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State Government

Capitol Recap: $45 billion infrastructure bill becomes law with new taxes to pay for it

Other bills signed, new state laws take effect

Gov. J.B. Pritzker has signed several bills aside from the more publicized ones he has been promoting, such as the capital infrastructure plan he is pictured signing.
Gov. J.B. Pritzker has signed several bills aside from the more publicized ones he has been promoting, such as the capital infrastructure plan he is pictured signing.

SPRINGFIELD — Democratic Gov. J.B. Pritzker made several stops this week on a statewide promotional tour for a $45 billion capital infrastructure plan he signed into law in Springfield on Friday, June 28.

During stops in Walker’s Bluff, Champaign, Rockford, Waukegan and other impacted cities, Pritzker said the six-year capital plan could create 540,000 jobs while investing in roads, bridges, railways, universities, early childhood centers, a state crime lab and veterans homes, among others.

House Bill 62, the infrastructure plan dubbed “Rebuild Illinois,” allocates $33.2 billion for transportation, including $11 billion for the Illinois Department of Transportation’s multi-year plan and $14 billion for other road and bridge projects. It also includes $4.7 billion for mass transit, $1 billion for passenger rail and millions for ports, aeronautics and other projects.

Higher education will see $2.9 billion in infrastructure spending while K-12 and early childhood education will see a combined $526 million.

Pritzker said all of Illinois will benefit from the plan as he defended a portion that dedicates about $6 million to each Democratic state senator for projects in their districts, compared to $3 million for each Republican senator. Democrats and Republicans in the House would each see about half those amounts respectively. 

“The fact is that a majority of the funding in the infrastructure bill goes to downstate Illinois,” Pritzker said.

Pritzker also touted a statewide expansion of broadband internet infrastructure which will receive $420 million in funding.

The plan additionally allocates $4.4 billion to deferred maintenance at state facilities and $1 billion on environment and conservation projects for hazardous waste, sewer and park projects among others. Health care and human services will see $465 million in funding for affordable housing, hospitals, health centers and other grant programs.

Another $1.8 billion is allocated to various “community and economic development” projects such as education and scientific facilities and projects in economically depressed areas. Another $50 million provided by the funding bill will be set aside for bicycle path projects.

Mark Denzler, president of the Illinois Manufacturer’s Association, touted career and technical education measures such as a pre-apprenticeship program that will receive $25 million in funding to “help address the skills gap and workforce challenges facing manufacturers across Illinois.”

Revenues for the capital plan come from a pair of bills — Senate Bills 690 and 1939 — one raising the motor fuel tax and transportation-related vehicle fees, the other enacting a massive expansion of gambling in the state.  

The gaming bill — which allows for six new casinos, expansion of gambling at racetracks, added video gaming machines, higher taxes and maximum bets on video gaming machines and the legalization of sports gambling — is expected to generate at least $350 million annually at full implementation and will support vertical capital debt service.

* * *

NEW TAXES: The first wave of tax increases that will pay for the state’s $45 billion capital infrastructure plan took effect Monday, July 1.

Motor fuel, cigarettes and e-cigarettes became more expensive after Gov. J.B. Pritzker signed Senate Bills 1939 and 690.

The most direct tax for consumers is the 19-cent increase to the motor fuel tax which will help fund $33 billion in spending on transportation projects such as road and bridge repairs and public transit.

The motor fuel tax on regular gasoline and diesel fuel both increased to 38 cents, up from the current 19 cents. In addition, though, people who buy diesel fuel pay an additional tax, "for the privilege of operating motor vehicles which use diesel fuel." That additional fee rose to 7.5 cents, up from the current 2.5 cents, bringing the total tax on diesel fuel to 45.5 cents per gallon.

Going forward, the motor fuel tax will increase annually by the consumer price index, which is usually close to 2 percent, but would be capped at a 1 cent per-year increase.

The gas tax increase and $45 billion infrastructure plan drew bipartisan support in both houses, including from Republican state Rep. Margo McDermed of Mokena. 

“The capital plan does contain additional sources of revenue, but it is necessary long-term sustainable funding that will help us avoid the peaks and valleys of intermittent funding, which leads to starts and stops on projects our communities are counting on,” McDermed said in a news release. “Further, people who drive on our roads every day are paying for it, they just don't realize it.”

