“Reimagine Illinois” important to families throughout the state. The Reimagine Illinois platform, introduced by the House Republican Caucus earlier this month, calls for treating recent upheavals in Illinois’ economy and politics as an opportunity for new thinking. Our members’ four goals include:
- Ending the culture of corruption
- Responsible fiscal leadership
- Growing jobs and opportunities for our families
- Ensuring public safety
Similar messages are being spread by House Republican members from the Quad Cities, which borders Iowa; by members from the Rockford area and McHenry County, which border on Wisconsin; by House Republicans from Kankakee, Danville, and other areas that are adjacent to Indiana; and by our southernmost members, Reps. Paul Jacobs, Dave Severin and Patrick Windhorst, who represent the counties that are next to Kentucky. All of these regions have been hard-hit by the failed policies of the Democrat majority.
BUDGET
Major credit rating revision; more than $1.6 billion in new debt issued. There was a slight uptick in Illinois’ credit rating this week, but Illinois’ debt load continued to increase in March. Moody’s maintained its near-junk rating on State of Illinois general obligation debt of Baa3, the lowest level of investment-grade securities. The Moody’s ranking of Baa3 is equivalent to the BBB- terminology used by other major credit rating firms that also track Illinois’ debts. Moody’s also revised its outlook on Illinois debt from “negative” to “stable.” The changed outlook paralleled trends in State revenues to be derived in late FY21 and FY22 by cash infusions from federal stimulus spending. Political changes in Congress have led to enactment of major new one-time help for the 50 states. Nothing in federal law includes permanency for most of these new cash flows, and Illinois’ financial status remained precarious as the spring tax-filing season continued.
Earlier in March, Springfield floated a massive sheaf of new bonds, with $1.658 billion in interest-bearing debt securities sold to investors. The bonds, which were priced at varying interest rates and maturity dates, will require the State to make interest payments until calendar year 2046. Illinois will pay market interest rates based on its Baa3/BBB- near-junk-bond credit rating, with interest rates ranging from 0.69% for short-term debt due in 2022, to 2.75% for 25-year debt due in 2046.
Bond market observers pointed out that the relatively low interest rates seen by Illinois in the Wall Street market this week were a by-product of overall rock-bottom conditions facing borrowers and lenders. A triple-A borrower asking this week for short-term money, and promising to repay it after 12 months in 2022, could get loan funds for an interest rate of about 0.06%. This meant that Illinois with its BBB- rating was required to pay a short-term rate that is more than 11 times the rate that a triple-A (AAA) borrower must offer (0.69% vs. 0.06%). The 0.63% differential, called by financiers a 63-basis point spread, reflected the difference between the interest rate a triple-A borrower had to pay this week and what Illinois had to pay.
The Illinois bond sale took place on March 16. The Moody’s credit rating outlook change was released on Friday, March 26.
CHICAGO
Progress on Thompson Center redevelopment. In a move long pushed by House Republican Leader Jim Durkin and other members of the House Republican Caucus, the State is moving forward with plans to redevelop the Loop city block that holds the James R. Thompson Center. The Thompson Center is a major State office building that, in non-pandemic times, serves as a base for many state government employees in the Chicago area. The State has taken steps to acquire rights to other office-space property located elsewhere in the downtown-Chicago area, an initial step in what could lead to vacating the 1980s-era building and preparing it for demolition. The State would earn a substantial one-time return from selling the valuable LaSalle Street real estate on which the Thompson Center sits.
In addition to earning a one-time return to the State from the sale of the Thompson Center, redevelopment of the block could also bolster the status of LaSalle Street as a global financial center. Potential developers are preparing bids for the square block to become the footing for what could be one of the Loop’s tallest skyscrapers.
In order for a taller skyscraper to be built where the Thompson Center now stands, the Chicago City Council will have to grant zoning concessions to the future developer. In a typical deal, the developer will offer to help obtain secondary financing for city of Chicago grants and loans to applicants in quasi-redlined neighborhoods of Chicago where conventional financing is tough to get. Council members began to discuss a Thompson Center Block zoning changethis week.
COVID-19
Progress in vaccinating Illinois seniors. With improved supplies of coronavirus vaccine, work is continuing on the immunization of patients with first-level eligibility status. In Illinois, most of these people are senior citizens over the age of 65. The Illinois Department of Public Health (IDPH) reported this week that almost two-thirds of all Illinois seniors had received at least one vaccine dose. For most of the vaccines approved for use in the United States, two doses are required for full immunization.
Millions of Illinoisans have not yet been vaccinated against COVID-19. However, progress is being achieved at vaccinating Illinoisans who, by reasons of their age or their job, have first-level eligibility status. Illinois coronavirus case count numbers are starting to show a significant slowdown in the transmission of the disease in the state. Many Illinoisans are calling for Illinois’ vaccination progress to lead to a significant speedup in implementation of the “bridge phase” of Illinois business reopening. This will enable increased work and jobs in places such as restaurants, taverns, gyms and other recreational facilities.
