Ready, set, shovel

By Bethany Jaeger
Shovels could break ground within a few weeks as the state signs contracts for new road construction jobs. Gov. Pat Quinn signed into law a capital spending plan that his office said would create or retain as many as 439,000 jobs throughout the next six years.

“By advancing this now, we can still have an impact during this construction season. We should not let a minute go to waste,” Senate Minority Leader Christine Radogno said in a statement. At a bill-signing ceremony in Chicago Monday afternoon, she added: “These last several years, successes in Illinois government have been few and far between. But what we have here today is a major success. It’s a beautiful thing.”


Trade group members are on the edge of their seats waiting for projects to start, according to Beth Tatro, director of external programs the Illinois Road and Transportation Builders Association based in Itasca. “We’re at the point right now where our companies are starving,” she said. “This has been an early Christmas present.”

But time is tight for projects to begin this month. Engineers have to design the work, the department has to seek bids for contracts to do the work and then they’ll start building. “If the project is already on the shelf, as soon as we get the money, we can build them,” Tatro said. If some of the projects were designed three years ago, engineers might have to review the plans and adjust the costs.

According to the Illinois Department of Transportation, about $448 million in highway projects already have been let. And an additional $310 million would be obligated for highway projects this fiscal year. The distribution of money for downstate mass transit projects, however, has not yet been decided, according to the department.

In addition to improving transportation-related infrastructure such as roads, bridges and mass transit, the $31 billion capital plan will finance projects that build new schools, make schools and homes more energy efficient and support vocational and early childhood facilities. Environmental and economic development projects also are slated to help clean up contaminated sites, deploy broadband Internet technologies, support jobs in economically depressed areas and help build affordable housing units for veterans and people with disabilities. Another goal is to expand high-speed rail between Chicago and St. Louis.

The capital plan, however, does not mean the state has an operating budget. The lack of a state operating budget for the fiscal year that started July 1 has led to ongoing layoffs and service reductions for community service agencies. Without a spending plan in place this week, some state employees could not receive their full paychecks on time.

The governor indicated last Friday that he would postpone his campaign to enact a temporary income tax hike until this fall, which would allow incumbent legislators to know whether they have serious primary election challengers in 2010. Quinn also indicated last week that he would, despite early opposition, consider a five-month budget to at least keep the state operating until the legislature returns for its annual fall session in November.

The legislature will return to the Capitol Tuesday afternoon. Legislative leaders are scheduled to meet with the governor Tuesday morning.

“The General Assembly must pass a balanced budget that makes essential cuts and cost efficiencies, while also providing for our most vulnerable and needy residents,” Quinn said in a statement Monday.

The governor previously said he would not sign the capital plan into law without an operating budget on his desk because without it, bond rating agencies were likely to downgrade the state’s bond status, which would make it more expensive for the state to borrow.

Financing the statewide construction program
The flow of revenue to pay for projects outlined in the program, Illinois Jobs Now!, comes from a variety of fee increases and gaming expansions. Driving-related fees for vehicle titles, license plates and drivers’ licenses combine with expanded sales taxes on candy, some tea and coffee drinks, hygiene products and wine and beer.

The revenue bill is House Bill 255.

The spending bill is HB 312.

The bonding bill is HB 2400.

The state would garner 80 percent of the revenue generated by new sales taxes on candy and grooming products, which will include soaps, shampoo, toothpaste, mouthwash, deodorants and suntan lotions and sunscreens that don’t require prescriptions.

A more controversial and, potentially, legally challenging revenue source would be the legalization of video poker in places that serve alcohol. Numerous bars, clubs and riverboats throughout the state already have video poker machines, but hundreds illegally pay winners under-the-table. The new state law would legalize the payouts and then tax the profits, generating up to $300 million a year once fully implemented, according to the governor’s office.

Supporters, including coin machine operators and beverage and hospitality associations, said it’s a voluntary tax that averts the need to raise other general state taxes to pay for critical construction projects. Opponents have said video poker increases the likelihood of gambling addictions and social problems that go along with them. A portion of the revenue will go to gambling addiction services.

Each restaurant, bar, veterans’ hall, truck stop would be stripped of existing machines and would have to install up to five standardized machines that would be connected to and regulated by state gaming authorities. But before they could install the machines, the county or municipality would first have to submit the question of whether to allow legalized video poker to voters. A majority of voters would have to say OK.

The new law also allows the state to partner with a private management firm to run the Illinois Lottery, although the state would still own and maintain control of the asset. And Illinois could start a pilot project for up to four years to allow people 18 and older to buy Lotto and Mega Million lottery tickets online, mainly in an effort to target people who don’t often play the lottery. But the pilot program would first need federal approval from the U.S. Department of Justice. The University of Illinois will conduct a study about the effect of families buying lottery tickets in a report due to the state in January 2011.

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Looks good for capital, not so much for budget

By Bethany Jaeger
It’s taken a decade, but Gov. Pat Quinn said that come Monday, the state would have a major infrastructure program in place to help spur the economy and send people back to work.

Downstate legislators who met with the governor Thursday afternoon in the Executive Mansion expressed bittersweet sentiments: The governor would sign the long-awaited public works program to send laborers and others back to work, but thousands of other public employees and the people they serve are on the brink of losing their jobs and their access to critical aid. That's because the governor and the legislature still haven’t enacted a balanced operating budget, despite a new fiscal year that started July 1.

Rep. Brandon Phelps, a Harrisburg Democrat, for instance, is in a downstate area in need of economic development. However, he also has a prison in his district that could lose employees under Quinn's plan to cut spending by an additional $1 billion. Enacting the capital bill wouldn’t prevent layoffs of 1,000 Department of Correction employees, he said, adding that such significant layoffs might not save as much money as needed to cover the increased overtime costs.

The General Assembly is scheduled to return to the capital city Tuesday, about the same time the comptroller’s office needs to process checks so the first round of state employees would get paid on time. The governor, facing doubt about whether he can persuade more legislators to support an income tax increase to fill what he says is a $9.2 billion budget deficit, said he would consider Plan B, even if that includes a temporary spending plan.

“I’m open to anything that gets us moving in a positive direction, whatever it takes,” Quinn said. That could include a five-month budget so he could continue to lobby for an income tax increase.

But, asked Rep. Bill Black, a Danville Republican, at what level would the five-month budget be based? Would it be based on the $26 billion plan already approved by the legislature but partially vetoed by the governor? Or would it be the $28 billion originally proposed by Quinn?

In May, the legislature approved along partisan lines a budget that reduced funding for human services by half of what the governor proposed. Quinn then vetoed much of that spending plan and said that regardless of whether an income tax increase passes, he would still have to make about $1 billion in cuts. He recently announced a general plan that lacked specifics, although legislators said today they hope by Tuesday to receive more details.

Rep. Roger Eddy, a Hutsonville Republican, said a five-month budget is risky because it would assume that the legislature would approve an income tax increase before the end of the year. “Then you’ve spent for five months based on revenue you may or may not get. I think it’s very risky.” He added, however, that it might be the most politically palatable option for many legislators because by this fall, incumbents would know whether they faced a serious challenger in the next election.

Either way, Eddy said, Quinn faces a “triple negative” in trying to persuade lawmakers to vote for a tax hike because the new revenue would not prevent further budget cuts. “It would be nice to vote for a tax increase — if you have to — and go home and talk about all the new wonderful programs you’re going to start. This combination is: Vote for revenue, borrow $2.2 billion, make $1 billion in cuts above the cuts that have already been made. That’s a pretty tough sell.”

Rep. Mike Bost, a Murphysboro Republican, said he appreciates that Quinn is showing some direction in where he might cut, but he’s concerned that the governor is making broad statements to stir up local residents so they pressure their legislators to approve an income tax increase. The GOP has remained mostly united on opposing a tax hike without action on other cuts and what they see as reforms because they fear giving billions of new dollars to a group of leaders which he said “can’t control themselves.”

Legislators said they could be in session Tuesday through Thursday, although several expressed doubt about how they would solve the budget impasse by then. “I think it’s going to be a challenge for all the pieces to come together,” said Rep. Bob Flider, a Mount Zion Democrat.