The motor fuel tax increase is expected to bring in about $1.3 billion in added infrastructure funding, while other fee increases for licenses and registrations will not take effect until Jan. 1.

Also starting July 1, the tax on a pack of cigarettes increased to $2.98, up from $1.98, while a separate state law would prevent anybody under the age of 21 from purchasing cigarettes. The tax increase is expected to generate about $159 million in revenue for the next fiscal year, all of which would go to the capital infrastructure plan.

Senate Bill 690, which laid out a massive statewide gambling expansion, included the cigarette tax language and also defined electronic cigarettes such as e-cigars, vapes and hookahs as “tobacco products.” This allowed the state to charge a 15 percent wholesale tax on these products beginning July 1.

* * *

OTHER BILLS SIGNED: While Democratic Gov. J.B. Pritzker has been touring the state to promote his signing of capital infrastructure and marijuana legalization legislation, several other bills he signed have received less public attention.

House Bill 2028, which passed the state Senate and House unanimously, became law last week. It doubles the death benefits for families of law enforcement officers and firefighters killed in the line of duty. They are now eligible for $20,000, up from $10,000.

“While no amount of money can ease the terrible grief of families who have lost their loved ones because they were killed in the line of duty, I hope we can at least lessen the financial burden of an immeasurable loss of our state’s finest,” Pritzker said in a statement.

HUMAN TRAFFICKING MEASURES: Senate Bill 1890 is aimed at cracking down on human trafficking by requiring hotels and motels to train employees in the recognition of human trafficking and protocols for reporting the activity to the appropriate authority.

The measure also codifies penalties for any company that, “knowingly benefits, financially or by receiving anything of value, from participation in a venture that has engaged in an act of involuntary servitude or involuntary sexual servitude of a minor.”

A company can be fined up to $100,000 for engaging in this activity, while a person would be charged with a Class 1 Felony. 

TRAFFIC STOP DATA: A program for collecting data about traffic stops, initially sponsored by former President Barack Obama when he was still serving in the Illinois Senate, was put on the books permanently with Pritzker’s signature of House Bill 1613.

Pritzker’s office said in a release the data collection law, which was set to expire this year, “is an important tool for police officers and the public to identify and combat racial disparities in law enforcement.”

The new law also creates a task force to study how the data collected can best be used to address racial disparities in traffic stops.

The task force will be comprised of police representatives, the director of the American Civil Liberties Union of Illinois or a designee, six representatives of various police unions, five representatives of community organizations, one professor that specializes in racial equity and works at an Illinois university, and two academics or researchers with backgrounds studying traffic stop data. 

The task force must report to the governor and General Assembly by March 1, 2022, and every three years thereafter.

CREDIT CARD DEBT TASK FORCE: Last week, the governor also signed House Bill 1581 to create the College Student Credit Card Marketing and Debt Task Force.

Representatives from Southern Illinois University, the University of Illinois, Illinois State University, Eastern Illinois University, the attorney general’s office and statewide organizations representing credit unions, community banks and banks will make up the task force.

The eight-member group will seek to reduce the amount of credit card debt students face after graduating from higher education institutions in Illinois and will work with the Illinois Department of Financial and Professional Regulation.

A report of findings is due to the General Assembly by Dec. 14, 2019.

ONLINE LOTTO: House Bill 3661 gave the Illinois Lottery expanded authority to sell various game tickets on its online platform. The bill allows for the online sale of Lotto, Lucky Day Lotto, Mega Millions, Powerball, Pick 3, Pick 4 and other draw games offered at retail locations.

* * *

CITIZENSHIP CENSUS QUESTION: Amid national uncertainty about whether a citizenship question will be included on the 2020 U.S. Census, advocates in Illinois are not changing their approach to ensuring all residents are counted.

“Whether a citizenship question is on the form or not, the damage is done,” said Anita Banerji, director of the Democracy Initiative of the nonprofit organization Forefront. “So you still have to be very intentional and make sure the communities feel safe and protected to self-report.”

