CHICAGO, April 17 (Reuters) - Illinois Governor Pat Quinn said on Wednesday he needs legislative approval this session to issue $2.7 billion of bonds to fund transportation projects.
The Democratic governor said the debt would mark the last segment of the state’s $31 billion Illinois Jobs Now program, which was passed in 2009 and which aims to spur employment through capital spending. He added that there should be a debate on further infrastructure investments and bond issuance.
“I think we can continue to attract major firms from across the world if we invest in transportation, invest in construction,” he told reporters at a Springfield, Illinois, news conference unveiling a six-year, $12.6 billion transportation construction program funded with federal, state and local dollars.
Standing at 9.5 percent in February, Illinois unemployment rate is one of the highest of all the states.
Quinn also acknowledged the Democrat-controlled Legislature has to pass reforms in the spring session that ends May 31 to rein in the state’s ballooning public pension costs. A $96.8 billion unfunded pension liability is weighing on the state’s budget, forcing cuts in core services. It was also the main driver for a series of credit downgrades that has given Illinois the lowest bond ratings among states.
The state’s fiscal problems, which include an unpaid bill backlog that has topped $9 billion, are also costing Illinois money when it issues bonds in the $3.7 trillion U.S. municipal market. Illinois’ so-called credit spread over Municipal Market Data’s benchmark triple-A scale is the second widest among major issuers tracked by MMD. The state’s spread for 10-year bonds in the latest week was 141 basis points versus California’s 61 basis points.