Week in Review for June 28, 2019

Gov. Pritzker Signs Historic Bipartisan $45 Billion Rebuild Illinois Capital Plan. By Fixing Crumbling Roads and Bridges, Plan Will Support and Create an Estimated 540,000 Jobs in Every Corner of the State.

Surrounded by lawmakers of both parties and representatives from the business community and labor movement, Governor JB Pritzker signed Rebuild Illinois into law, the most robust capital plan in Illinois history and the first in nearly a decade.
The historic plan was passed with vast bipartisan supermajorities and will make $45 billion worth of investments in roads, bridges, railways, universities, early childhood centers and state facilities like the crime lab and veterans’ homes over the next six years, creating and supporting an estimated 540,000 jobs over the life of the plan and revitalizing local economies across the state.

“With this historic $45 billion capital plan, we’re fixing decades-long problems, creating good jobs, improving communities for the next generation – and doing it together, across party lines,” said Gov. JB Pritzker. “The Rebuild Illinois plan transforms our state’s approach to transportation infrastructure, finally treating our roads, bridges, and railways like 21st century investments and not relics of the past. We’re also making critical investments in our higher education institutions, our crime lab and veterans’ homes, early childhood centers, and expanding broadband access to communities across Illinois. With these investments, we’re creating and supporting hundreds of thousands of new jobs in our state. This is more than an infrastructure plan. This is a job creation plan the likes of which our state has never seen.”

“One of the most important things we can do for the future of Illinois is to maintain our place as America's transportation center,” said Rep. Margo McDermed, the House Republicans’ capital point person. “This capital bill ensures we remain a vital hub in the nation's network of highways and bridges by injecting much-needed resources to bring Illinois' infrastructure into the 21st century.”

The Rebuild Illinois package consists of four bills: HB 62, appropriations for capital projects; SB 1939, revenue for horizontal construction; HB 142, bond authorization; SB 690, gaming expansion, including revenue for vertical construction.

House Bill 62Rebuild Illinois makes critical investments in infrastructure across the following areas, many of which will be subject to a rigorous process for determining projects and providing grants:

Transportation: $33.2 billion
  • Over $14 billion for new roads in bridges: 
    • $10.4 billion for state roads and bridges
    • $3.9 billion for local governments to rebuild their roads and bridges
    • Nearly $11 billion for IDOT’s Multi-Year Plan for roads and bridges
  • $4.7 billion for mass transit, including the RTA (CTA, Metra and Pace)
  • $1 billion for passenger rail, including Amtrak and other inter-city rail projects 
  • $558 million for aeronautics
  • $492 million for the Chicago Region Environmental and Transportation Efficiency Program (CREATE)
  • $312 million for grade crossing protection
  • $150 million for ports
  • $679 million for other transportation projects

Education: $3.5 billion
  • $2.9 billion for higher education, including deferred maintenance and new projects at public universities, private universities and community colleges
  • $415 million for pre K-12 school maintenance
  • $111 million for early childhood education
State Facilities: $4.4 billion
  • $4 billion for deferred maintenance and new projects at state facilities, such as the decrepit state crime lab
  • $350 million for the State Capitol

Environment/Conservation: $1 billion
  • $867 million for environmental, conservation and recreation projects, including: 
    • $290 million for hazardous waste
    • $110 million for water revolving fund
    • $100 million for unsewered communities
    • $92 million for ecosystem restoration
    • $75 million for park and recreational facility construction
    • $40 million for well plugging
    • $35 million for land acquisition
    • $31 million for flood mitigation
    • $29 million for Illinois green infrastructure grants
    • $23 million for Open Space Land Acquisition and Development
    • $22 million for dam and waterway projects
    • $20 million for conservation reserve enhancement
  • $140 million for renewable energy projects, including solar and energy efficiency upgrades at state facilities and transportation electrification in low-income communities

Broadband Deployment: $420 million
  • $400 million for statewide broadband expansion
  • $20 million for Illinois Century Network

Healthcare and Human Services: $465 million
  • $200 million for affordable housing
  • $200 million for hospital and healthcare transformation
  • $50 million for community health centers
  • $15 million for human services grant program

Economic and Community Development: $1.8 billion
  • $594 million for community development
  • $425 million for economic development
  • $401 million for public infrastructure
  • $112 million for education and scientific facilities
  • $75 million for economically depressed areas
  • $51 million for museums
  • $50 million for libraries
  • $50 million for emerging technology enterprises
  • $50 million for the arts
  • $25 million for an apprenticeship program
  • $15 million for Minority Owned Business Program