Banerji’s comments came one day after U.S. Commerce Secretary Wilbur Ross said his department will send the 2020 U.S. census to print without including a citizenship question, but just hours after President Donald Trump vowed to continue to fight the matter.

“The News Reports about the Department of Commerce dropping its quest to put the Citizenship Question on the Census is incorrect or, to state it differently, FAKE!” Trump tweeted Wednesday morning. “We are absolutely moving forward, as we must, because of the importance of the answer to this question.”

By Wednesday afternoon, national news outlets were reporting the administration had reversed course and would seek to include the citizenship question.

Regardless, Banerji said, the mission of Forefront’s Democracy Initiative and other complete count advocates remains unchanged.

Last month, Democratic Gov. J.B. Pritzker signed an executive order aimed at ensuring an accurate count in the 2020 census and touted a $29 million line item for census outreach in this year’s budget.

The stakes of an undercount, Pritzker said, include the loss of up to two congressional seats and $120 million in federal funding annually for each 1 percent of the population that is undercounted.

* * *

BOND DEBT LEGAL CHALLENGE: State officials in Illinois reacted with scorn on Monday, July 1 to a legal filing in Sangamon County that challenges the constitutionality of two sets of bonds the state issued in 2003 and 2017 totaling $14.3 billion.

The complaint, by Illinois Policy Institute CEO John Tillman and the New York-based investment firm Warlander Asset Management, led by its founder and chief investment officer Eric Cole, seeks a court order blocking the state from paying off those bonds. It alleges that both bond issuances violate the Illinois Constitution’s limits on state borrowing authority.

A spokeswoman for Gov. J.B. Pritzker called the filing “not worth the paper it’s written on,” while Illinois Treasurer Michael Frerichs called it a “political stunt,” and Comptroller Susana Mendoza dubbed it a “ridiculous-on-its-face filing.”

The complaint was filed Monday in Sangamon County Circuit Court in two parts. The first is a petition by Tillman seeking permission to sue the state, something required under Illinois law; the second is a complaint by both Tillman and Warlander Asset Management, which holds about $25 million worth of other outstanding Illinois bonds.

The suit names Pritzker, Mendoza and Frerichs as defendants.

The complaint is based on Article 9, Section 9, of the Illinois Constitution, which gives the state authority to issue bonds “for specific purposes.” That article also places limits on short-term borrowing by the state.

Emily Bittner, Pritzker’s deputy chief of staff for communications said in a statement that, “Several layers of bond counsel and Attorney General Lisa Madigan were required to sign off on bond offerings, and these met those standards.”

The Illinois Policy Institute is a nonprofit think tank that advocates for free-market policies, limited government and expansion of charter schools. Tillman, its CEO, has been an outspoken critic of the state’s financial policies for years, and for a time was a strong supporter of former Republican Gov. Bruce Rauner.

Asked whether he intends to launch a similar challenge against the next round of state bonds, Tillman said in an email the lawsuit has nothing to do with the new fiscal year’s budget.

Mendoza suggested that the lawsuit is a deliberate attempt to scare capital markets and drive up interest rates that the state will pay.

“This is an extension of John Tillman’s and former Governor Bruce Rauner’s fantasy of pushing Illinois into bankruptcy so they could crush unions in Illinois,” she said in a statement.

* * *

ABORTION PARENTAL NOTIFICATION: State Sen. Elgie Sims, of Chicago, and Rep. Emanuel “Chris” Welch, of Hillside, both Democrats, are leading the push to repeal a law mandating those under 18 consult their parents two days before getting an abortion procedure.

Proponents call the Parental Notification of Abortion Act a barrier to health care. Opponents warn striking it from statute would remove needed protections for minors.

“I think that it’s the right thing to do and so certainly, this is a fight that I’m in because it’s a fundamental issue and I want to continue that fight,” Welch said. “I’m going to try to get this repeal bill done in veto session if we can. If not, I’m certainly going to go back at it in January (when session begins again).”

Veto session is the last week of October and the second week of November. It is unclear if the support exists in the General Assembly to give backers of the repeal effort a legislative victory.

Currently, an abortion provider is mandated to communicate with the minor’s adult family member or guardian 48 hours prior to the procedure and must document that conversation occurred. Under the law, it is not enough for the minor to have a conversation with the family member.

