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* Late last month…
The Pritzker administration is poking a $29 million hole in Mayor Lori Lightfoot’s re-election-year budget, a move prompted by slow-to-recover taxes on Chicago hotel rooms but also a sign of continued jostling between the two officials.
Earlier this week, the Illinois Department of Revenue notified the city that the state will be withholding $29 million in sales taxes that ordinarily would go into the city treasury—the so-called local government distributive share. Instead, that money will go to pay debt at the Illinois Sports Facilities Authority, the agency that owns and operates Guaranteed Rate Field, home of the White Sox, and pays the bond debt tied to the 2003 renovation of Soldier Field.
* And while that move may have angered the city a bit (even though state law is what it is and the city is flush with federal dollars), the action pleased S&P, according to the Bond Buyer’s Yvette Shields…
S&P Global Ratings lifted the Illinois Sports Facilities Authority out from junk territory, upgrading the authority to BBB-minus from BB-plus.
The hotel taxes that repay its Soldier Field bonds are on the mend and the agency is no longer putting efforts to spare Chicago’s city government from covering gaps between its tax revenue and debt service.
Hotel taxes still lag the pre-COVID-19 pandemic era and aren’t expected to fully recover until at least 2024, but they are rising and the agency is recommending to its board for a second year in a row that its annual state hotel tax advance — formally known as the “chairman’s certificate” — fully cover debt service on $415 million of outstanding bonds.
“The upgrade reflects our view that ISFA will continue to request the full chairman’s certificate and that hotel tax receipts will continue to trend upward,” S&P analyst Geoffrey Buswick said Tuesday. “They requested the full amount last year and they have told us they intend to request the full amount this year.” […]
As the agency earlier this year projected another shortfall totaling $28 million, board members voiced concerns over the impact any further use of reserves or additional restructuring would have on the agency’s fiscal health. The agency also adheres to an additional bonds test requirement tied to hotel tax collections complicating refinancings.
* And here’s Greg Hinz on the latest Chicago Fed report…
The monthly review of what top business leaders are saying indicates that the overall activity index dropped from +3 in April to -26 in May. That suggests overall economic activity in the region “was well below trend,” according to the report.
Activity had peaked in the second quarter of last year. With a few blips, it has slowly decreased, and now is at its lowest level since 2020.
The indexes of both manufacturing and nonmanufacturing also both dropped to -21 and -29, respectively, during the month.
* From the Chicago Fed…
Chicago Fed Survey of Economic Conditions (CFSEC)
May 2022The Chicago Fed Survey of Economic Conditions (CFSEC) Activity Index decreased to –26 in April from +3 in March, suggesting that economic growth was well below trend. The CFSEC Manufacturing Activity Index decreased to –21 in April from +9 in March, and the CFSEC Nonmanufacturing Activity Index decreased to –29 in April from –2 in the previous month.
• Respondents’ outlooks for the U.S. economy for the next 12 months deteriorated, and remained pessimistic on balance. Twenty-six percent of respondents expected an increase in economic activity over the next 12 months.
• The pace of current hiring decreased, but respondents’ expectations for the pace of hiring over the next 12 months increased. The hiring index moved into negative territory, but the hiring expectations index remained positive.
• Respondents’ expectations for the pace of capital spending over the next 12 months increased, and the capital spending expectations index turned positive.
• The labor cost pressures index increased, but the nonlabor cost pressures index decreased. Both cost pressures indexes remained positive.
posted by Rich Miller
Thursday, May 12, 22 @ 12:55 pm
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Previous Post: *** UPDATED x3 *** Illinois Jewish Legislative Caucus members to Kari Steele: “Publicly repudiate the hate-filled rants and accusations leveled by your spouse and top campaign surrogate”
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The state’s (governmental) measured fiscal health has been significantly better with Pritzker at the helm.
By “measured fiscal health”, it appears the rating agencies see this state in a far better light compared to previous years, administrations, “decades?”…
The rating are still a racket, ignoring that part isn’t helpful, but recognizing real dollars and changes, outside laws/constitutions it can’t be denied that the fiscal (governmental) outlook is better.
Comment by Oswego Willy Thursday, May 12, 22 @ 1:09 pm
How much longer is the bond debt to be paid off at Solider Field? Will be Bears be playing in Arlington Heights and we will still be footing the bill?
Comment by Cool Papa Bell Thursday, May 12, 22 @ 1:11 pm
Does mean the ILLINOIS SPORTS AUTHORITY can do the bond deal for the Arlington Heights Bears palace.
Comment by Annonin' Thursday, May 12, 22 @ 2:00 pm
Obscure race? for a sub circuit? which is actually a reconfigured sub circuit and confusing everyone with the new map. If Paris thinks it is obscure, he’s not been paying attention to the river of madness that is the sub circuit races. the candidates are always everywhere. it is so not obscure.
Comment by Amalia Thursday, May 12, 22 @ 2:38 pm