Senate Bill 1939 provides revenues to fund the horizontal projects in the Rebuild Illinois capital plan.
  • Increases the motor fuel tax, which is sent to lockbox that exclusively funds critical transportation projects across the state:
    • Raises the motor fuel tax per gallon from 19 cents to 38 cents on July 1, 2019 and indexes it to the Consumer Price Index. If the motor fuel tax had been indexed to inflation the last time it was raised, it would be 38 cents – another indication of Illinois’ long failure to invest in needed maintenance of roads and bridges.
    • Increases the special fuels tax (on diesel fuel, liquefied natural gas, or propane) by 5 cents per gallon. The current tax is 2.5 cents per gallon, in addition to the regular motor fuel tax. This increase will generate $78 million in new annual state revenue, which is dedicated to the Road Fund.
    • Creates the Transportation Renewal Fund to receive the increased motor fuel taxes.
    • The revenue realized from the 19-cent increase in the motor fuel tax in SB1939 will be split between three purposes: 48 percent will go to the State Construction Account Fund for use on state roads and bridges, 32 percent will go to units of local government through the motor fuel tax formula, and 20 percent will go to local transit districts. 
    • Allows Cook County municipalities to impose an additional 3 cent local motor fuel tax.
    • Allows Lake and Will counties the same authority as DuPage, Kane and McHenry counties to impose a county motor fuel tax to be between 4 cents and 8 cents and indexes it to CPI.
This increase will result in an additional $400 million per year to local governments (municipalities and local road districts) for local roads and bridges, $250 million to transit districts, and $590 million to the state in FY20.

Title fees: Increases the title registration fee from $95 to $150 for regular title fees and $95 to $250 for mobile homes. Decreases the duplicate title fee from $95 to $50. Increases the salvage certificate fee from $4 to $20. Creates a new title fee for junk vehicles at $10. These increases are effective July 1, 2019 and will generate $146 million in new annual state revenue.

Vehicle registration fees: Increases the annual vehicle registration fee from $101 to $151 beginning with 2021 registrations and the electric vehicle registration fee from $34 every other year to match the registration fee for regular vehicles, plus $100 per year in lieu of motor fuel tax payment, effective January 1, 2020. Increases truck registration fees by $50 for vehicles 8,000 pounds and under and $100 for vehicles 8,001 pounds and over. Combined, these increases will result in $529 million in new annual state revenue.

Commercial distribution fee: Repeals the commercial distribution fee on July 1, 2020.

Sales tax shift: Beginning in FY22, one-fifth of the net 5% state sales tax on motor fuel purchases will shift per year from deposit into the General Funds to the Road Fund, with the full amount deposited into the Road Fund by FY26. This will result in $600 million annually at full implementation (shift of revenue only, not an increase).

Pedestrian and bicycle facilities: Sets aside $50 million in funding for pedestrian and bicycle facilities and the conversion of abandoned railroad corridors to trails.

Transportation Funding Protection Act: Creates this act, which requires local governments to use transportation revenues and fees for transportation purposes only.

House Bill 142 provides $22.6 billion in additional bonding authority, which will allow the state to fund much needed improvements in infrastructure in every region of the state. HB 142 increases that authority to $60.8 billion.

HB 142 creates the Multi-modal Transportation Bond Fund, Transportation Renewal Fund, Regional Transportation Authority Capital Improvement Fund, Downstate Mass Transportation Capital Improvement Fund, and Rebuild Illinois Projects Fund.

Gaming expansion will lead to thousands of new jobs in communities across Illinois and greater economic opportunity for Chicago and northern, central and southern Illinois. It will provide the state and local governments with hundreds of millions of dollars in new revenue that will be dedicated to critical investments in infrastructure across the state, including affordable housing, hospitals, universities, and state facilities.

Through gaming expansion, Illinois will join 14 other states in legalizing sports betting while expanding other new opportunities for gaming, including the authorization of six new casinos that will create thousands of construction jobs and full-time, permanent jobs for Illinoisans and encourage project labor agreements. Gaming expansion will ensure Illinois remains competitive among Midwest states.

Senate Bill 690 legalizes sports wagering, expands gaming, and provides for the vertical revenues in the Rebuild Illinois Capital plan.