Alternatively, the adult family member can sign a waiver attesting he or she is aware the minor is having an abortion; the parent can accompany the minor to the procedure; the physician can perform an abortion if there is a medical emergency; or the minor can disclose in writing she is a victim of sexual assault by an adult family member.

Additionally, the Parental Notification of Abortion Act provides an option for minors to ask a judge for permission to get an abortion. That process, as outlined in the law, is designed to maintain the minor’s privacy.

Those arguing the Parental Notification of Abortion Act should remain on the books say the law offers “fundamental” protections for minors that the General Assembly sought to enshrine when passing it in 1995.

* * *

MARIJUANA AND PETS: With legalization of adult-use marijuana set to begin Jan. 1 in Illinois, the American Veterinary Medical Association is warning residents of the dangers marijuana ingestion can cause their pets.

“We've seen a marked increase in any state that has legalized marijuana, where there's been a huge spike in the amount of cases of animals coming into veterinary hospitals, clearly under the effects of marijuana,” said Dr. John de Jong, president of the AVMA.

De Jong said THC, the psychoactive substance in marijuana, is toxic to dogs. The AVMA said an animal’s ingestion of THC can cause vomiting, incoordination, depression, sleepiness or excitation, low blood pressure, low body temperature and seizures.

Edible products, which will become legal in Illinois Jan. 1 as well, serve a particular risk. That’s because they are often mixed with other products such as chocolate or other complex sugars which are also poisonous to dogs.

De Jong said he was not aware of any immediate deaths of animals caused by marijuana ingestion, but the toxicity of THC to dogs could cause serious damage.

De Jong said the process of treating a pet for marijuana consumption is “supportive care,” although more intensive medical intervention can sometimes be necessary.

If a pet does show signs of marijuana toxicity – such as rigidness, nervousness, poor balance, seizures, drooling or dribbling urine – de Jong said a veterinarian should be contacted as quickly as possible.

De Jong said smoking in the same room as a pet could be dangerous as well, although the evidence of ambient smoke affecting pets is more anecdotal. The AVMA said marijuana smokers should do so away from pets, and any edibles should be kept secure and inaccessible to pets.

* * *

HIGHER EDUCATION 'HOPEFUL': The interim director of the Illinois Board of Higher Education is hopeful a combination of added infrastructure and operations funding for state universities and colleges will help entice Illinois students to remain in the state for their college education.

The cause of the optimism is state budget action which provided $154 million in new operations funding and $3.2 billion in new or reappropriated infrastructure funding to higher education.

“Obviously, the universities are very happy. This will help take both the fiscal pressure off of them and help the universities and community colleges look more attractive,” said Nyle Robinson, interim IBHE executive director.

Earlier this year, the IBHE reported that 48.4 percent of Illinois public high school graduates that enrolled in a four-year institution in 2017 chose an out-of-state school.

Robinson said an increase of $50 million to Monetary Award Program grants for low-income students would be particularly helpful in making college more affordable. The MAP grant program receives $451.3 million in funding in the budget, the largest single-year appropriation that program has ever received. 

AIM High grants, which provide merit-based scholarships for Illinois students, will see $10 million in added funding, bringing the total funding to $35 million.

Higher education will receive $3.2 billion from the state's $45 billion capital infrastructure plan to pay for 72 projects at four-year institutions and 91 at community colleges.

In capital funds, the University of Illinois system will receive $815 million, Southern Illinois $295 million, Western Illinois $222 million, Illinois State $195 million, Eastern Illinois $147 million, Northern Illinois $140 million, Northeastern Illinois $132 million, Chicago State University $119 million and Governors State $33 million. Community colleges will see $744 million in capital funding, while private colleges and universities will see a total of $400 million.

In overall operations funding, community colleges, colleges and universities will see increases of about 5 percent. Robinson said this could help universities stave off tuition increases.

* * *

MIXED BAG FOR BUSINESSES: Representatives of some of the state’s largest business associations are looking back at a historic legislative session as a “mixed bag” for businesses, which will see benefits from late legislative action.   