CAPITAL

After the legislature in May overwhelmingly approved the first major infrastructure program in a decade, Quinn said he wouldn’t sign the package into law until he received a balanced operating budget on his desk. With little consensus on how to balance a severely out-of-whack budget, the capital program remained in limbo and jeopardized federal matching funds.

The governor said today he would sign the capital program into law on Monday. He previously said on May 31 that the lack of an operating budget would hurt the state’s bond rating, making it more expensive to borrow money.

Thursday afternoon, he said the state still needed both. “I think we need to have a good budget that is a balanced budget that’s fair and decent. Together with a good jobs program, we can get Illinois focused on economic recovery and budget stabilization.”

Shovels might not move dirt for weeks, maybe months. We’ll have more on that and other reaction soon.

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Everything in limbo

By Bethany Jaeger, with Jamey Dunn and Hilary Russell contributing
Illinois’ human service providers, as well as other state contractors, remain in limbo as to whether they’ll receive state funding after July 1. The General Assembly finished its special legislative session this afternoon without sending a spending plan to the governor. Lawmakers aren’t scheduled to return until Monday afternoon (the Senate won’t be back until Tuesday), which some providers said would be too late. Providers, many of whom rallied at the Capitol yesterday, anticipate having to close their doors or lay off employees without a state operating budget in place by then.



“What’s going on right now is cruel, it’s cynical and it doesn’t need to be happening. And it should have been addressed this week,” Senate Minority Leader Christine Radogno said after the legislature adjourned. She added: “There is a lack of clarity, a lack of leadership, in terms of what is going on. And in the meantime, people are dangling in the wind thinking that their lives are going to be inextricably altered.”

She proposed enacting a temporary budget to keep state services going, uninterrupted, and to give service providers more predictability.

Gov. Pat Quinn continues to publicly reject the idea of a temporary budget and said lawmakers still have time to enact a full-year balanced budget within six days. But he said balancing the budget, which he projects will carry a $9.2 billion deficit, will require a two-year income tax increase to generate $4.2 billion. (Comptroller Dan Hynes calculated the deficit at $7 billion.)

Legislative leaders of both political parties have cast doubt on the governor’s ability to gain enough votes in each chamber to approve a tax increase by July 1, although House Minority Leader Tom Cross said a few of his members are leaning toward a tax increase if they see action on other efficiencies and long-term spending reforms first.

Senate Democrats maintain that they approved a version of a permanent income tax increase in House Bill 174, which never got called for a vote in the House. According to Sen. James Meeks, the caucus doesn’t want to give up on the idea of offering property tax relief and increased education funding. Meeks said a temporary increase would result in a permanent increase in two years. “Temporary should scream out to everybody saying, ‘In two years, they’ll be back.’”

There could be more immediate support for a short-term borrowing scheme. A plan backed by Quinn would issue pension obligation notes rather than bonds, which typically are repaid over longer periods of time with higher interest costs. The House advanced the plan, Senate Bill 415, today. It would allow the state to make its full contribution into the public employee pension systems and free up $2.2 billion to help plug the deficit.

“If we get $2 billion to help close the deficit, that’s a good thing,” Quinn said after finishing a series of meetings with all four legislative caucuses. “We’re making progress, but we still have $7 billion to go.”

The governor and all four caucuses appear to agree one goal: to reduce spending by another $1 billion. But they might disagree on how to do that.

Quinn said his administration could save about $125 million by mandating 12 unpaid days off, or furlough days, for state employees, including unionized workers. Layoffs also could be considered, he said, although he added that he wouldn’t pursue layoffs until after he and the General Assembly settled on whether the state would generate new revenues first. “Under our contract, we can lay off employees if we don’t have the money to pay them,” he said.

Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, said union leaders already met with the administration last week and determined that furlough days and layoffs wouldn’t save significant amounts of money. Henry Bayer, Council 31 executive director, said last week that even if every state employee worked the entire year unpaid, the state would only save about $3 billion. Lindall added this afternoon, “Any number of furlough days would be an insignificant savings to the state but a very real reduction in services.”

Cross said his caucus agrees with the need to look for $1 billion in cuts and recommends moratoriums on programs, furlough days and salary freezes, as well as reduced travel budgets.

Capital and recall
Two other items on hold include the $29 billion capital construction program and a provision that would allow voters to decide whether they wanted to change the state Constitution so they could recall the sitting governor.

Quinn said he will not sign the construction program without an operating budget in place. Democratic Sens. Martin Sandoval of Chicago and John Sullivan of Rushville said the capital plan and the operating budget have nothing to do with one another. In a Statehouse news conference, they joined organized labor groups to say Quinn has fallen through on his promise to immediately put people to work. "People are falling off the edge, losing their homes, having a very difficult time making ends meet, and he’s decided to hold the jobs bill as a political football until he gets his tax hike,” Sandoval said, citing the state’s 10.1 percent unemployment rate.

On the other hand, the Senate Democrats have held one of Quinn’s initiatives, House Joint Resolution Constitutional Amendment 31: a recall provision. Senate President John Cullerton said yesterday he would not call the provision for a vote until Quinn signed an ethics package that would limit the amount individuals, businesses and political organizations could donate to candidates. However, the Senate hasn’t even sent the measure, HB 7, to the governor’s desk.

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Little hope for compromise by July 1

By Bethany Jaeger
The General Assembly will return to the Capitol in a special legislative session Tuesday afternoon, seven days before a new fiscal year starts without a state budget in place. However, legislative leaders appear unlikely to agree on a way to avoid a budget plan that would cut at least $7 billion from state-funded services after July 1.

According to Senate President John Cullerton, legislators will return to Springfield to address technical problems with the $29 billion capital construction program approved last month, as well as some other bills that authorized limited spending. But Gov. Pat Quinn indicated he still does not intend to sign the infrastructure program into law without a balanced operating budget in place.


While Quinn emerged from a meeting with legislative leaders in Chicago this afternoon and said he hopes to achieve both next week with bipartisan support, none of the leaders mentioned income tax increases as part of next week's agenda. (Thanks to Capitol Fax Blog for providing video.)

“Unfortunately, it appears at this point in time that the Republicans are not ready to vote for any revenue increases," Cullerton said. "And that’s unfortunate.”

Democrats maintain that the state cannot cut its way out of what Quinn estimates to be a $9.2 billion deficit and that an income tax increase is the only way to prevent draconian cuts to human services to the most vulnerable citizens. Republicans repeat their call for government reforms first, which Senate Minority Leader Christine Radogno said could reveal savings that would offset some of the need to raise income taxes by as much as proposed by Democrats. “The Democrat proposal is to raise taxes now and we’ll figure out reforms maybe later, and we don’t accept that that’s a realistic way to approach this,” Radogno said.

She also described the state's budget situation as "manufactured." “I believe it is a manufactured crisis to the extent that we do not need to have those draconian cuts on July 1," she said, adding that the state could fund services for the first half of the fiscal year while legislators continued to negotiate. Quinn said it's irresponsible to begin a year by spending money that would run out halfway through.

Cullerton said before the meeting that a "reasonable solution" would be to enact the Senate-approved version of an income tax increase that also would relieve property taxes and expand the sales tax to some services. He said House Bill 174 would need Democratic and Republican votes to pass in the House. House Speaker Michael Madigan said that not enough members of his caucus, which has 70 members, are willing to vote for an income tax increase without GOP support. “There were a certain number of House Democrats who said quite flatly, ‘I’m not going to go on a roll call when it’s Democrats-only,’” Madigan said.

Any revenue-generating proposal would need 71 votes to pass now that the legislative session has extended beyond May 31, making it harder for enough legislators to get beyond politics and agree on a budget plan within seven days of the new fiscal year.

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May 31 deadline certainly leaves uncertainty

By Bethany Jaeger, with Hilary Russell and Jamey Dunn contributing
The General Assembly approved a bare bones budget that funds human services at 50 percent of Gov. Pat Quinn’s proposed levels, but the governor indicated Sunday night that he would not sign the minimal budget into law.

Not only do state agencies and community service providers not know if they’ll have enough to operate for 12 months of the new fiscal year, but the entire state government won’t know whether it’ll have a balanced operating budget before the fiscal year starts July 1.