Legalization of sports wagering: Illinois is joining 14 other states, including Indiana and Iowa, in legalizing sports betting, allowing all casinos, racetracks, and sports venues that hold 17,000 people or more a brick-and-mortar license to operate a sportsbook. All licensees will be allowed to go online immediately upon being licensed by the Illinois Gaming Board. For the first 18 months after the first licensee is operating, all accounts must be set up at a licensed gaming facility. Within 540 days of the first license being awarded, the Gaming Board can accept applications for one of three online sports wagering operator licenses. Official league data will be allowed, betting on Illinois college teams will be banned, and a lottery sports wagering pilot program will be created. SB 690 also imposes a 15% tax on adjusted sports wagering receipts for each month, with an additional 2% tax for wagers in Cook County.

The Illinois Lottery will be granted a master license that will allow lottery sports betting terminals in 2,500 retail locations in the first year and 2,500 in the second year across the state. This license is for 4 years and must be competitively selected.

Sports betting is estimated to generate approximately $58-102 million annually, which will be dedicated to much-needed infrastructure projects across the state, including universities, affordable housing, and hospitals.

Authorization of licenses for land-based casinos: SB 690 authorizes licenses for six new casinos – in Chicago, Waukegan, Rockford, the South Suburbs, Williamson County (Walker’s Bluff), and Danville – and authorizes revenue-sharing with local municipalities. New casinos will be allowed up to 2,000 positions immediately, except for Walker’s Bluff, which is capped at 1,200, and the City of Chicago, which will be allowed up to 4,000 positions, including slots at Midway and O’Hare Airports. Horse tracks will be allowed 1,200 positions, and Fairmount 900 positions. Each of these casinos will be privately owned, and the Illinois Gaming Board will have oversight. SB 690 also implements a new tax structure for table games.

Casinos will create thousands of construction jobs and full-time, permanent jobs, including an estimated 4,000 jobs in Chicago, over 1,500 in Rockford, nearly 2,000 in Walker’s Bluff, and 1,000 in Danville.

Expansion of video gaming terminals (VGTs): This proposal protects small businesses and enables the state and local municipalities to gain much-needed capital revenue by raising the VGT tax by 3 percentage points, from 30% to 33%, in the first year and to 34% in the second year and beyond. The legislation also allows establishments to have up to six video gaming terminals, increases the maximum wager from $2 to $4, elevates the maximum cash award from $500 to $1,199, and authorizes an in-location progressive jackpot up to $10,000. Video gaming will be allowed on the Fairgrounds only during the Illinois State Fair and will be capped at 50 machines.

Expansion of gambling at horse tracks: SB 690 provides needed support to the Illinois horse racing industry, which will create jobs and keep the industry competitive. Fairmount will be able to increase their live racing dates to 100, up from 40.

Ethics: SB 690 makes administrative changes to the Illinois Gaming Board and Racing Board, including strengthening the ethics laws on members of the General Assembly, state employees, and members of the Gaming and Racing Boards, implementing a surcharge on the exchange of any gaming or racing licenses until 2027, and sourcing any non-resident gaming or racing winnings to Illinois if they are required to notify the IRS.

Parking garages: Introduces a 6% tax on daily and hourly garage parking and a 9% tax on monthly and annual garage parking. Parking garages are not currently taxed at the state level. This tax will generate $60 million in new annual state revenue.

Traded-in property exemption: Introduces a $10,000 cap per trade-in transaction on first division vehicles. Currently, traded-in property provides a sales tax exemption on the purchase of property up to the value of the property traded in. This cap will generate $40 million in new annual state revenue. Raises the documentary fee from $150 to $300 and indexes it to CPI, which may be imposed on buyers for the handling of closing documents of a sale of a motor vehicle.

Cigarettes: SB690 increases the per-pack cigarette tax by $1, from $1.98 to $2.98, effective July 1, 2019. This increase will generate $160 million in new annual state revenue.

Casino Gaming, Video Gaming, and Sports Wagering: Ongoing revenues from the gaming expansions included in SB 690 are estimated to total at least $350 million annually at full implementation and will support expected vertical capital debt service. Upfront revenues from license fees are scheduled to support pay-go capital costs.

Sales tax parity: SB690 includes mechanisms to increase compliance for "remote" online retailers collecting state sales tax beginning July 1, 2020. Annual estimates for increased state sales tax collections are $200 million.

Data Centers: SB 690 allows an exemption from sales and electricity taxes for data centers that have or plan to make a $250 million investment in Illinois. If a data center is seeking an exemption for the construction or rehabilitation of its structure, the data center must require all contractors and subcontractors to comply with the responsible bidder sections of the Illinois Procurement Code. SB 690 also creates 20% income tax credit against wages if the investment by the data center is in an underserved area. The bill requires an annual report to the Governor and the General Assembly on the tax credit’s outcome and effectiveness.

