The Collinsville City Council this week did a good imitation of George Bailey running the savings and loan in Bedford Falls.
No, the council members didn’t make loans to benefit the townspeople but rather gave out its $2.5 million private activity bond allocation to help the Southwestern Illinois Development Authority and the city of Aurora.
As the city’s finance director pointed out, this doesn’t involve any transfer of money and doesn’t cost the taxpayers. Still, it’s a puzzlement that state law lets Collinsville do the regifting.
The state gave Collinsville the $2.5 million bond allocation based on its population and home rule status, not to SWIDA or Aurora. If Collinsville didn’t want the bonds, you’d think lawmakers would want the state to the reallocating. After all, federal rules limit the dollar amount of private activity bonds any state can issue.
Letting cities pass them on to the entities of their choice seems to defeat the whole point of having state rules for allocating bonds.