ILLINOIS NOW WORST CREDIT RISK

With a second credit downgrade this month, Illinois has overtaken California as the worst credit risk in the United States.

The credit default swap spread for the Illinois general obligation bonds increased to 313 basis points for a five-year contract, which means a bondholder must pay over 3% of the bond’s face value per year to be insured against default. California’s five-year credit default swap is currently at 293.

Illinois has been downgraded 17 times in its history, with almost half of those occurring during the past one-and-a-half years.

FINANCIAL BILLS NOW LAW

Several financial bills were signed into law this week including pay day loan reform, research and development tax credits, and STAR bonds.

House Bill 537 (P.A. 96-0936) will reform the Payday Loan Act and Consumer Installment Loan Act to protect consumers from excessive fees and predatory lenders who take advantage of those who utilize these short-term loan programs.

Senate Bill 3655 (P.A. 96-0937) extends a tax credit meant to encourage research and development, which should help the economy by giving businesses more incentive to spend money on research in Illinois.

Senate Bill 2093 (P.A. 96-0939) creates the sales tax and revenue (STAR) bonds that will be used to develop the $378 million Millennium Development in Marion. The developer has estimated that the project would create 6,000 jobs during construction and 5,685 full-time jobs when completed.

ROAD CONSTRUCTION UPDATES

The Illinois Department of Transportation has announced that weather permitting, work will begin on June 28 to repair depressions in the pavement at four specific locations on US Route 51, located from four miles south of Clinton to north of Elm Street in Wapella. There are three locations northbound and one southbound. This work is expected to take one to two weeks.

A section of storm sewer will be repaired on US 150 eastbound, approximately one mile west of Danville. This work is estimated to last one week. During construction, traffic will be reduced to one lane in the all work areas.

The overall project is scheduled to be completed by the end of July, weather permitting.

Motorists are advised to slow down and drive carefully through all work zones.

A reminder—as of January 1, it is illegal in Illinois for drivers to talk on their cell phones while driving through a highway construction zone or school zone. The new law also prohibits drivers from writing, sending or reading text messages, instant messages and e-mail, as well as surfing the Web while driving.