Quinn would not say he would veto the bare bones spending plan, but he said he wouldn’t sign it. “A partially funded budget is not a budget,” he said about five hours before the midnight deadline to adjourn the spring session. “You’ve got to make sure you have a whole budget for 12 months of the fiscal year.”

He sent members of the General Assembly home after 1a.m., failing to meet the midnight deadline. But Quinn intends to meet with Democratic and Republican leaders in his Statehouse office Monday.

One more uncertainty from the lack of an agreed budget is when construction will begin for roads, bridges, schools and other infrastructure projects. Although the General Assembly approved a $26 billion construction program 10 days ago, with a second installment approved early Monday morning, Quinn said he wouldn’t sign it until lawmakers sent him a balanced budget.

He said bond-rating agencies and bond buyers wouldn’t buy bonds from a seller (the state) “as long as that seller has a gaping hole in its operating budget of billions of dollars. It’s just common sense.”

To get a balanced operating budget, Quinn said he still supports an income tax increase despite its trouble gaining enough support in the legislature. He deemed the tax as the fairest way to generate revenue because it’s based on ability to pay.

“We have to have a sufficient budget that’s balanced, and that is the only way to go. Our work is not done until that happens, until we have revenues matching expenditures.”

But Quinn had changed his message several times as various budget options gained support throughout the past week. He initially sought a permanent income tax increase of 1.5 percentage points, but he changed to supporting a temporary income tax when it was clear the permanent version wouldn’t acquire enough votes. He changed his stance again Saturday night when the Senate approved an income tax increase accompanied by a sales tax expansion and property tax relief, as well as education funding reforms.

By Sunday, Quinn would not exclusively support either plan. “I’m for any bill that can balance the budget. … If we also can reform an unfair property tax system, I think that’s good also.”

Quinn did urge House Speaker Michael Madigan to find the votes for HB 174, which has been proposed by Chicago Democrat Sen. James Meeks in various forms for the past seven years as a way to address funding disparities between public schools. “I’m counting on Mike Madigan to deliver votes. He’s very good at it. He does the best on the deadline.”

Madigan didn’t deliver the votes. His Democratic Caucus met behind closed doors to take an informal vote on the bill. Rep. David Miller, the sponsor, said it would have only gained 35 votes, far short of the 60 needed for approval.

So the House instead took a vote on Quinn’s temporary income tax. Again, the votes didn’t come. Only 45 members, all Democrats, supported it.

House Republicans remained united against an income tax increase of any kind. Minority Leader Tom Cross said his members were voting against the status quo. “We’re not voting no for the sake of voting no. We want change. We want Medicaid reform and pension reform and some restraint and some discipline.”

Earlier in the day, he said: “To just raise money and hand it over to the same group of people, we’re not going to support that.”

Bare bones budget
When House Democrats couldn’t gain enough votes to either raise the income tax or make massive budget cuts, they resorted to approving reduced levels of spending for state agencies and programs. But it would leave it up to the governor’s administration to decide how to spread the money as far as it would go and decide where to cut.

“It’s better than not having a budget,” said Rep. Jack Franks, a Woodstock Democrat who voted against the temporary income tax.

The plan would generate an additional $1 billion through sweeping unused money sitting in dedicated funds and refinancing state debt to take advantage of historically low interest rates. (SB 1197 is the budget bill; SB 1433 is the fund sweeps bill; SB 1609 is the debt refinancing bill.)

Rep. Dave Winters, a Shirland Republican, said his “no” vote was symbolic. The bare bones budget still would fund all state employee contracts without requiring unpaid days off or restricted travel budgets.

The General Assembly did approve a measure, SB 2090, which would require legislators to take four unpaid days off and would cancel their cost-of-living raises for next fiscal year.

In the Senate, GOP Sen. Matt Murphy of Palatine dubbed the bare bones budget as “the final piece of the failure-to-lead budget.” His fellow Republicans said it was irresponsible to refinance the debt but not pay the first two years of principle on the loan; however, Minority Leader Christine Radogno actually supported the “temporary holiday” from the stringent requirements the General Assembly placed on itself in the 1990s. She said because Republicans oppose tax increases, the refinancing plan would allow some flexibility in the current revenue shortfall and economic recession.

But, she added, “The result right now looks a little like the same old thing, and the fact is the Democrats failed to put together a budget that can take us through the year, despite the fact they have significant majority.”

Sen. Donne Trotter, budget negotiator for the Democrats in his chamber, described the bare bones budget as “the worst bill that we could have passed.” But, he added, it was necessary in the 11th hour — literally with 45 minutes before the midnight deadline — to prevent the government from shutting down operations when the new fiscal year starts July 1.

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Haven't crossed the finish line, yet

By Bethany Jaeger

Gov. Pat Quinn confirmed that he could wait to sign a major capital construction package that recently passed both chambers until the General Assembly sends him an operating budget and ethics reforms.

"I don't plan to sign anything until we finish our work," Quinn said at a Statehouse news conference this morning, later adding, "I don't want to stop until we reach the finish line."



The major infrastructure program, which won House approval last night, has not yet been sent to the governor's desk. And it still has $1.5 billion left to earmark for projects.

The operating budget has not yet been negotiated. However, the House has approved basic portions of the budget that must be funded regardless of whether lawmakers approve a state income tax increase. The spending would include money to keep the lights on, as well as funding for education and Medicaid, which have to meet federal requirements to capture economic stimulus funds. The Senate is expected to take up those basic portions of the budget soon, but some lawmakers fear that such a temporary spending plan would take pressure off to approve a full-year budget by the end of the month.

Quinn said, "I don't think that would be the best way to go."

Meanwhile, the effort to advance government reforms recommended by the governor's Illinois Reform Commission appear stalled. While committees were scheduled for this afternoon to hear testimony from commission Chairman Patrick Collins, Senate Republicans say that some of the legislation never got assigned to be heard in committee.

According to GOP Spokeswoman Patty Schuh, Senate Minority Leader Christine Radogno is now sponsoring a measure to establish campaign contribution limits that mirror the commission's recommendations ($2,400 for individuals and $5,000 for corporations). Schuh said it was not assigned to committee for debate this afternoon. Senate Bill 350 also includes a provision that would set a $10,000 limit for donations from a candidate's political party organization.

"Collins is in the building," Schuh said. He and other commissioners "came here today at the request of the Senate president to go over their report."

Rikeesha Phelon, spokeswoman for Senate President John Cullerton, said committees are scheduled to hear at least a pair of House Speaker Michael Madigan's reform measures that were approved yesterday.

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Capital plan passes both chambers

By Jamey Dunn and Hilary Russell
Photograph by Hilary Russell


Right: The Illinois House approved a revenue package by a vote of 86-30-1, with opposition mostly objecting to new gaming sources.

The House tonight approved a major capital construction program, wrapping up one of the three major issues that lawmakers seek to tackle before session adjourns at the end of the month. The next step for the bill is approval from Gov. Pat Quinn, but whether that will happen quickly and when projects would begin is still up in the air.

The $26 billion plan will be funded by tax, fee and fine increases. The state will contribute about $11.5 billion, which will leverage federal and local funds. An expansion of lottery ticket sales and legalizing video gaming in bars, restaurants and truck stops will generate revenue for the state’s contribution.

However, House Minority Leader Tom Cross said he does not know exactly when construction would start. “Maybe summer, early fall. But I think even if you don’t have specific shovels in the ground, you’ve got engineers and architects putting plans together,” he said after the program won House approval. “We’ve got some good movement in that mini-capital plan, so there’s some activity out there. Would we all love to see it all tomorrow? Yeah, but it’s not going to happen.”

Some of the proposed revenue sources would not immediately bring in money. Video gaming would require implementing a complicated oversight process. Many establishments already have video poker machines, and some illegally pay out to winners. If the legislation becomes law, the payouts would have to be documented and regulated. Existing machines would have to be replaced or retrofitted to meet monitoring standards spelled out in the legislation. Proponents claim that the new regulation could weed out organized crime that has been perceived to be associated with illegal video poker.

Leasing the Illinois Lottery to a private entity is contingent on approval from the U.S. Department of Justice, and the state has no control over how soon, if ever, that will come. Selling lottery tickets online is an unprecedented move. If approved, getting the operation up and running could take awhile.

