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 that Illinois 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.