CAPITAL BILL: House Democrats advanced a $2.44 billion plan to pay for state transportation infrastructure improvements Thursday, May 9, that hinges on a hike in the motor fuel tax, vehicle registrations and fees.
It is the “beginning of a dialogue” for how to fund road, bridge and mass transit projects, said Rep. Mike Zalewski, a Democrat from Riverside who is sponsoring the bill.
Republican lawmakers took issue with components of the revenue measure — a boost to the state’s motor fuel tax, an omission of a bonding option and giving local governments the ability to levy an additional gas tax, to name a few.
One representative, Mokena Republican Margo McDermed, also protested the lack of time her colleagues had to prepare for the Revenue and Finance Committee meeting. Members, she said, received a copy of the legislation Wednesday.
“We’ve been negotiating and discussing all of the issues — which are large and complex and have many moving parts and involve many, many different interest groups — for months, and to say that we’re going to have a hearing that lasts less than an hour and move this bill out is not an act of good faith, it’s not good governance and it’s the usual bullying that goes on in this Illinois House of Representatives and I need to make that clear,” she said. “We all know this bill is going to get out. We all know we’re going to keep working, but this is an evil, evil process.”
The plan calls for a 25-cent increase in the motor fuel tax, to 44 cents per gallon, and a 30.5-cent increase for diesel fuel, to 52 cents.
It also bumps registration fees for passenger cars by $50, to $148. Driver’s license fees would double to $60, and the fee to register an electric car would be $1,000. The increases would also be indexed to increase with inflation.
Zalewski’s proposal is identical to one released Wednesday by Chicago Democratic Sen. Martin Sandoval.
The motor fuel tax bump would be a hard pitch for Democratic Rep. Emanuel Chris Welch, from Hillside, to make to his constituents, he said.
“From 19 cents to 44 cents a gallon for gas is a lot of money and to go home and try to explain that to people — that’s hard to do, especially in a district like the one I serve,” Welch said.
And Rep. David McSweeney, a Republican from Barrington Hills, said while it is “clear” the roads, bridges and other transportation infrastructure in the state need attention, raising the motor fuel tax is not the way to pay for it.
“I oppose this bill because I don’t support an increase to the gas tax, and I think we need a capital bill, but I think we should use the revenue from the sports gambling bill,” he said.
Democratic Gov. J.B. Pritzker wants to legalize that practice, and he projected $200 million in revenues from sports gambling licensing fees in his proposed budget. It is one of several revenue streams in Pritzker’s budget that are not guaranteed to become law.
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SCHOOL INFRASTRUCTURE: A group of K-12 education representatives on Tuesday, May 14, added to the chorus of calls for a statewide capital infrastructure bill that goes beyond road and bridge projects.
At a Capitol press event, the group detailed infrastructure needs at school districts across the state, appearing in front of poster boards with images of outdated and dilapidated Illinois school facilities. They did not, however, give any suggestions as to how the revenue for capital infrastructure projects could be raised.
“I think our role is to show that the need exists across the state pretty widespread, and then show the most effective and efficient ways that we could use the money to enhance educational opportunities,” said Brent Clark, executive director of the Illinois Association of School Administrators. “I think our big job is to rely on the General Assembly to determine the revenues to fund a capital bill.”
In a budget proposal packet distributed by Gov. J.B. Pritzker in January, K-12 deferred maintenance needs were estimated at $9.3 billion. The state has not passed a capital projects bill since 2009.
Superintendents at the news conference detailed 100-year-old buildings, excessive use of mobile classrooms and crumbling facilities that schools don’t have the funding to correct.
The General Assembly is discussing an infrastructure funding bill which would increase motor fuel taxes and state licensing fees, but the $2.4 billion in estimated revenue generated in that proposal could be used only for roads and bridges due to a “lock box” amendment passed in 2016.
Funding for vertical infrastructure would have to come from other sources. State Rep. Will Davis, a Homewood Democrat, said discussions for revenue are ongoing, although he did not give specifics as to where money would come from.
“What these folks behind me (superintendents and education representatives) also have to do is advocate, not just for the project itself, because I’m sure that our legislators will support the project,” Davis said. “They also have to encourage their legislators to be open-minded when it comes to the revenue side of this as well because it is going to take some tough votes to get us to where we need to go.”
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GRADUATED TAX: Democrats in the Illinois Senate said Thursday, May 9, that a $1.5 billion greater-than-expected April revenue windfall won’t solve the state’s long-term fiscal problems, and they urged House Democrats to move forward with a constitutional amendment to overhaul the state’s income tax structure.
“The truth is that manna from heaven may get us out of the desert, but it will not feed us for years to come,” Sen. Don Harmon (D-Oak Park) said during a Statehouse news conference.
Harmon and fellow Democratic Sen. Toi Hutchinson, of Olympia Fields, were pushing back against statements made Wednesday by House Republican leaders who said the unexpected windfall, and the decision by Gov. J.B. Pritzker’s administration to raise their forecasts for future revenues, mean the state no longer needs to overhaul its tax code or adopt any of the other new taxes that Pritzker has proposed.
“It plugs one hole in a very, very leaky boat,” Hutchinson said “We have a lot to make up.”
Harmon and Hutchinson also appeared to be applying subtle pressure to House Democrats who so far have not acted on a proposed constitutional amendment that would replace Illinois’ current “flat” income tax with a graduated tax structure that would apply higher rates to higher-income taxpayers.
That proposed amendment passed the Senate on a straight party-line vote of 40-19 on May 1, but there have been reports that House Democrats may not have the three-fifths majority – 71 votes – that they will need to place the question on the November 2020 ballot.
“The one thing we always expect is that nothing moves out of either chamber without the weight and input of the other chamber,” Hutchinson said. “This is absolutely normal and expected.”
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VIDEO GAMBLING: If the state of Illinois wants more revenue from video gaming, one gaming industry executive said Thursday, May 9, lawmakers should loosen betting restrictions rather than raise video gambling tax rates.
Ivan Fernandez, who heads the Illinois Gaming Machine Operators Association, offered that proposal to the state House Executive Committee, which is considering several alternatives for increasing state revenue from video gambling.
“Our proposal is projected to far exceed (Gov. J.B. Pritzker’s) request, without resorting to a tax increase,” Hernandez said.
The Executive Committee, chaired by Democratic Rep. Chris Welch of Hillside, heard testimony from representatives of the video gambling industry who unanimously oppose a proposed tax hike that Gov. Pritzker outlined in his late-February budget address. No legislation has been introduced so far.
Elements of Fernandez’s proposal include raising the bet limit on single plays from $2 to $4, increasing the maximum winnings on a single play from $500 to $1,199, allowing games with higher jackpots, and increasing the number of gambling terminals allowed at one location from five to six.
Those measures, Fernandez said, would create $210 million in new tax revenue the first two years, without changing the tax rates.
The governor said his plan would result in more than $100 million in new revenue for state and local governments.
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