Legalizing video gaming and the proposed changes to the lottery kept the plan from getting unanimous support. Cross said it was a difficult vote for some members of the GOP caucus. “It’s going to be difficult, and it’s going to have a little pain in it. And, there are people that didn’t like it,” he said.

Some Democrats didn’t like it, either. The majority of “no” votes among Democrats came from suburban Chicago lawmakers. Many echoed Quinn’s statement yesterday that the state’s operating budget, which funds government operations, health care, education and social services, should have taken priority over a construction plan.

Rep. John Fritchey, a Chicago Democrat and the only lawmaker to vote “present” on the revenue sources, said he was hesitant to approve what he considered a gaming expansion and the privatization of the lottery. He added that while the legislature found money to build new schools, lawmakers haven’t yet figured out how to pay for the teachers who would work in those schools.

Legislators also expressed concern that Quinn might not sign the capital plan into law until the General Assembly sends an operating budget to his desk. He has 60 days to act before the capital program automatically becomes law. Cross said that Quinn had told him he would sign the bill, but he worries that Quinn could delay the signing.

Regardless, lawmakers expressed relief that both chambers finally approved a long-awaited infrastructure program after consecutive years of false starts.

Rep. Lou Lang, a Skokie Democrat, said: “The state of Illinois has needed an infrastructure bill for a very long time. We need to put people to work, we need to fix roads, bridges and schools and water mains, and I believe this is an economic stimulus package done by the state of Illinois. And it was critical that it passed.”

Now the legislature can turn its focus to the operating budget and government reforms. While some procurement and employee ethics reforms advanced to the Senate today, the Senate also could begin debate about the governor’s Illinois Reform Commission’s proposals tomorrow.

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Capital plan heads to the House

By Bethany Jaeger, Hilary Russell and Jamey Dunn
Senate President John Cullerton said he delivered on an inaugural promise to approve a major infrastructure program this spring. The $26 billion capital program, which would rely on tax and fee increases and new gaming revenues, won Senate approval and now heads to the House in what many legislators hope will continue to be a bipartisan effort.



If approved by the House, the new plan would build onto a $3 billion “mini-capital” program approved earlier this year. Combining state, local and federal funding in both the mini- and the full-capital plans would mean a $29 billion investment into roads, bridges, mass transit, schools, universities and community colleges, parks, libraries, museums, water systems and technology projects.

But not all the spending was earmarked in today’s capital plan. Legislators still would have to negotiate how and where the last $1.5 billion would be spent. The General Assembly also still has to negotiate how to balance an operating budget that is projected to be $11.6 billion out of whack over two fiscal years. But that is separate from the capital program.

Cullerton and Senate Minority Leader Christine Radogno stood together in a news conference after the chamber approved the construction. While several Republicans and a couple of Democrats opposed the revenue ideas (here’s the vote of 47-12), the spending plan received unanimous support.

“If you look at the totals of the votes, perhaps we could have done this with just Democrats,” Cullerton said, “but then we’d have acrimony, and it wouldn’t bode well for the future, and it wouldn’t bode well for the [operating] budget.”

Radogno said the four caucuses worked together to ensure a fair distribution of the money throughout all regions of the state. “That is not always easy to do. Then you cross-cut that with partisan politics. It is not easy to come up with something fair and balanced, and I truly believe that this is a fair and balanced product.”

Radogno added that while the revenue package is “not ideal,” it is “real revenue,” as opposed to borrowing without having money to repay the debt. “This proposal doesn’t do that. It pays for what we’re going to be getting.”

Sen. Martin Sandoval, a Chicago Democrat who has urged for more money for Chicago-area transportation systems, claimed victory because the capital program would include a more equitable split of money between northeastern Illinois and downstate. While some of the money would be distributed through a traditional formula for road projects that tends to give more money to downstate road projects, about $3.5 billion would go to new road and transit projects through discretionary spending. Cullerton said, “When it’s all said and done on roads, it’s probably 50-50 throughout the entire state.”

Sen. James Meeks, a Chicago Democrat, did not support the revenue portion. Cullerton later said that he met with Meeks several times to address his concerns about minority representation in unions and construction jobs. Cullerton said he looks to fund a vocational training program when the leaders negotiate the final $1.5 billion of the capital program.

It’s been 10 years since Illinois had such a major infrastructure package, and the last six years of gridlock between former Gov. Rod Blagojevich and the legislature took a toll. Numerous legislators commented about reviving a bipartisan spirit after a span of dysfunction, and “what a difference a year makes.” Cullerton ended by saying: “This is just back to normal. I’ve been here 30 years — 24 of them were normal.”

Here’s a breakdown of the revenue-makers:

Gaming

• Two separate types of gaming would generate about $375 million. That includes legalizing video gaming machines in places where alcohol is served. The state would tax and regulate the machines and garner revenue.
• A second program would allow the state to hire a private company to manage the Illinois Lottery for up to 10 years. It also would sell lottery tickets online, with the goal of marketing to people who don’t currently play the Lottery. It would make Illinois the first state in the nation to allow “Internet lottery,” which would be contingent on approval from the U.S. Justice Department.
• But creating new methods to access gambling is similar to playing with fire, according to Anita Bedell, executive director of Illinois Church Action and Alcohol Addiction Problems, who likened the programs to granting easy access to underage players.

Taxes

• It would reclassify soft drinks, candy, beauty and some hygiene products for sales tax purposes and generate up to $150 million.
• The sales tax on alcohol also would increase for wine (from 73 cents to $1.39 per gallon), spirits (from $4.50 to $8.55 per gallon) and beer (from 18.5 cents to 23.1 cents per gallon). It would generate about $113 million a year. Opponents said taxing alcoholic beverages is not a constant source of revenue for the state.

Driving-related fees
Increased fees would bring in more than $330 million a year. The increases would include:

• Title certificate fees from $65 to $95.
• Registration fees from $15 to $25.
• Driver’s license fees from $10 to $30.
• Fines for semitrailers that are over the approved weight.

FYI:
Revenue bill is HB 255.
Spending bill is HB 312.
Bonding bill is HB 2400.

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Inch by inch

By Jamey Dunn and Bethany Jaeger
In a pivotal step toward finalizing the capital plan, Gov. Pat Quinn met with Democrat and Republican leaders of both chambers in Quinn’s Statehouse office this afternoon.


Senate President John Cullerton, Senate Minority Leader Christine Radogno, House Speaker Michael Madigan and House Minority Leader Tom Cross met for several hours. But none of them commented to the media after the meeting.

Rikeesha Phelon, spokeswoman for Cullerton, said it was the first substantial meeting between the four leaders and the governor since he took office. She said that an agreement has been reached between Democrats and Republicans in both chambers and that Cullerton left the meeting confident of a vote on the capital plan coming tomorrow.

Measures to approve new revenue sources and to grant bonding authority to the state are expected to move first. According to Radogno’s spokeswoman, Patty Schuh, the revenue sources will all be included in a single bill. Some Republicans wanted two separate bills so they could avoid taking a difficult vote on expanding gaming.

The bulk of spending will be in a bill that could come up for a vote tomorrow, and some individual projects that still need to be negotiated will be in a later bill. Schuh said that the leaders and Quinn still want to avoid giving out large chunks of money without specifically designating them to projects.

Meanwhile, the House advanced basic parts of the operating budget that would authorize standard spending regardless of whether legislators approved an income tax increase, which Quinn continues to urge as needed. The spending would include money to keep the lights on, as well as funding for education and Medicaid, two areas that have to meet federal requirements to capture economic stimulus funds. Funding contracts for state employee unions also is required.

At least two major questions remain: Will the state fund all $4 billion of its scheduled contribution into the public employee pension systems (a typical year’s contribution would be about $1.2 billion)? And will the legislature resort to increasing the state income tax, outlining budget cuts, or both?

“Without a tax increase, are you going to fund the pensions at normal costs, which means unfunding about $3 billion?” said Rep. Frank Mautino, an assistant majority leader. “And then how do you decide which of the remaining items you’re going to pay for?”

