When is a Plan not a Plan?
When its details are secret, of course.
What do Governor Blagojevich and State Senator James Meeks have cooking? That's what a lot of political folks are likely to be wondering this weekend.
Lots of folks are going to be wondering if the Gov's plan is to sell the Tollway Authority. SEIU Local 73 sure will be wondering, since the proposal likely puts their members out of a job. Suburban drivers will certainly be wondering, since the sale of the Skyway by the City of Chicago was followed immediately by a 25% toll hike. And as the Bloomington Pantagraph reminds us, the Governor's proposed sale of the Tollway Offices in Chicago - the "Taj Mahal" as they were dubbed - never materialized, so Meeks and others should be asking what the Governor's Plan B is, if Plan A falls through.
And of course, education funding reform advocates will be wondering too, since Governor Blagojevich did not talk to them first to find out if his plan would pass muster. From A Plus Illinois:
Does the Governor Have an A+ Education Plan?
To address the fundamental problems with our current school funding system, the governor must put forth a plan that meets all of the following principles:
- Increases the state's investment in education to ensure every school has adequate resources, following the recommendations of the Education Funding Advisory Board.
- Provides meaningful property-tax relief for homeowners and businesses by shifting the balance of school funding away from local property taxes.
- Promotes accountability to ensure excellence in local schools and efficient delivery of public services by state and local governments.
- Protects health, human and public services that are vital to the well-being of children and families.
Our state cannot fully meet its responsibilities to our students unless a plan includes these key components. We'll keep you posted as we receive further details about the governor's plan.
Meanwhile, WBEZ reports that gubernatorial candidate Judy Baar Topinka (who also has yet to offer a plan of her own) is still keeping the door open for a property tax swap.
17 comments:
The absolute horsesh*t in this plan will be that it is not geared towards capital improvements, i.e. swapping one captial asset for another, but instead to meet short term spending goals on education, to get Rod, Jesse and Meeks short term political benefit.
What happens when this money is gone, as it will be eventually? Sell the Capitol? Give a corporation the naming rights to Lincoln's House and let them put a bign sign on it?
All that I'm certain of is that this smells like the mother of all budget gimmicks. ON NOVEMBER 7, SAY "NO" TO FOUR MORE YEARS OF BLAGO MISMANAGEMENT!
Yellow Dog, for just a few minutes, let's put aside our partisan identities and just talk about numbers -- which don't spin nearly as well.
The Pantagraph editorial says the tollways take in about $600 million in gross revenues. The story also says about $200 million is spent on operation and maintenance.
So, let's assume that the best any private investor can hope for is about $400 million return on investment per year. (That's wildly optimistic, because it presumes they will suck every single cent they can out of the system and hold back nothing for future improvements, major reconstruction, expansion, etc.)
Assuming they want at least a 10% return on investment, that means the going rate would be, at most, about $4 billion. Let's say they expect a more reasonable 15% return, the value of the lease would be closer to $2.6 billion.
That's a lot less than the $14 billion figure being tossed about.
Why does this matter? Because if the Governor's plan presumes an upfront payment that's outside the $2-$4 billion range, we should be very skeptical.
Either no company will take "the deal" or there will need to be significant sweeteners and side deals cut to make it attractive.
Possible side deals:
State guarantees a return by pledging to pick up revenue shortfalls;
Operators have flexibility to reduce operating costs (void union contracts, cut pay, reduce workforce, reduce benefits, privatize services, hire undocumented workers,etc.);
State assumes a share of financial resonsibilities (paying for future improvements, etc.);
Buyers have the ability to increase revenues (toll hikes).
We can debate the merits of the idea, but first we need to look at the basic financial realities.
I'd love for someone to explain to me how it could ever make financial sense for a company to pay $14 billion upfront to get $621 million in GROSS revenues. They'd do better buying a CD from the neighborhood bank.
I have to see it to believe it
Even if Rev. Meeks got what he was looking for in this deal, this doesn't excuse the fact that the governor has been a lousy governor. He may have eliminated one opponent, but I don't think he deserves one more year.
Hopefully there is some type of School Choice.
Leasing the tollroads is a HORRIBLE idea. Legislators need look no further than Indiana to see what happened once they did something similar. Many legislators lost their seats once the tolls shot up.
Let's hope that blago and his legislative buddies remember to pay back the funds they stole from State Pension systems by raping the retirees and future taxpayers. Yeah, fat chance.
This tollway deal should not even be discussed till after the election and then Topinka should have an independant commission decide whether this is a good idea. Election year blather can only lead to wasteful ideas.
