CHICAGO — Putting aside partisan bickering over a fiscal 2011 budget, Illinois senators today will unite to vote on an override of Gov. Pat Quinn’s veto of a Metropolitan Pier and Exposition Authority reform bill that allows the agency to restructure its $2 billion of debt.
The General Assembly overwhelmingly approved the sweeping overhaul of the agency that manages Chicago’s McCormick Place Convention Center earlier this month. The move followed pressure from trade and convention managers who were threatening to move to more affordable venues in Las Vegas and Orlando, Fla. MetPier also manages Chicago’s downtown tourist attraction Navy Pier.
SB 28 overhauls the governance and operating structure of the authority in an effort to lower costs for users of the facility who contribute an estimated $8 billion annually to the local economy. The legislation also allows the agency to restructure its debt portfolio, providing near-term fiscal relief as tourism-related revenues are falling short of debt-service needs.
Quinn took his time reviewing the bill, upsetting trade show managers, and then yesterday used his amendatory veto powers to eliminate a doubling of the $2 tax on taxi cab rides from Chicago’s airports. He also inserted language reducing the number of bargaining units that may represent workers, considered a nod to the MPEA’s top unions that would absorb several smaller unions.
Quinn also revised the General Assembly’s provision allowing it to name Jim Reilly as the temporary trustee who will oversee the agency. Reilly is a former executive director of MetPier. Quinn gave himself the power to name the trustee, with Senate consent.
“The General Assembly has taken only half a step toward reforming our state’s convention industry,” the governor said in his amendatory veto message, calling on lawmakers to work with him on a revised bill. “When it comes to reform, half measures do not suffice. The only real reform is comprehensive reform.”
The Senate’s Democratic majority and Republican minority balked at Quinn’s request and said the chamber would begin the override process today. A 60% vote is needed for a successful override.
“Without providing an alternative funding source, the governor’s veto decimates a well-thought-out plan to show off our world-class facilities,” Senate President John Cullerton, D-Chicago, and Minority Leader Christine Radogno, R-Lemont, said in a joint statement.
MetPier has pushed for several years for a debt restructuring. Under the bill, it can sell up to an extra $450 million of debt that will carry the state’s backup pledge to finance a hotel expansion or other capital improvements at existing facilities.
The current limit is $2.1 billion. The agency can refinance its existing $2 billion of convention center bonds and $140 million of older debt, pushing off the current 2042 final maturity as far as 2060.
The bill could result in an 18-year extension of MetPier’s taxing powers that includes a 6% tax on auto rentals in Cook County, a 2.5% tax on Chicago hotel rooms, a 1% tax on downtown restaurants, and a departure tax on airport taxi rides.
Those taxes are expected to respectively generate $25 million, $38 million, $31 million and $8 million in fiscal 2010. The $8 million more expected annually from the airport taxi tax vetoed by Quinn is earmarked for the convention center and the city’s convention and tourism bureau.
The legislation extends a $31.7 million annual state subsidy to the MPEA to 2032 from its current expiration of 2014 at a total cost to the state of $440 million. It provides a general fund subsidy of $10 million in fiscal 2011 and $5 million in each of the next three years to help MetPier service its debt, freeing up some of the its revenue to cover operating shortfalls.
MetPier used $18.8 million in Illinois sales tax revenue for its fiscal 2009 debt payments and estimates it will need $34 million this year. The state’s sales tax revenue can be used as a backup pledge — subject to appropriation — on its bonds.