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Revenue first, spending second for capital plan

By Bethany Jaeger
Senate Democrats and Republicans are inching closer to an agreement on at least half of the capital plan: the revenue side. Measures to raise about $1 billion of the state's share through various tax and fee increases, as well as two gaming-related revenue ideas, could advance early this week. The spending side of the roughly $26 billion construction plan, however, will take longer to negotiate.


Senate Democrats met behind closed doors Sunday evening, setting up what's scheduled to be the last two weeks of the spring legislative session. The goal remains to adjourn two days early on May 29, said Rikeesha Phelon, spokeswoman for Senate President John Cullerton. Expect the Senate to act on capital construction package and ethics reforms this week. Negotiations on an operating budget, so far, have been separate.

The construction program for roads, bridges, schools and infrastructure projects would rely on a series of revenue sources, the largest being about $375 million from the legalization of video poker machines in bars, truck stops and other establishments where alcohol is served, according to a Democratic source. The second largest source, about $331 million, would come from increased driving-related fees.

The plan also would allow a private company to manage the Illinois Lottery and allow tickets to be sold online, bringing in about $150 million. Additional revenue sources would include $150 million from expanded taxes on candy, non-carbonated drinks and some health and beauty aid products, as well as $114 million from expanded taxes on wine (13 cents a bottle), liquor (80 cents a bottle) and beer (about 2 cents a six pack). An increase on the state's motor fuel tax is no longer on the table.

Senate Minority Leader Christine Radogno said her caucus wants the two gaming-related measures in one bill and the other revenue sources in another bill to separate the votes. “It’s primarily to address the fact that there are people in all four caucuses that would never under any circumstances vote for gaming," she said. Cullerton is considering the request, Phelon said.

We'll have much more this week.

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End-of-session preview 2009

The legislature is preparing for a two-week push to accomplish three major issues — the state operating budget, a major construction program and a government reform initiative — for a potential May 29 adjournment. That’s the goal, according to Senate President John Cullerton.

All four legislative leaders met behind closed doors this afternoon to talk about a major capital construction program, which is expected to roll out next week. Earlier in the day, House Republicans held an unprecedented open-door meeting (caucuses usually meet behind closed doors and don’t invite the media) to talk about government reforms with Patrick Collins, chairman of the Reform Commission.



The Senate will come back Sunday evening, while the House is scheduled to return to the Capitol Monday evening. Here's where things stand, as of Friday evening:

Budget
Preparation to negotiate details of an operating budget, which is projected to have a deficit between $9 billion and $12 billion, is expected to start in earnest early next week. The process could be a little different than previous years in an attempt to increase transparency, but we’ll have more on that later.

Capital plan
By Jamey Dunn
The four legislative leaders seem to be nearing an agreement on revenue sources for a major infrastructure program. A vote could come next week.

Cullerton said that the money for the plan would come from several proposals and that no one source would dominate. “It’s a combination — it’s a potpourri — of funding sources for the capital bill.”

We wrote about some revenue ideas earlier this week. Cullerton said some of the details could change. He said that beer and not just wine and spirits, as previously mentioned, could be included in a liquor tax increase. He added that a proposal to sell lottery tickets online would have to be cleared with the U.S. Department of Justice.

Senate Minority Leader Christine Radogno said that legalizing video gaming and taxing it as a revenue source could actually reduce the number of video poker consoles in the state. She said the legislative Commission on Government Forecasting and Accountability estimated about 65,000 machines could be operating throughout the state, while one proposal would reduce that to about 45,000. However, the actual number of existing machines is unknown, according to the commission.

“I think the idea is to limit them, not to have them on every street corner,” Radogno said. “I mean, they’re already out there, and we want to make sure that the state’s getting the revenue that we could get from the activity that’s already going on.”

Rep. Frank Mautino, a Spring Valley Democrat, already has a video poker measure advancing through the legislature.

That’s the revenue side. The spending side invites a whole new set of complications. “We want to be sure that everyone’s comfortable with the spending before we vote for the revenue side of it,” Radogno said. “So, there’s a lot of detail that has to be worked out there. There’s not gong to be any hidden allocations. No lump sums.”

She said that the leaders have been talking about funneling a large potion of the money through existing programs with established criteria in an attempt to take some of the bickering out of the highly political process.

Ethics
By Bethany Jaeger
Legislation drafted by Gov. Pat Quinn’s Illinois Reform Commission is expected to be ready for debate later next week, and campaign finance limits likely are in the mix.

Sen. Don Harmon, an assistant majority leader from Oak Park, has been working with Patrick Collins, chairman of the commission and former assistant U.S. attorney. While some items such as Freedom of Information Act reforms are expected to sail through the legislative process, more controversial items likely would be introduced in competing bills and debated.

Campaign contribution limits are one example. Lawmakers would debate various proposals and take up-or-down votes on each, according to Harmon.

The Reform Commission recommended capping individual donations at $2,400 and corporate or political organizations’ donations at $5,000. But Harmon said the controversy is “not whether there should be campaign contribution limits — but the size.” Some legislators think that a $2,400 cap is too low and that it would require them to spend too much time raising campaign cash in smaller increments.

A $10,000 limit per calendar year, on the other hand, may be a more comfortable level for many legislators, Harmon said. Some Senate Democrats don’t like basing the limit on a calendar year, but, Harmon said, “We need limits that are meaningful, and the calendar year seems to be an understandable measurement and could enhance the likelihood of enforcement.”

Here are some of the contribution limit bills waiting for action:

• Radogno has proposed SB 1548, a $10,000 limit for individuals, corporations, unions and clubs or political organizations.
• Chicago Democratic Sen. Kwame Raoul, however, would limit individual donations to $7,500 and corporate donations to $20,000, under SB 2257.
• Democratic Rep. Harry Osterman of Chicago introduced HB 24, which resembles the Illinois Reform Commission’s recommendations to mirror federal limits: $2,400 for individuals and $5,000 for political organizations.
• Sen. Heather Steans, a Chicago Democrat, is behind SB 1768, which would establish limits for individuals and political action committees, but it also would cap the amount statewide political campaigns could transfer to candidates at $30,000.

A longer-term proposal, on the other hand, is changing the way the legislature redraws congressional districts. Redistricting is being discussed but not lumped in as part of the end-of-session rush. Reform ideas, which include using a computerized process similar to Iowa’s, are likely to be debated in public hearings throughout this summer or, potentially, a special legislative session in September.

Another controversial issue that could be pushed back is the commission’s recommendation to grant state’s attorneys authority to wiretap conversations as part of public corruption investigations. Federal prosecutors have that power, while state’s attorneys do not (although they can wiretap for other kind of investigations).

A former state’s attorney, Democratic Sen. Bill Haine of Alton, sees red flags in the proposal. State’s attorneys are elected on a partisan basis, while federal attorneys are appointed by the president and confirmed by the U.S. Senate. Federal prosecutors also answer to the U.S. Department of Justice and the U.S. attorney general, which Haine said provides a checks-and-balances system. “So before we vest local politically elected prosecutors with the vast powers of the United States government, we should have a clear idea of where we are going to draw the line and what the checks and balances are. Just giving wiretapping authority, warrentless wiretapping authority or additional wiretapping authority without looking at how we’re going to have checks and balances on that authority, I think, is a mistake.”

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Capital plan taking shape

By Jamey Dunn
Jack Lavin, Gov. Pat Quinn’s chief operating officer, said today that a negotiated proposal for capital plan revenue sources could be ready by next week.

“Generally the framework for funding is there,” Lavin said. “We hope to have that finalized over the next week or so.”



He said that the legislative leaders and Quinn have been focusing on revenue sources in their discussions and added that spending decisions will take longer to hammer out with the legislature.

According to Lavin, there will be no lump-sum appropriations in the capital bill. He said that Quinn wants spending for projects to be specifically listed as line items. Money would also go directly to existing programs, but those programs have set criteria to meet when deciding how to distribute funds.

Lavin laid out the “framework” for revenue before a House appropriations committee this morning. It includes:

• Ending the diversion of money from the Road Fund to the general fund.
• An increase in vehicle registration and licensing fees.
• An tax increase on wine and spirits. (Beer would be excluded from the increase.)
• An tax increase on candy.
• Applying sales tax to some sweetened tea and coffee beverages, as well as health and beauty products.
• Internet sales of lottery tickets and having a private firm manage the lottery with a focus on appealing to new players.

