Illinois Capital Bill

Politics Risk Proposal to Fund Up to $34 Billion in Construction

by Craig Barner

Politics could imperil what is probably the most important legislative issue to face Illinois’ construction industry in a decade.

A mammoth capital bill to fund road, transit and other projects will likely be considered by the 96th General Assembly when it convenes for the first time in January.

“A bill could come next spring,” says Jennifer Morrison, managing director of the Transportation for Illinois Coalition, a Springfield-based organization of state, regional and local groups backing a capital plan. “That’s my prediction.”

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A successful capital bill is not a certainty. Two different versions of a bill called Illinois Works were considered in the previous legislative session, a $34-billion package and a scaled-down version at $25 billion, says Clayton Harris III, deputy chief of staff for Democratic Gov. Rod Blagojevich and former chief of staff for the Illinois Department of Transportation. They passed in the Senate with bipartisan support but died in the House.

The $34-billion version, which passed in the Senate in late May, would rely on three elements for funding: the expansion of gaming, the partial lease of the state’s lottery and federal matching funds. The bill faltered in the House in part because the Democratic leadership blocked it.

House Speaker Michael Madigan is concerned about expanded gaming and the lease of the lottery because of questions about ethics in the administration, says Steve Brown, a spokesman for the speaker.

“The need for strict safeguards on how the money is to be spent is because of the track record over the last six years of this administration,” Brown says. “In most cases they don’t do a really good job of keeping their word.”

Ethical challenges have embroiled the Blagojevich administration. In October, for instance, William Cellini Sr. was indicted by U.S. Attorney Patrick Fitzgerald on charges of conspiring with convicted influence peddler Antoin “Tony” Rezko for illegally seeking campaign contributions to benefit Blagojevich.

Harris, the Blagojevich aide, counters that these concerns should not jeopardize a capital bill. “Knowing both of these men as I do, the well-being of the state would come first,” he says.

The governor himself has not been accused of wrongdoing.

Getting a fair price for the partial lease of the lottery is another concern of Madigan, Brown says.

Criticisms aside, Madigan “believes there is the need for a capital plan,” Brown adds.

The $34-billion bill would provide $10.875 billion for roads and bridges; $5.6 billion for transit, airports and transportation; $4.1 billion for school construction; $2.2 billion for economic development; $1.8 billion for environment and energy; and $500 million for state facilities, Harris says.

Opposition to Funding Mechanism

Others have criticized Illinois Works because of how it would be funded.

The Transportation for Illinois Coalition calls for $14.4 billion to be spent over five years on highways and bridges, transit, airports and related needs, Morrison says.

In fact, the $34-billion version of Illinois Works would provide about $16.5 billion for those needs—$10.875 billion on just roads and bridges and $5.6 billion on other transportation needs, Harris says.

But the plan calls for existing funds ($3.128 billion) in the budget of the Illinois Department of Transportation’s to be used to leverage $7.742 billion in matching federal dollars in the Highway Trust Fund.

“I don’t want to say we’re not using IDOT’s (Illinois Department of Transportation) budget to get there [with funding] because that’s not true,” Harris says.

Chicago Metropolis 2020, a private, nonprofit planning organization made up of local business and political leaders, opposed Illinois Works for not pursuing new money, says James LaBelle, deputy director.

“It’s easy to pump up numbers to make it look big, but you need to look below the surface to see what’s new money and what’s existing,” he says.

Other opposition emerged during 31 public hearings held statewide for five months in the early part of 2008.

Called the Illinois Works Coalition, the hearings were chaired by former Speaker of the U.S. House Dennis Hastert, a Republican, and Southern Illinois University President and former U.S. Congressman Glenn Poshard, a Democrat.

They discovered some resistance to the expansion of gaming, Harris says. As a result, the scaled-down plan was proposed. Like its sister, the $25-billion version passed in the Senate with bipartisan support but did not survive in the House. It would duplicate the bigger version and provide $10.875 billion for road and bridge construction only.

The coalition also unearthed strong opposition to increased taxes, and neither version of Illinois Works would rely on more taxes.

A Pressing Matter

Urgency surrounds a capital bill if matching federal dollars are to be used for financing.

Funding for the Highway Trust Fund is derived largely from federal motor-fuel taxes. The trust had become depleted in September, due mainly to a decline in highway travel and a decrease in federal tax revenue because of reduced fuel purchases, prompting an $8-billion transfer from the general fund signed into law by President Bush in September.

The economy continues to wheeze, and the Highway Trust Fund could run out of funds again in the latter part of 2009, says Brian Williamsen, a spokesman for the governor.

Also, a capital bill could lose steam as the economic issues increasingly dominate policy discussions. In November, the Illinois Department of Revenue projected an $800-million shortfall in 2009 because of reduced revenues from individual, corporate and sales taxes.

Hopes Strong for Bill

Business and political leaders and planning experts have been urging a capital bill for years.

The motivation is to maintain the quality of life in Illinois, says Chicago Metropolis 2020’s LaBelle. More specifically, the impetus is that a capital bill would generate jobs, accommodate an expected increase in population and invest in infrastructure.

“Being local to Chicago, our transit system has no state or regional funds to invest in new train cars or other capital improvements,” LaBelle says. “We’re in a system-maintenance mode operationally.” At least seven major projects—among them, a Chicago Transit Authority Circle Line in Chicago; extensions of the CTA Red and Yellow lines; and the suburb-only Metra STAR line—are in limbo.

In addition to Illinois Works, two other capital bills were reportedly crafted in the previous legislative session—one by Madigan’s staff and the other by a group of legislators in the northern part of the state—but never made public, Harris says.

Giving further push is the historic support of Democrats for public works in tough economic times. They will maintain their dominance over their Republican rivals in the Senate, 37-22, and expand it in the House, 70-48, in Springfield.

A bill would ride the coattails of President-elect and Illinois son Barack Obama and pump up Chicago for the 2016 Summer Olympics. A state construction plan could sway votes for the Windy City when the International Olympic Committee meets in Copenhagen in October to decide which of the four remaining candidates will get the prize.

Organized opposition to a capital bill in principle has not emerged, Harris says.

Illinois First in Nation?

No other states are known to be considering a capital bill other than California, where there is “talk,” Harris says. A bill has not actually been introduced in the Legislature in Sacramento.

In Illinois previous capital plans included the $6.3-billion Illinois FIRST approved under the administration of Republican George Ryan in 1999. With matching funds, about $12 billion was ultimately expended. Former Gov. Jim Thompson, another Republican, oversaw the $2.3-billion Build Illinois plan in the 1980s.

As expected, construction professionals support a capital bill.

“We need our legislators to work together to produce this now,” says Michael Meagher, vice president of James McHugh Construction Co. The Chicago-based contractor had about $100 million in billings in transportation and infrastructure in 2008.

Echoing him is Dave DeYoung, a lobbyist for the Itasca-based Illinois Road and Transportation Builders Association.

“There is a significant amount of road work that needs to be done in Illinois both on the expansion side and the repaving side,” DeYoung says.

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