Next session dates: TBA
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This week...
Short-Term Bailout for Mass Transit
Lawmakers returned to the State Capitol for two days this week to debate the supposed "crisis" in mass transit in northeastern Illinois but left town without taking any action to resolve the problem for the long-term. While no final solution was reached, a deal was brokered that will provides a short-term resolution for the mass transit's funding problem and avoids the "doomsday" scenario that was projected to begin on November 4.
Under the short-term Band-Aid approach that will delay the reduction of 39 bus routes, 600 employee layoffs, and a $1 fare hike, the Federal Transit Authority (FTA) provided authorization for $27 million in Series B bond money to be used for operating purposes. This bond money, normally used for capital projects, will now be used for operating costs of the CTA ($21 million) and the suburban bus system PACE ($6 million) through December 31. This is the second such Band-Aid approach that has simply delayed possible cuts in service and fare hikes.
According to published reports, Chicago Mayor Richard M. Daley and Chicago Transit Authority (CTA) Chairwoman Carol Brown would only accept the temporary bailout if the funds were provided as a grant instead of a loan.
Prior to the temporary bailout reached on Friday, members of the House Mass Transit Committee spent several hours on Thursday trying to hash out a compromise. The original proposal to impose a 0.25 percent sales tax in Cook and the collar counties did not appear to have the necessary support for passage in the House of Representatives. While the sales tax proposal languished, legislators discussed an alternative solution that would divert gas tax revenue from Cook and the collar counties to fund the mass transit system. In exchange, revenue from another source, possible gaming, would be used to fill the hole in the gas tax.
So, lawmakers are now returning to their districts without solving the mass transit "crisis" meaning that they will likely need to return to Springfield prior to the end of the year to work on another solution. According to reports, the Governor and four legislative leaders plan to meet next week to resume discussions.
Capital Infrastructure Discussions Continue
Despite numerous discussions and press stories, the General Assembly left town without passing a new capital infrastructure program. However, some movement occurred when House Speaker Michael J. Madigan announced that he would consider legislation to create two new casinos, including one land-based casino in Chicago, in addition to 3,500 new gaming spaces at both existing riverboats and horse tracks. Revenue from the new casinos would be used to fund a new multi-billion dollar capital infrastructure program to build new roads, schools and bridges.
The Speaker also announced that it would be imperative to create an entirely new Illinois Gaming Board with potential nominees vetted by the Supreme Court before being selected by the Governor and confirmed by the Senate. This new Board would then have jurisdiction and oversight of the casino industry. There was no immediate response from the Governor or Senate President.
Legislature Passes "BIMP" Bill for Schools, Tax Code
Late Friday afternoon, legislators unanimously passed a Budget Implementation (BIMP) bill (SB 783) that will authorize schools to spend an additional $550 million that was included in the budget passed by the General Assembly in August. After the Governor amendatorily vetoed about $463 million from the state budget, Senate President Emil Jones (D-Chicago) broke an agreement with the other three legislative leaders to uphold the budget and sided with the Governor. Claiming that the deal had been broken, Speaker Michael J. Madigan (D-Chicago) refused to call the BIMP bill that helps determine how the funds are allocated.
As a result of the political infighting, schools were unable to spend an additional $550 million that had been appropriated for K-12 education. This change, which now goes to the Governor for high expected signature, will stop school aid payments from being reduced in the middle of the year.
In addition to the education funding language, the BIMP bill makes several changes to the Illinois Tax Code that were necessary after the General Assembly passed legislation (HB 1544) earlier in the year that sought to eliminate "corporate loopholes." Among the changes is new language regarding the apportionment of income for airlines and transportation services.
Electronic Waste Meeting
Senator Susan Garrett (D-Lake Forest) convened a new round of talks this week focusing on the creation of a new electronic waste recycling act in Illinois that would follow similar actions in nine other states including California. Included in the draft proposal was the creation of a new Commission to oversee the program including the ability to set fees and determine the scope of recycled items outside the statutorily-required televisions, computers, laptops, and monitors.
Attendees from the IMA, retailers, electronic manufacturers, environmental groups, and the Illinois Environmental Protection Agency (EPA) discussed the proposal for several hours and left without resolving any conflicts. Items that stirred heated debate included how to address "orphaned" electronics, raising revenue from manufacturers or retailers, how to handle "legacy" issues, using a market-based or return-based approach, and determining who would oversee the program.
The IMA will continue to attend and participate in meetings moving forward as Illinois decides how and when to mandate a new recycling program. Comments and concerns regarding this type of program should be directed to Mark Denzler at the IMA.
State Revenue Report Released
The Illinois Commission on Government Forecasting and Accountability released its monthly state revenue report that indicates strong concern about the economy due to the rising price of oil, decline in consumer confidence, continued slump in the housing market, and sharp decline in the value of the dollar. According to the Commission, these developments have led to slowing employment gains both nationally and in Illinois.
Illinois' unemployment rate is up nearly a full percent from this time last year and the manufacturing sector has topped the 200,000 mark in terms of jobs lost since the beginning of this decade. More than 55,000 of those jobs have been lost during the tenure of Governor Blagojevich.
While overall October revenues increased due to federal sources and fund transfers, the slowing of the economy should serve as staunch omen to the Governor and those legislators that want to continue trying to create massive new government programs such as the proposed $3 billion universal health care program. Illinois continues to struggle to raise revenue to pay for its current obligations, including the pension debt, and adding more state programs will only further exacerbate the problem.
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