Lavin said that a proposal to increase the motor fuel tax is not being considered. “It’s currently not part of the discussion,” he said.

He added that the governor’s Office of Management and Budget is still researching that framework to determine if it would raise the money needed for a major capital plan. The size of the overall plan is not yet determined.

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Video gaming advances

by Jamey Dunn
A bill that would expand gambling to help pay for new schools passed in a House committee today.

The measure, sponsored by Rep. Frank Mautino, a Spring Valley Democrat, would allow establishments where liquor is served, fraternal organizations, veterans' clubs and truck stops to have video gaming machines such as video poker. Many places already have the machines, but they can't legally pay out winnings. If approved, the state would require establishments that offered video poker to be licensed and would legalize betting on the games. The machines also would be taxed, with revenue going toward school construction projects and local governments.



Mautino said he did not make racetracks or off-track betting facilities eligible to operate video poker machines because he wanted to keep the bill simple in hopes of increasing its chances of passage. “For years this bill has been around, and it gets involved in the giant end-of-session bills, which usually collapse under their own weight,” he said.

Here's a break down of some of the numbers associated with the measure:

• 25 percent The percentage of net profits from the video gaming machines that would be taxed.
• 20 percent The amount that would go toward building schools.
• 5 percent The amount that would go to local governments.

• $2 The maximum wager per hand.
• $500 The maximum payout per hand.

• 21 The minimum age to play.
• $5,000 The maximum fine an establishment would pay for allowing someone under 21 to gamble.

• 25 The percent of licensing fees and fines that would go toward treating gambling addiction.
• 75 The percent that would go toward regulating the process.

Anita Bedell, speaking on behalf of the Illinois Church Action on Alcohol and Addiction Problems, said that making gambling so convenient would lead to more widespread addiction. “These machines are like the crack cocaine of [gambling] addiction,” she said. “The problem is people don't have to get in their car and drive to Las Vegas or a casino or a race track. They can just go down the street to a truck stop, or a restaurant or a bar.”

House Speaker Michael Madigan said last week that he does not want to consider any gaming expansions this session.

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Dynamic before budget negotiations

By Bethany Jaeger
Video by Hilary Russell

Rod Blagojevich is no longer governor, and it’s easy to assume that the atmosphere within the Capitol has done a 180 with two new legislative leaders and a new governor. But today’s speeches by three legislative leaders and Gov. Pat Quinn before a business luncheon in Springfield showed little if any concrete points of agreement about how they’re going to lead Illinois out of what Quinn deems a fiscal crisis.



The state faces between an $11 billion and $12 billion deficit next fiscal year, according to the governor’s office and the legislature’s economic forecasting arm. Quinn entered the “lion’s den” this morning and afternoon by first speaking to the Illinois Education Association, a teachers’ union that strongly opposes his proposed pension reforms, and then speaking to the Illinois Retail Merchants Association and the Illinois Manufacturers Association, business groups that oppose a state income tax hike.

“The notion that some [politicians] of both parties are running around saying we can get out of this without raising the income tax — they’re living in a dream world,” Quinn said to reporters after his speech.

Much of the speeches repeated statements heard after Quinn first proposed his budget in March. But the context has changed. The Illinois General Assembly now has 25 days to try to enact a state operating budget, finance a major construction program and approve major ethics reforms. My audio recordings failed today, so what follows is a summary of each speech:

Gov. Pat Quinn: He still wants to raise the income tax and increase the personal exemption to shield low-income families from the increase, but he said he’s willing to negotiate on the personal exemption. He also still wants to create a two-tiered pension system for teachers, meaning new hires would receive a less generous pension benefit. According to the Associated Press, however, Quinn used a speech before the Illinois Education Association to reveal that he dropped his proposal to require teachers’ to pay more into their pensions by 2 percent per paycheck. “We didn’t want that to derail a fundamental reform we must adopt, and that’s having a two-tiered system for the new state employees and new teachers,” Quinn later said. “They’re still going to get a pension, a very generous pension. It just won’t be as generous as what currently exists.” He also said he would not cut Medicaid, which is something Republicans support.



House Speaker Michael Madigan: He said he’s been meeting with small groups of Democrats and asking them to rank their most important programs, narrowing the list of places members are willing to cut. The approach, he said, was abnormal because they have to accept a “zero-based budget.” He then cast an ominous cloud over negotiations for a major capital construction program by saying he is not inclined to meet with House Minority Leader Tom Cross because, he said, “when the rubber hits the road, he’s not going to be there.” Madigan and Cross have clashed in the past on everything from gaming to working with Blagojevich. Republican votes are needed in the House to approve major spending or borrowing plans, but the ongoing icy relationships could have a chilling effect on other negotiations.

House Minority Leader Tom Cross: He did not speak at the Illinois Retail Merchants Association luncheon, but he did address the media later in the Capitol. He said he would “want no part” in a capital plan that financed construction projects by increasing the state income tax or the motor fuel tax. While he hasn’t meet with Madigan, Cross said he has met with both Senate leaders and the governor and talked about revenue ideas. “The bottom line is we’re all talking,” Cross said. “And they’re, I think, fairly productive talks of narrowing down some revenue streams to raise about $1 billion. I think it’s all good.” He specifically mentioned conversations about the House’s idea to legalize video poker and to the Senate’s idea to privatize the Illinois Lottery. Why the speaker spoke out against working with him, he said, is baffling. “I think with the speaker, there’s a pattern when he doesn’t want to do something himself, he looks for a villain or for somebody else to blame. And history will show that we are for capital.”

Senate President John Cullerton: He said he agrees with Republicans that the state should trim spending before resorting to raising income taxes. However, if the state still lacked enough revenue to maintain the same level of core services, he said he will ask the GOP to help approve revenue enhancements. Some Democratic members within his caucus also are working on a plan to expand gaming to raise money, but gaming expansions have been tried and failed multiple times in the past few years. The difference this time is that Cullerton has said he will not peg new gaming revenues to pay for construction plans. That could ease some political pressure on the size of the plan, which plagued previous efforts. Madigan has been cool to the idea of expanded gaming, although his chamber did advance a measure to legalize and tax video poker machines in taverns.

Senate Minority Leader Christine Radogno: She opposes income tax increases and said the state first needs to cut spending, find efficiencies and grow the economy with a capital plan that creates jobs. She agreed with Quinn’s proposal to create a two-tiered system for newly hired teachers as a way to control costs in the long run. She added that she supports Quinn’s Illinois Reform Commission’s ideas to reform state government, including campaign contribution limits. She said she “would vote for all of them as is as opposed to having nothing.”

Radogno also said she’s been working with Cullerton and Quinn and mentioned a new chemistry within the Capitol, which bodes well for a more productive state government. “There’s hope that we can actually accomplish something,” she said.

Yet, nothing’s truly off the table right now. The legislature and the governor have a lot of negotiating to do before they’re able to enact an operating budget or a capital construction plan within 25 days, but that’s likely to require all four legislative leaders to start meeting with Quinn in the same room soon.

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Alternative transportation

By Jamey Dunn
A transportation and business group is proposing what it says is a more specific plan than Gov. Pat Quinn’s proposal for major construction plans for roads, bridges and transit.

Sen. Martin Sandoval, a Cicero Democrat and chairman of the Senate Transportation Committee, came out in support of the Transportation for Illinois Coalition’s proposed capital plan today. The coalition claims the plan calls for more state money than Gov. Pat Quinn’s proposal for a capital plan, but almost $10 billion less than the coalition says the state should be investing in its infrastructure.



According to a 2006 study commissioned by the Transportation for Illinois Coalition, the unfunded need for Illinois transportation projects exceeds $23 billion. That number has not been adjusted for inflation. Linda Wheeler, a transportation consultant for the Transportation for Illinois Coalition, said the findings mirror the Illinois Department of Transportation’s estimates of the unmet needs.

In an attempt to be more realistic about the state’s budget restraints, the coalition has since pared that number down to a $13.5 billion “minimally adequate” plan. Michael Kleinik, Transportation for Illinois Coalition co-chair, said, “There is little money for expansion in this proposal, but it does bring us closer to where we need to be.”

