14th District gets $248 mil boost in ability to borrow

Local governments received the power to borrow a whole lot more money on Friday thanks to another portion of the federal stimulus package kicking in. However, the details about exactly what projects the borrowed money can fund are yet to come.

The U.S. Treasury Department announced the release of $25 billion in bonding authority Friday. Illinois communities are one of the larger recipients of that total, receiving more than $1.6 billion in bonding authority. The 14th Congressional District will receive about $248 million of Illinois' total, according to Congressman Bill Foster's staff.

The ability to borrow comes in the form of two new kinds of bonds.

The bulk of the new borrowing ability in the 14th Congressional District will be in "Recovery Zone Facility Bonds." Those tax-exempt bonds can be used by local private businesses to finance primarily depreciable capital asset purchases such as delivery trucks, computers or other products that lose value over time. The idea is to give local businesses the ability to finance investments in their companies that currently can't be found in the current lending environment.

The second form of new borrowing ability are "Recovery Zone Economic Development Bonds." These bonds would be cheaper for local governments to issue than most other methods of borrowing money since the federal government will pay 45 percent of the interest costs. Foster Spokeswoman Shannon O'Brien said these are bonds local governments can use to finance projects just as job training programs, but also possibly for roads and bridges and stalled redevelopment projects (such as is the case in St. Charles' First Street Project). O'Brien said details about what specific local projects may qualify will be released as the Treasury Department provides guidance in the days to come. Until then, it will be unclear exactly how the tools will be utilized and what benefit they may bring to the local economy. It's also unclear how the increased bonding authority will impact the ability of local governments to borrow money without direct permission from taxpayers.

"This will help communities jump-start our economy recovery at the local level, as they now have the ability to finance vital economic and infrastructure development projects," Foster said in a written statement. "This is especially critical at a time when the budgets of the state of Illinois and municipalities throughout are facing unprecedented fiscal challenges."

Where money goes

How the $248 million of borrowing authority will be divided in the 14th Congressional District:

• DuPage County - $115 million

• Kane County - $42 million

• City of Aurora - $22.9 million

• DeKalb County - $14.9 million

• City of Elgin - $14.2 million

• Whiteside County - $13.7 million

• Kendall County - $13.3 million

• Lee County - $6.2 million

• Bureau County - $5.8 million