ILLINOIS STATE REP. DAVID SWEENEY (R-BARRINGTON HIILS) BILL MAKING LOCAL GOVERNMENT BORROWING TOUGHER & GIVING ILLINOIS 'LEGAL' RESIDENTS AUTHORITY TO APPROVE OR DISAPPROVE REVENUE-MUNI BOND SALES BECOMES LAW

ILLINOIS STATE REP. DAVID SWEENEY (R-BARRINGTON HIILS) BILL MAKING LOCAL GOVERNMENT BORROWING TOUGHER & GIVING ILLINOIS 'LEGAL' RESIDENTS AUTHORITY TO APPROVE OR DISAPPROVE REVENUE-MUNI BOND SALES BECOMES LAW

August 12, 2013, ILLINOIS REVIEW

McSweeney bill making local government borrowing tougher becomes law - Illinois Review

After months of leading bipartisan negotiations, State Representative David McSweeney (R-Barrington Hills) got the General Assembly’s approval in May to modify the alternate revenue bond law, encouraging local taxpayers to exercise their rights to approve or disapprove local borrowings. McSweeney’s HB 983 was signed into law last week by Governor Quinn, allowing taxpayers to more easily organize a referendum to oppose local borrowing proposals. The bill addresses the ease at which alternative revenue bonds are issued. Alternate revenue bonds are backed up by property taxes if project revenues don't materialize.

“Property taxes are skyrocketing while local governments keep borrowing for what they cannot afford and often pass the bill on to the taxpayer,” said McSweeney. “Now we have a more reasonable process for residents to organize a referendum and put it to a vote.”

In most cases, current law requires that 7.5% of registered voters must sign a petition to require a backdoor referendum on the issuance of alternate revenue bonds. McSweeney’s bill applies new requirements to local governments with less than 500,000 in population. It gives the residents 45 days instead of 30 days to file a petition for a backdoor referendum to accept or reject the issuance of alternative bonds. In instances in which governmental units have more than 4,000 registered voters, it permits the lesser of 5% or 5,000 registered voters to file the backdoor referendum petition. The plan also calls for an independent accountant or feasibility analyst to determine if the revenues will support the borrowing.

“I want local government units to think twice before borrowing for bad projects,” added McSweeney. “Local borrowing should be voter-approved because property taxes are at stake.”

State Sen. Pam Althoff (R-McHenry) served as chief sponsor of HB 983 in the Senate and state Sen. Dan Duffy (R-Lake Barrington) and state Rep. Jack Franks (D-Marengo) served as lead co-sponsors in their respective chambers.

The law will take effect January 1, 2014.