Friday, February 04, 2011

Ruling could mean bumpy road for construction plans

By Jamey Dunn

An appellate court ruling that found the legislation that creates the state’s capital construction plan unconstitutional could send lawmakers scrambling to approve a new capital plan and bring future state borrowing under added scrutiny.

The Illinois Supreme Court granted the state's request that the effects of the lower courts ruling be put on hold until the higher court makes a decision. So, for now, all the projects and increased taxes and licensing fees used to pay for the borrowing are on hold.

If the Supreme Court agrees with the appellate ruling that the bill violated the Illinois Constitution's “single subject” rule, which requires that one piece of legislation can cover only one topic, lawmakers will have to pass the components of the capital plan in separate bills.

While some legislators have said the solution will be as easy as breaking up the components into separate bills and passing them, experts agree that finding the needed support could be challenging in a new legislature with a new political climate. “You can’t go back and recreate the moment,” said Kent Redfield an emeritus professor at the University of Illinois Springfield. “I don’t think it’s a done deal.”

David Yepsen, director of the Paul Simon Public Policy Institute, said new Republican lawmakers in both chambers could present a problem to those who want to see a similar plan passed again. “Even though this is a capital bill … you still are going to ask people to vote on video poker, which is controversial, [and] to raise liquor taxes. Any kind of revenue thing is more difficult in the environment.”

He added that the recent income tax increase could be a factor because it has focused public attention — and frustration — on taxes.

“Some of those Republicans [who supported the bill when it passed] are no longer in the legislature. … We’ve had a 2010 election in which the Tea Party movement has dominated the Republican Party. The Republican Party is solidly anti-tax. I don’t think any Republican … in the legislature would find it very easy to vote for any tax increase right now.”

Redfield said Republicans considering the primary elections they face next year — when they could be running from different legislative districts after the state finishes redistricting, with new challengers from their own party — might be hesitant to vote for higher taxes or the controversial video poker expansion.

He added that because video poker expansion has still not been implemented and many municipalities have opted out of having the machines, some legislators might not be inclined to vote for it this time around. “Video poker kind of got less attractive after it was passed.”

Yepsen predicted that the Supreme Court will reject the appellate court’s opinion, which he said came as a surprise. He said the court's granting the states request for a hold may indicate how the court will rule. “If they were really upset about it, why did they put a hold on it? Why did they grant this stay?”

Yepsen and Redfield both think that legislators would likely have to find some new revenue sources if the plan is tossed out. Redfield said that lawmakers do not have a lot of options, and the final plan would likely be a combination of increased sales taxes, fees and some form of gaming expansion.

Yepsen said no matter how the Supreme Court rules, any Illinois plan that involves borrowing will come under some added scrutiny in the future. “It could cause some heartburn when the state wants to borrow.”

He said borrowers—and their lawyers want a sense of certainty and to be sure that legislation is drafted in a legal way. “These are important things to get right because you are going to go borrow money for this.”

This means the proposed plan to borrow $8.75 billion to pay down the state's backlog of bills, as well as other borrowing proposals, could be the subject of added scrutiny in the coming months of legislative session.

Redfield and Yepsen agreed that the bill did not contain any so-called logrolling — putting one issue in a bill to attract votes for another. But Yepsen said this scenario would probably make legislators more cautious when drafting bills, at least in the near future. “This is likely to give the jitters at least for a few years.”

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