Governor Pritzker gave his first budget address Wednesday. The Governor identified $3.2 billion in structural deficit for FY 2020, which begins July 1. To address this deficit, the Governor recommended several steps.
- Stretching out the length of time the state takes to fully fund its pension system, coupled with a graduated income tax in future years to make larger payments into the system
- Issuing $1.5 billion in general obligation bonds to pay down the bill backlog and reduce the state's interest rates and lowering the interest rate in the Prompt Payment Act
- Raising new revenues: $17 million from legalizing and taxing sports betting, $170 million from license fees for state legal cannabis sales, $390 million from a managed care assessment, $10 million from e-cigarette taxes, $55 million from increasing taxes on cigarettes, $89 million from taxing video gaming in a graduated way, $19 million from a plastic bag tax, $75 million from reducing the retailers sales tax discount, $6 million from reducing public scholarships to private schools, $94 million from decoupling from the Federal Repatriation Credit, and $175 million from incentivizing late tax payments (these would all require legislation)
The Capital portion of the budget, which is where the construction budget is found, indicates IDOT projects a $1.8 billion annual program this year.
That is a historic low for the program and the budget does note that this amount is inadequate. The budget also notes that deferred maintenance at the Capital Development Board, which handles capital for state property, and higher education institutions totals $14.5 billion.
Finally, the Capital Budget shows that
the state's NHS system miles and non-NHS marked routes are already below the federal benchmarks required by MAP 21. The system is projected to fall further behind next year without new funding. If the state remains below the federal benchmark in 10 years, it jeopardizes 60% of its federal funds, which make up 90% of the road program.
The Governor's Budget books can be found
SENATE SUBJECT MATTER HEARING
The Senate Appropriations II and Transportation Committees' subcommittee on Capital met today. The Governor's Office of Management and Budget, IDOT, the Board of Higher Education, the Community College Board, and the Capital Development Board all testified.
Alexis Sturm, the Governor's Budget Director, testified that $31 billion in capital spending from the Illinois Jobs Now! Capital plan remains unspent, most of which is in CDB construction projects. She also noted that increased bond debt to pay for capital will need to be considered in the larger picture of the state's debt affordability, but that she believes there will be room for some bonding for capital because of retiring debt service.
Matt Magalis, Acting Secretary for IDOT, testified along with Paul Lotee, Director of Highways, Carl Puzey, Acting Director of Bridges and Structures, and Tracy Sisk, Bureau Chief of Planning and Programming, all testified. Acting Secretary Magalis opened the testimony by offering an overview of the state's inventory and emphasized that a large percent of that inventory is nearing the end of its useful life. He closed by asking the legislature to prioritize a sustainable funding source for IDOT projects.
The key takeaways from IDOT's testimony are that they estimate state highways and bridges need another $13-15 billion over the next ten years to meet federal targets-nearly double last year's estimate-transit needs $19.1 billion, passenger rail needs $800 million, freight rail needs $4 billion, and ports, locks and dams need hundreds of millions. These are key benchmarks for policy makers as they work toward crafting a capital bill.
Legislator questions focused on the recent news covering Lake Shore Drive's structural failure and the reports on the I-80 bridges in Will County. Puzey emphasized that IDOT inspects each of its bridges based on their condition and makes a condition to close them or place a weight limit if the bridge's condition requires it. Senators seemed interested in digging into the way IDOT rates structures and prioritizes projects more thoroughly and the IDOT representatives promised to sit down with them.
Overall, the Senators seemed interested in learning more about the condition of the state's infrastructure, the ways IDOT can and does maximize its spending, and their options for investing in infrastructure improvements. It was a good opening meeting.
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You can review the legislation I am tracking at the links below. We have passed the bill introduction deadline, so if you see any legislation with which you have concerns, please let me know. I have included the summary of each bill in these reports.