I am not pro-Topinka, but I just can't trust Blagojevich on any of his proposals.
Isn't blackmail fun?
The following was part of an email I sent to Rev. Meeks, who is selling his birthright for a mess of pottage on this deal. He probably was given advice by Rev. Jackson who needs the spotlight shown only on him.
"...(What is necessary is) the return of Education Value to the students in the public school system. We exist in a 21st Century world economy and must educate our children to compete. Raising additional money to feed an underqualified teacher's union has not and will not increase the Value. Instruction is bogged down in education methodology. Subject matter mastery is too often not present, nor is love of that subject. As a minister you know the necessity of these two in inspiring your flock
It goes down to demand, supply and standards.
Here is the Demand side. We must vest every child equally with their share of Federal, State and Local moneys.
We must adjust the Supply side as well. We must permit the family the right of Competitive Choice to any accredited school -- public, charter, private, church or parochial (religious courses taught only outside of normal school hours) and home schooling.
Accreditation is the key. The Illinois State Board of Education is supposed to set Standards. Within the last two years, by admission, it has dumbed down the tests and normed up the results. Parents and students are given the wrong impression of how well their child is doing. On an absolute basis they are satisfied with relative results.
College admissions rejections tell the sordid tale. Public colleges, annually pay more than $2 Billion for remediating accepted entrants as well.
American high schools rank in the bottom percentiles internationally even in the content of Advanced Placement courses. References on request
Our education system without reform must eventually lead us into being a hollow, but expensive second world country..."
A1+ is a mouthpiece for bigger government. The Tax "swap" that HB 750 proposed was not just a trade of income tax and property tax. Analyzed, it provided in sum for a multi-billion dollar tax increase. A+ Illinois people admit this was their goal.
For those that don't know, The education Funding Advisory Board is a shadow organization relaying alleged analytical studies from Augenblick and Myers which allegedly "prove" that more money will raise standards so that our kids match those at lake Woebegone -- everybody above normal. Regression analyses can prove anything depending on how the numbers are manipulated. The Governor asks ISBE (see above for a thought on what they are doing) who laterals it to EFAB, who tasks A&M who -- surprise, surprise -- comes up with a new foundation grant level. Garbage in, garbage out.
No it's not the tollway lease, its the HB750 windfall.
Anybody here think that if the skipper of the Titanic had gotten a raise, the ship would not have sunk? It was a design flaw. Our kids are sinking and we choose the same old solution
Old elephant, using your approach the City would have received just a few hundred million for the Skyway. Fortunately for the taxpayers of chicago, you were not the only bidder, and other bidders (1) believe they can run it more efficiently, (2) have deep pockets interested in long, long-term equity (i.e. Australian pensions, for tax reasons I won't get into here), and (3) can add a growth factor to a simple finance equation -- 1+2+3 added up to $1.8 billion, if the State can get into the game before the Australians run out of cash, Illinois will do a lot better than that.
beta x and Old Elephant --
You don't see a profit margin because you've forgotten that the very first thing the Skyway purchasers did was raise tolls by 25%. When government charges us an arm and a leg to access vital services, like travelling from Point A to Point B, voters call it "tyranny" or "extortion", but when the private sector robs us, we call it "market forces."
Gasoline prices are a fine case-in-point.
When tolls hit $1 in three years, they'll be making money hand-over-fist.
Though we don't the details of any plan yet, It boggles the mind that the rapacious teacher's unions may well get yet another undeserved boost of booty (we could call it the "tollway teat") while the pension funds of IL are still in the red to the tune of over $40 billion.
The idea that the State spends one new dime on ANY program is simply obscene.
extreme wisdom -
Your tired old rants against the teacher's unions went out with Bob Dole.
I'm no socialist, but in case you hadn't heard, the socialist countries have the best schools in the world. France, Sweden, China, Cuba and the Ukraine -- even Venezuela -- all have higher literacy rates than the U.S., so let's not blame the unions.
Are there screw-ups in our schools? Sure. But I'm willing to bet there are fewer screw-ups in our schools than there are in any of your favorite big corporations. And don't give me that line about tenure. You have to commit a crime these days in the corporate world to get canned, unless they eliminate your job altogether or send it to another country -- where the workers can read.
YDD,
There is a big difference. If there is a screw up in a corporation, I don't not have to buy products or do business with that competition.
If I decide to not do business with a Public School, I will go to jail.
Why can't the Left allow the consumer to make up his mind on what type of eduction he wants?
BTW, in France, Catholic School is vouchered by the Government.
JBP
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