Cook County has been using Motor Fuel Tax (MFT) revenues on a pay-as-you-go basis. By bonding off MFT revenues, Cook County can create a pool of capital funds for capital infrastructure investments for suburban roads, in turn creating jobs while potentially being viewed as a positive by rating agencies
Background:
•In 2012, Cook County will receive $96M in MFT revenue from the State.
•In the past, Cook County has used a pay-as-you-go approach for road and bridge infrastructure, resulting in annual maintenance taking priority over long-term improvements.
•A common practice by other municipalities is to bond off dedicated streams of revenue such as MFT.
•The County proposes to use its MFT revenue stream to issue $100M in Series 2012A bonds for capital projects.
•This would allow $25M to go towards public safety from current State MFT revenues; County would also make an annual payment of $6-9M in debt service while creating a pool of capital.
•With the larger amount of available capital, the County will be able to prioritize and accelerate infrastructure projects.
Rationale:
•For the first time in County history, Highways Dept. will use MFT revenue to take a true investment approach to region’s roads, highways and bridges.
•The 2012 expected capital improvement spending budget of $49M is projected to create 1,316 jobs concentrated in the suburban area of Cook County.
•Suburban infrastructure will see a large, strategic overhaul instead of simply yearly maintenance work which does not improve residents’ access or congestion issues.
•Ratings agencies support using additional, stable revenue stream to relieve the burden on property tax.
Budget impact:
•Would allow an additional $25M to be diverted to the public safety fund from current MFT revenues. (not revenues for bonds)
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