Wheeler said that Quinn’s proposed budget is not specific enough about how much state money would go toward transportation and that it uses some creative accounting techniques. She said that some of the money that is listed as highway funding actually would go toward debt service on bonds.

Sandoval said he wants to fund the alternative plan with a motor-fuel tax increase, which he said has support in the Senate. However, he said he supports a higher increase than a version proposed in the House, which seeks an 8 cents per gallon increase. Sandoval said that he thinks there is little to no support for Quinn’s proposal to spend part of the money from an income tax increase to fund a capital plan.

While Sandoval had the backing of business groups, labor unions, transit officials and transportation experts, he was the only legislator making a pitch for the coalition’s proposal.

Sandoval urged swift action to hammer out a plan that could find enough votes to pass. “We are at a crossroads literally and figuratively here in Illinois, and if we don’t get it right today, I don’t know if we ever will.”

Many of the speakers who addressed the Senate committee this morning raised concerns that too much squabbling in Illinois over a capital plan could hurt the state’s image in Washington, D.C. and possibly damage its ability to seek increased federal funding in the future.

“It’s not lost on me, and I think it’s not lost on anyone in Washington who follows what’s going on in the states, that Illinois has struggled to come to terms with what it needs to do in the long term,” said Janet Kavinoky of the U.S. Chamber of Commerce. “But, the longer you debate and discuss and struggle with who’s going to invest in what, and who’s going to get credit for what, … it appears chaotic.”

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Appetizers to a bigger meal

By Bethany Jaeger
Rubber will hit the road, federal stimulus funds will begin to flow and some state operations will get a boost through the rest of the fiscal year. Gov. Pat Quinn signed multiple bills into law that will authorize the spending of about $9 billion. Surrounded by Democratic and Republican leaders, Quinn also enacted pension reforms that are designed to restructure the five public employee pension systems in response to corruption allegations exposed during the federal probe of former Gov. Rod Blagojevich.



The spending plan includes about $3 billion for a mini-capital plan, the first program to escape the halls of gridlock since before Blagojevich took office in 2003.

“It’s been 10 years since we had a capital bill,” said Senate President John Cullerton. “We’ve been in session for only 10 weeks, and we’ve already passed this major bill.”

Yet, the $3 billion plan is being framed as just a start to a larger program, which could include a $25 billion plan potentially financed by tax and fee increases. The funding proposals will face significant challenges in acquiring the number of votes needed to pass by the scheduled adjournment of May 31.

House Speaker Michael Madigan said today’s action set a precedent. “Before we did the spending, we reformed the pension systems. I think that’s how we should do this from now until the end of the session.”

All agreed that the capital bill and the pension revamp are only first steps to more construction plans and government reforms.

During a bill signing ceremony outside of his Statehouse office, Quinn touted the bipartisan cooperation. “The reform, the investment in jobs, the investment in reopening our [sites] and making sure our appropriations are proper.”

Not all 11 state historic sites that were closed by Blagojevich last year will automatically reopen by June 30, according to Dave Blanchette, spokesman for the Illinois Historic Preservation Agency. He said the supplemental spending plan earmarks $800,000 to make payroll and hire seasonal workers to accommodate increased tourism at the 18 sites that are currently open. But he said the agency could not promise the money would stretch far enough to reopen all 11 sites.

“We want to make sure we can make the money go as far as possible, but we also want to get the historic sites with the highest visibility reopened as soon as possible,” he said. High-visibility sites include the Dana-Thomas House in Springfield, the Lincoln Log Cabin near Charleston and the Hauberg Indian Museum at Black Hawk State Historic Site in Rock Island, he said.

The decision about which sites will reopen will be made by the directors of the Historic Preservation Agency and the Department of Natural Resources, which Quinn recently ordered to consolidate by July 1.

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"Trifecta" heads to the governor

The House on Thursday night nearly unanimously approved the $9 billion plan for federal stimulus funds, transportation projects and supplemental spending for state operations. The Senate approved the package earlier in the day. The spending plans now head to Gov. Pat Quinn’s desk, satisfying the governor’s request for the General Assembly to approve a small version of a capital plan for roads and bridges before lawmakers left on a two-week spring break.



House Republicans early in the day weren’t on board because it wasn’t clear how the money would be spent, said House Minority Leader Tom Cross. However, working with Quinn’s office throughout the day, he said his caucus finally got a list. “The governor was very helpful, both himself personally and his staff, in trying to make this happen,” he said.

“Today’s actions are a great example of what we can accomplish when we come together with a common purpose,” Quinn said in a statement.

Senate President John Cullerton, however, foreshadowed the difficulty in securing the three-fifths majority needed to do a larger capital program based on tax and fee increases later.

Cigarette tax advances
By Jamey Dunn
A timely example of that difficulty in advancing any tax increase occurred early in the evening. After missing the mark by one vote the first time, a $1 sales tax increase on each pack of cigarettes advanced through the Senate Thursday when a second vote was taken.

Senate Bill 44, which would phase the tax increase in over two years, had 29 in favor, 28 opposed and one voting present. It took a last-minute, closed-door meeting between Cullerton and House Speaker Michael Madigan before the vote was retaken, resulting in the 30 votes needed to pass. Twenty-six members still voted against it.

Cullerton said that the bill has support from Madigan and Gov. Pat Quinn, but he added that the close vote indicates a difficult road ahead for future tax increases. “This was the first bill that required people to actually vote for a tax,” he said. “And you can see it’s not easy for people to do that. Unfortunately, we’re probably going to have to do a lot more.”

The bill heads to the House, which will reconvene Friday morning. The Senate finished its business and headed home for spring break.

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"Trifecta" spending plan on its way — UPDATED

By Bethany Jaeger
UPDATE: The Illinois Senate unanimously approved the $9 billion package to release federal stimulus funds, state bonds for road and transit repairs and supplemental spending for state operations. Senate Minority Leader Christine Radogno applauded the "true bipartisan cooperation" it took to get there. The package now heads to the House, which can either accept or reject it. It won't be able to change it.

ORIGINAL POST: The Illinois Senate this morning advanced a spending plan worth slightly more than $9 billion that is designed to jump start the flow of state and federal dollars for construction plans, state operations and federal stimulus programs.


Democrats and Republicans in a morning Senate committee applauded the plan as a “good first step” toward a bigger capital plan for road and school construction projects, but that’s tied to a string of potential and controversial funding sources, including tax and fee increases.

Before hopping on board, Republicans sought a provision to ensure that the money would flow based on an existing five-year transportation plan, not based on political preferences. Senate Minority Leader Christine Radogno said during a morning committee that given the distrust between the legislative and executive branches during the last few years of former Gov. Rod Blagojevich’s administration, Republicans wanted assurances. This really kind of puts a public face on the private conversations that have been going on,” she said, adding that the plan was a “very good, positive step forward” for Illinois.

Senate President John Cullerton said: “We let the engineers decide, not the politicians. It has nothing to do with Blagojevich or past scores to settle. We’re just trying to do it on the square.”

For instance, $150 million would be doled out based on a traditional formula, where Chicago-area districts get 45 percent of the funding and downstate districts get 55 percent of that funding. Another sum of $450 million would be distributed based on an existing five-year plan for construction projects, which Illinois Department of Transportation engineers rank by another formula.

Labor groups represented by the AFL-CIO and some operating engineers support the plan; however, one Springfield-based chapter of the operating engineers union opposes it because the state-funded capital plan would only designate $8 million to the central Illinois district that includes Sangamon County. But Cullerton pointed out that the central Illinois district would get $54 million of federal stimulus funds.

Federal stimulus funds will distribute money for everything from weatherization to education. However, the plan advanced by the Senate today would take some money out of the portion that would have gone to public education and use it for state operating expenses. Then the state would use incoming federal stimulus funds to eventually backfill the amount for education. According to Sen. Donne Trotter, chief budget negotiator for the Senate Democrats, education, in the end, would come out about even. That is, after all, the intent of the federal stimulus, he said.