Rob Karr, president of the Illinois Retail Merchants Association, said a $15 minimum wage hike by 2025, a $1 per-pack increase to the cigarette tax and a 19-cent increase to the motor fuel tax would hurt businesses in general and small retailer convenient stores in particular.

The wins, according to Karr and representatives of the Illinois Chamber of Commerce and Illinois Manufacturers Association, include a phased-in repeal of the state’s franchise tax, added tax incentives for data centers and large-scale construction projects, protection of a retailer’s tax credit and a streamlining of a manufacturer’s purchase credit.

The franchise tax is administered by the secretary of state and it charges businesses “for the privilege of exercising its authority to transact such business in this State.” Illinois Chamber of Commerce President Todd Maisch said the tax could cost a business up to $2 million in one year.

The repeal will be phased in over a five year period. According to the secretary of state’s office, the state collected $198 million via the tax in 2018.

For IMA president Mark Denzler, the “modernization” of the manufacturer’s purchase credit was one of the big wins of the session. He described the credit as a sales tax exemption for consumable products such as coolant, solvent, fuels and oils which are used in manufacturing.

Another pair of reforms will help attract large-scale data centers to the state, Maisch said. The measure provides tax incentives for new and existing data centers that invest more than $250 million in construction and electronic hardware infrastructure costs and hire at least 20 full-time employees over a five-year period. 

Maisch said the benefits of the data center act are compounded by the Blue Collar Jobs Act, another reform passed at the end of the legislative session that offsets some portion of labor costs of large-scale industrial projects.

For Karr and IRMA, another win was maintaining a tax credit that allows retailers to keep 1.75 percent of the sales tax they collect and a pair of provisions to require remote retailers such as Amazon to collect state sales taxes on any purchase delivered to an Illinois address.

Karr and Maisch both agreed, however, big businesses benefited more from the various reforms than smaller ones.

“Really the problem with the end of the session is that small businesses did not get their fair share of relief. And so we'll be calling on the governor to make small business a priority for next year,” Maisch said.

For Maisch, that means “re-examining” the minimum wage increase, possibly by creating a permanent regional tax credit for businesses to get greater relief in counties where $15 hourly is a more burdensome expense.

* * *

NEW LAWS: Starting Monday, July 1, it became illegal in Illinois for anyone to sell or provide tobacco cigarettes or other tobacco products to people under age 21.

The so-called “Tobacco 21” bill, House Bill 345, which Gov. J.B. Pritzker signed into law April 8, is one of several new laws that took effect on July 1, the start of the new state fiscal year.

It prohibits anyone from selling or providing cigarettes, electronic cigarettes or any other “alternative” tobacco product to a person under age 21.

Illinois lawmakers passed 599 bills during the spring 2019 session. Of those, as of last week, only 27 had been signed into law.

The Illinois Constitution provides that the governor has 60 days from the day he receives a bill from the General Assembly to either sign or veto it. Many of the 599 bills passed this session have not yet been delivered to the governor’s office.

Also starting July 1, a new law took effect that will have an impact on public school students, although most of them won’t notice it until school resumes in the fall. Senate Bill 28 reinstates the “five clock-hour” rule, which requires a “school day” to include at least five clock hours of instruction.

That had been the law for many years in Illinois, but it was inadvertently omitted when lawmakers overhauled the state school funding system, creating the evidence-based funding formula in 2017

Many of the bills Gov. Pritzker has signed have already gone into effect because the bills contained immediate effective dates.

For example, mayors can now perform marriages in Illinois. That was enacted in House Bill 2841, which also extends the same authority to presidents of cities, villages and incorporated towns. Pritzker signed that new law June 14.

Many local governments lost some authority, however, on April 19. That was the day Pritzker signed Senate Bill 2988, which strips townships of the authority to regulate the placement of wind farms outside of an incorporated city’s zoning area. That bill came in response to a dispute in Douglas County, in eastern Illinois, where two townships sought to block development of a large-scale wind farm.

Capitol News Illinois is a nonprofit news service operated by the Illinois Press Foundation that provides coverage of state government to newspapers throughout Illinois. The mission of Capitol News Illinois is to provide credible and unbiased coverage of state government to the more than 400 daily and weekly newspapers that are members of the Illinois Press Association.

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