Illinois continues to remember those who lost their lives because of this deadly pandemic. More than 21,000 deaths are officially attributed to COVID-19 in Illinois, and thousands more deaths may have been associated with the epidemic and its medical effects.
JOBS
Statewide Unemployment Rate Down, Jobs Up in February 2021. The Illinois Department of Employment Security(IDES) announced Thursday that the unemployment rate decreased -0.3 percentage point to 7.4 percent, while nonfarm payrolls were up +21,100 jobs in February, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. The January monthly change in payrolls was revised from the preliminary report, rising from +9,700 to +23,200 jobs. The January unemployment rate was unchanged from the preliminary report, remaining at 7.7 percent.
The February payroll jobs estimate and unemployment rate reflects activity for the week including the 12th. The BLS has published FAQs for the February payroll jobs and the unemployment rate.
In February, the three industry sectors with the largest over-the-month gains in employment were: Leisure and Hospitality (+32,300), Trade, Transportation and Utilities (+2,400) and Information (+700). The industry sectors that reported the largest monthly payroll declines were: Construction (-5,600), Professional and Business Services (-4,500) and Government (-2,200).
The state’s unemployment rate was +1.2 percentage points higher than the national unemployment rate reported for February, which was 6.2 percent, down -0.1 percentage point from the previous month. The Illinois unemployment rate was up +3.8 percentage points from a year ago when it was 3.6 percent.
Compared to a year ago, nonfarm payroll employment decreased by -461,200 jobs, with losses across all major industries. The industry groups with the largest jobs decreases were: Leisure and Hospitality (-185,700), Educational and Health Services (-62,900) and Government (-54,100). Illinois nonfarm payrolls were down -7.5 percent over-the-year as compared to the nation’s -6.2 percent over-the-year decline in February.
TRANSPORTATION
Revenues for state infrastructure program fell far short in calendar year 2020. Most of Illinois’ capital infrastructure needs are met though State-and-local-generated revenues. Much of this money is raised for transportation, and one of the largest single inflows of money into the fund is the State’s excise tax on motor fuel, the 38-cents-per-gallon levy commonly known as the “gas tax.”
Revenues for transportation and infrastructure fell dramatically short of projections in pandemic-hit calendar year 2020. With stay-at-home orders and business shutdowns, the paid use by Illinoisans of our roads, highways, and mass transit systems dropped sharply. A survey published by the Illinois Economic Policy Institute (IEPI) indicates that when all of these shortfalls are tallied, the accumulated revenue loss totals more than $1 billion.
Some, but not all, of the lost revenue represented vanished gas tax moneys that were not paid over to the State by motor fuel retailers. This is capital money used to repair Illinois’ roads and bridges. Other chunks of this money represent lost operating funds, such as mass transit fares not paid and the Illinois Toll Highway Authority tolls not clicked off by vehicles that would normally pass through the toll plazas.
Parts of Illinois’ transportation usage have partly recovered. After falling approximately 40% in April 2020, usage of Illinois roads and highways by Illinois motor vehicles partly recovered during the remainder of the year and, by December 2020, was down 13% on a year-over-year basis. Other sets of public-sector transport revenues were hit much more dramatically, let by the Chicago-area mass-transit train system Metra. Metra ridership, on a year-over-year basis, dropped approximately 95% in March 2020, with whole trains rolling almost empty of passengers. In January 2021, with Illinoisans urged to maintain social distancing and remain cautious, Metra ridership was still down 90% from what it had been twelve months earlier.
SPRINGTIME IN ILLINOIS
17-year cicadas to emerge this spring. The 17-year cicadas are a woodland insect who live very quietly and underground for much of their lives. Very briefly at the end of their lives, the cicadas experience a great adventure: they dig themselves up out of the ground, climb out into the sunlight, and begin to sing loud mating chirps. The spring of 2021 will be one of the spike in which a significant number of 17-year cicadas will emerge from the ground in Eastern Illinois. Emergence will come in the late springtime, during the final week on May and the first two weeks of June.
The song of the cicada is distinctive and many Illinoisans recognize what the little insects sound like. Spikes in cicada population are happy events for animals, such as frogs and bug-eating birds, that relish them. The insect crop that will emerge to breed this year is called “Brood 10” or “Brood X.” This brood is also found in large numbers in much of Indiana. Members of this brood that reproduce will produce eggs that will go into the ground. Under the earth, the young cicadas of Brood X will develop and wait for their emergence in calendar year 2038.
A major cicada event will also happen in Illinois in 2024, when two broods, Brood XIII and Brood XIX, are both expected to emerge. By coincidence, 2024 will also be the year of a major solar eclipse in Illinois. The moon’s shadow is scheduled to pass over Southern Illinois on April 8, 2024.
WEEK IN REVIEW
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