“The stimulus package was never intended for us to grow anything. It was to ensure that we didn’t have to cut anything, and that’s what we’re utilizing those dollars for.”

The full package now heads to the full Senate, where a vote is expected this afternoon. If approved, it would head to the House later today or tomorrow.

Here are some more highlights of the “trifecta,” dubbed by Trotter:

Federal stimulus funds = $6.7 billion

• $1.7 billion to pay down the state’s Medicaid bills, including an enhanced federal reimbursement rate of about 61 percent for 27 months.
• $500 million for high-speed rail.
• $300 million for a Chicago-area project to reduce freight and vehicular traffic congestion.
• $285 for Amtrak improvements.
• $40 million for transit.

Other funds are earmarked for low-income housing, developmental disability and mental health services, programs for women and children, youth services, criminal justice and domestic violence grants, weatherization jobs and training, environmental protection, water treatment and education.

Read more in Illinois Issues this month.


$3 billion state bonding program for transportation projects

• $2 billion bonded from the dedicated Road Fund to repair roads and bridges.
• $1 billion bonded from the state’s general fund for transit maintenance projects.
• $150 million for emergency pothole repair on state and local roads.
• $40 million for Chicago-area transportation agencies to release funds that previously were suspended under a previous capital program.

Supplemental spending for FY09 operating budget = $109 million

• $363 million to reopen closed historic sites through June 30.
• $25 million for services for women and children, capturing more federal matching funds.
• $20 million for flood relief.
• $10 million for line-of-duty awards.
• $6.7 million for court reporters.

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Mini-capital plan coming Thursday

By Bethany Jaeger
State lawmakers are expected to vote tomorrow on a “mini-capital plan,” which would drive $2 billion into crumbling roads and bridges and $1 billion into mass transit as part of a five-year transportation program, relying on bonding and transfers from existing state funds. The plan is being framed as a precursor to a more robust capital plan that would rely on new revenues through driving-related fees and, potentially, tax increases. But some fear enacting a mini-capital plan now could slow the momentum for a larger plan later.




Illinois Department of Transportation Secretary Gary Hannig, former deputy leader for House Speaker Michael Madigan, said this afternoon in the Statehouse that the mini-capital plan would go toward maintaining and fixing existing roads and bridges, not paving new ones.

“Right now, the conditions of our roads as rated by the engineers is about 76 percent, which most people would say is not good,” he said. “Within the next five years, we want to take the conditions of the roads … and bring them up to 90 percent.”

Spending money on existing roads, however, would not tap into federal highway funds that have been waiting a long time for a state match. Hannig added that the proposal would include an emergency plan to fill potholes on some state and local roads.

While Sen. Martin Sandoval, a Chicago Democrat who chairs the Transportation Committee in his chamber, said he would vote to support the mini-capital plan, he said it would be a minimal investment that drastically undercuts the funding needed for mass transit.

There’s been a longstanding agreement that for every $1 spent on mass transit, the state would spend $2 on roads and bridges. Sandoval wants to change that so the state would spend an equal amount on each. He cited a five-year plan to dedicate about $5.5 billion for roads and bridges and another $5.5 billion for transit.

“Now is the time to do it right,” Sandoval said in a Statehouse news conference this afternoon. “Doing it in a half-step method today is the wrong way to go.”

To generate some more money that could shore up funds for mass transit, he supports the idea to increase the state’s motor fuel tax by at least 8 cents a gallon. That’s currently proposed in HB 1. Yet, Sandoval said that a motor fuel tax increase, alone, wouldn’t be enough. It would have to be coupled with Quinn’s proposed increases in driving-related fees, as well as federal funds.

Brian Imus, state director of the Illinois Public Interest Research Group, added that the Illinois Department of Transportation could use some of the $1.4 billion of federal stimulus funds for mass transit, but the department has not planned to do so. (We wrote about mass transit advocates last week.)

Transportation Department spokeswoman Marisa Kollias said the agency decided to put all federal “highway investment” funds into highways rather than into transit. “There are needs in both programs, and we chose to use the limited funds to address road and bridges,” she said in an e-mail.

Sandoval’s push for more mass transit money will come up again the week the legislature returns from its two-week spring break. He said he plans to schedule a public hearing in Springfield to discuss a $13.5 billion capital plan called for by labor and business officials of the Transportation for Illinois Coalition. That $13.5 billion, however, also doesn’t include a specific funding source. The coalition offers general ideas here. The coalition did send letters today to the governor and to lawmakers to say its members supported the mini-capital plan.

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Transit and taxpayers

By Bethany Jaeger
Mass transit advocates say Gov. Pat Quinn’s proposed capital program needs an overhaul and relies on “fuzzy math,” and they look to an increase in the state’s motor fuel tax to help pump more money into transportation projects.


Quinn said this week that he wants to see the start of a capital program approved by the legislature by April 3. “I think it should be for roads, bridges and public transit. We shouldn’t forget that one of the key things of reducing our reliance on petroleum and foreign oil is having good public transit, as well as improving our roads and bridges.”

Yet, his proposal to provide about $4.6 billion for mass transit systems over five years doesn’t satisfy Chicago-based civic organizations. They said that Quinn’s plan relies more on federal funds and matching grants, including only about $1.5 billion in new state spending for transit.

“It’s not even enough money to cover the basic maintenance and repair needs to keep the [Chicago] region’s transit network in its current condition, much less to upgrade the transit network,” said Brian Imus, state director of Illinois Public Interest Research Group. He joined leaders of Chicago Metropolis 2020 and the Metropolitan Planning Council today in a teleconference.

Given the economy, a business and labor-based group called the Transportation for Illinois Coalition recently reduced it’s request for transportation infrastructure from $23 billion over five years to $13.5 billion over five years, but that would only fund a “minimally adequate, maintenance- and safety-focused program.”

To reach the $13.5 billion, it would take about a 13-cent increase in the state’s motor fuel tax, said Chicago Metropolis 2020 Vice President Jim LaBelle. The motor fuel tax has been 19 cents a gallon since 1990. If it were adjusted for inflation, it would be about 32 cents, he said.

Quinn, however, opposes the motor fuel tax increase. The idea has support from Senate President John Cullerton, and the House currently is considering HB 1, which would increase the tax by 8 cents a gallon.

LaBelle said his organization would support a motor fuel tax increase if it were accompanied by reforms to the way the state prioritizes construction projects and distributes the money. The group supports HB 2359, Rep. Kathy Ryg’s bill that we wrote about earlier this week. It would create regional transportation policy groups to advise the Illinois Department of Transportation when ranking projects.

Peter Skosey, vice president at the Metropolitan Planning Council, agreed with the need for a new planning process. “We for too long have spent our dollars based upon arbitrary geographies and political clout and less upon strategic investments.”

Watch whether Ryg’s measure combines with Rep. John Bradley’s 8-cent increase in the motor fuel tax to create a new revenue source, as well as a new way of distributing that money to transportation projects.


The state's TAB
By Jamey Dunn
The state’s new Taxpayer Action Board, created by Gov. Pat Quinn by executive order, held its first meeting today. The board plans to explore only ways to reduce spending, not ways to find new revenue sources, according to Tom Johnson, chairman of the new board and president of the Taxpayers’ Federation of Illinois. (He’s also a former director of the Illinois Department of Revenue during Gov. Jim Thompson’s administration.)

The board is supposed to make recommendations by May 22, nine days before the state constitutional deadline for the General Assembly to adjourn for the summer.

The board is charged with proposing ways to streamline government operations to save money, particularly for Medicaid, education, human services, as well as pensions and health care benefits for state workers.

The board is comprised of former lawmakers, policy experts, educators, business leaders, tax experts and individuals from health care and human services. Organizations such as the Metropolitan Planning Council and the Illinois Farm Bureau also have members on the board.

Jerry Stermer, Quinn’s chief of staff, said at the meeting that the board was formed to get a new perspective on the state’s deficit from people who represent their communities. “Maybe we’ve asked some of these questions before, but let’s ask them again. Let’s ask them in a different way, and let’s see if there are some redesigns, some reshuffling of the deck,” he said.

The state Senate also formed a special Deficit Reduction Committee, which issued a bare bones report with pages of testimony but few recommendations after four weeks of public hearings. See more here.

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