August 25, 2017
To the Honorable
Members of
The Illinois House of
Representatives,
100th General
Assembly:
Today,
I return House Bill 3004 with specific recommendations for change.
This
bill amends the Regional Transportation Authority Act to extend the short-term
borrowing period for the Regional Transit Authority (RTA). Specifically, this
bill renews a $300 million short-term borrowing ability for two additional years,
changing the sunset date from July 1, 2018, to July 1, 2020. The bill also
allows the RTA to establish lines of credit in addition to issuing working cash
notes.
This
funding option is critical to helping the Authority maintain regular operations
because the State of Illinois is behind on payments to the RTA. Without this
financing authority, there likely will be fare hikes and service cuts to
Chicago Transit Authority (CTA), Metra, and Pace transit systems. I support
this piece of the legislation to help ensure our residents’ uninterrupted
access to key transit systems.
Unfortunately,
this bill also includes provisions that address the event of debt default by
the CTA or the RTA. Under this legislation, the Treasurer can purchase CTA and
RTA debt instruments and intercept funds normally distributed by the State to
these systems in the case of default. These provisions of the legislation
create a moral hazard by granting the Treasurer the authority to purchase bonds
in or at risk of default, and it prioritizes debt payments over other uses of
financial resources if there is a default.
The
State should not undermine the CTA’s or RTA’s ability to determine how to spend
State funds in the event of debt default. In fact, withholding State funds from
these transit Authorities in the event of default prioritizes bondholders over
residents who rely on CTA and RTA services.
Therefore,
pursuant to Section 9(e) of Article IV of the Illinois Constitution of 1970, I
hereby return House Bill 3004, entitled “AN ACT concerning local governments,” with
the following specific recommendations for change:
On page 9, by
replacing line 11 with: “due or about to become due in Interim Financing
Notes.”;
and
By deleting page 9, line 12 through page 10,
line 4; and
On page 24, by
replacing page line 9 with: “due or about to become due in
Working Cash Notes.”; and
By deleting page 24, line 10 through page 25,
line 2.
On page 25 by replacing line 5 with: “issuance
of notes or other obligations,”; and
On page 25, by deleting line 6; and
On page 25, by replacing line 7 with “in an
amount not to exceed”
With
these changes, House Bill 3004 will have my approval. I respectfully request
your concurrence.
Sincerely,
Bruce Rauner
GOVERNOR