating ranking at or near the bottom in the nation, Illinois taxpayers are paying about 1.5 percent more in interest charges than the best-rated government bonds.
Illinois is already saddled with the worst credit rating in the nation by one of the major bond rating firms, and state lawmakers received a warning from another rating agency. The Fitch Ratings service cautioned before the bond sale that “additional payment deferrals in the budget, could lead to negative rating action.”
WHAT IT MEANS FOR BUDGET
The Fitch caution is significant because avoiding those additional payment deferrals will require a budget that cuts at least $2.7 billion out of the Medicaid program and holds almost all other areas of the budget to zero or negative growth.