Our View: Support for alternate bonds bill
When it comes to finances in Illinois, you can’t be too careful.
We’re not, after all, a state known for its fiscal management. Having regulations in place to ensure taxpayer dollars are used well is smart.
Which is why we applaud an effort by state Reps. David McSweeney, R-Barrington Hills, and Jack Franks, D-Marengo, to tighten the local debt reform act as it relates to alternate revenue bonds.
These bonds typically are issued by taxing districts to pay for projects with the understanding that the bonds will be paid for with an identified revenue stream. Voter approval is not needed to issue the bonds, but property taxes automatically are increased to pay for them if the funding stream falls through.
Although alternate revenue bonds often are used with no issues, there is a textbook example in McHenry County that illustrates what can go wrong.
In the 1990s, alternate revenue bonds were used to subsidize Lakewood’s RedTail Golf Course. Taxpayers were left to foot the bill some years when the golf course didn’t take in enough to repay the debt.
The McSweeney-Franks proposal would make it easier for voters to have a say on whether taxing bodies should issue these bonds. It would decrease the number of signatures required to initiate a backdoor referendum, increase the number of days to get said signatures, and require revenue from the project to be able to pay 150 percent of the debt.
McSweeney specifically took aim at McHenry County College’s proposed expansion in crafting the measure. MCC is considering a $42 million project, and alternate revenue bonds have been discussed as a potential way to pay for it.
We’re not opposed to MCC exploring an expansion. MCC is a tremendous asset whose numerous benefits to the community cannot be overstated. The college is making its case for the expansion, including that it would provide more educational space for existing programs, allow the addition of new ones, and allow for more students to attend.
But if there is a chance taxpayers will wind up footing the bill for a capital project, then they should have a say in how said projects are funding.