Gov. Pat Quinn signs alternate revenue bond bill
If McHenry County College decides to borrow through alternate revenue bonds, a new law taking effect next year will make it harder to do so and easier for taxpayers to challenge it.
Gov. Pat Quinn on Friday signed into law House Bill 983, written by state Rep. David McSweeney, R-Barrington Hills, which limits most governments’ authority to issue the bonds. Alternate revenue bonds – known to municipal lenders as double-barreled bonds – rely on an identified revenue stream to pay them off. But if revenue falls short of projections, taxpayers are left to make up the difference through their property taxes.
McSweeney said he introduced the bill after college officials indicated they could use the bonds to pay for a proposed expansion and repay the debt from a proposed health club.
But he also cited the village of Lakewood, where taxpayers for years repaid bonds to pay for the purchase of RedTail Golf Course because golf revenues fell short of covering the debt.
“I think this is going to protect taxpayers,” McSweeney said. “The problem with these alternate revenue bonds, like the Lakewood golf course, is that the taxpayers get stuck with the bill.”
Under the new law, governments that want to issue alternate revenue bonds must appoint an independent accountant or feasibility analyst who would not benefit from the project to determine whether the revenue streams identified by the taxing body will support the borrowing.
It also lowers the number of signatures needed for taxpayers to force the bonds to a referendum. The bill lowers the signature threshold in districts with 4,000 or more registered voters to the lesser of 5 percent or 5,000 signatures and increases the deadline to file the petition from 30 days to 45.
McSweeney’s bill applies to governments with fewer than 500,000 residents and takes effect Jan. 1.
McSweeney’s fellow McHenry County lawmakers helped carry the bill. Rep. Jack Franks, D-Marengo, was chief House co-sponsor, and Sens. Pam Althoff, R-McHenry, and Dan Duffy, R-Lake Barrington, carried it through the Senate. The bill was the first piece of legislation from McSweeney, who was elected last November, signed into law.
To learn more
You can read the text of House Bill 983 at the General Assembly’s website at www.ilga.gov.