Capital diversity provisions: SB 690 creates the Illinois Works Jobs Program Act, which includes the Illinois Works Preapprenticeship Program and the Illinois Works Apprenticeship Initiative.

Gov. Pritzker signs law legalizing the recreational use of marijuana in Illinois. On Tuesday, Governor Pritzker signed House Bill 1438 into law, which will legalize the adult use of cannabis in Illinois beginning January 1, 2020.

House Bill 1438 creates the Cannabis Regulation and Tax Act. It allows for the recreational use of cannabis by individuals over the age of 21. Illinois citizens may possess up to 30 grams of cannabis and out of state individuals may possess up to 15 grams. Medical cannabis patients may grow up to 5 plants in their residence.

It expunges arrest records for possession of cannabis up to 30 grams. For individuals who have convictions for possession of up to 30 grams, the Governor will pardon those individuals and the Attorney General will file a petition to expunge. For those individuals convicted of possession between 30-500 grams, they may file a motion to vacate or expunge their records.

HB 1438 also creates the Recovery, Reinvest, and Renew (R3) grant program, which will invest in communities hit by economic disinvestment and violence. 25% of revenue generated by the Act will go to the R3 program.

It allows for additional dispensaries (in addition to medical cannabis dispensaries) and cultivators, and adds licenses for craft growers, infusers, and transportation organizations. Local governments may reasonably zone where craft growers and dispensaries may be placed. Local governments may opt out of having cannabis-related businesses within their borders.

Taxation on cannabis: 7% on cultivators, 10-25% on purchase of cannabis, up to 3% excise tax by municipalities, up to .75% for counties, and up to 3.75% for unincorporated areas.

As more and more states move toward legalizing the use of recreational cannabis, proponents argued that HB 1438 is a reasonable answer to the question how do we tax and regulate this emerging industry. While many are uncomfortable with the concept of legalizing cannabis, the fact is that this is the direction the nation is moving.

This legislation provides for public safety, taxpayer protections, workplace protections, and local control. It contains similar provisions to laws regulating the consumption of alcohol, like a prohibition on driving a car under the influence. It incorporates laws that will deter and punish use by minors – including a zero tolerance policy for those under 21 who drive under the influence of cannabis. Employers are given the strongest policy protections in the nation, allowing for a “drug free” workplace. Local municipalities and counties may opt out at any time and can tax cannabis up to 3.75%.

Opponents pointed out that nothing in this legislation changes the fact that cannabis is still a Schedule 1 Controlled Substance which remains illegal under federal law. They argued that the bill will not raise nearly as much revenue as proponents expect; instead, it will place additional burdens on taxpayer dollars to pay for drug treatment and the negative health effects of chronic marijuana use. Opponents believe that legalizing marijuana is a terrible way to raise money for the State and that it will cause more harm than good.

House Bill 1438 passed the Senate by a vote of 38-17-2 and on May 31, the House concurred with Senate Amendment 2 by a vote of 66-47-2.

U.S. Supreme Court decision adds to pressure for fair maps in Illinois. The decision in the case of Rucho v. Common Cause, handed down on Thursday, June 27 by the nation’s highest court, confirms the arguments of many jurists that federal courts do not have standing to remedy partisan, gerrymandered maps generated by the authorities of the separate states. A gerrymandered map is a map that is drawn to make some peoples’ votes worth less than others, typically by “packing” large numbers of common-minded people in a single district. The Supreme Court’s majority found in Rucho that the federal courts are improper and inadequate forums for the resolution of disputes involving the partisan mapping of voters. It asserted that these disputes are questions to be resolved on the state level.

The Rucho decision did not oppose fair maps. It let stand the constitutions of various states, such as our neighboring state of Iowa, which have enacted constitutional laws to provide for the drawing of fair, non-partisan maps to elect state legislators and members of Congress. Ruchomakes clear that gerrymandering will continue to be a constant feature of Illinois politics until Illinois amends its constitution to provide for fair maps. The laws of states such as California and Iowa show how this can be done. Illinoisans have no other recourse but a state constitutional amendment.

Illinois sheriff’s deputy killed. Deputy Troy Chisum was shot and killed on Tuesday, June 25 in rural Fulton County. The incident in west-central Illinois ended the life of a veteran officer of the Fulton County sheriff’s office. Chisum was also a trained paramedic with his county’s emergency medical response (EMA) team, and had been certified to perform a wide variety of special response challenges and tasks. His watch ended while responding to a battery and disturbance call in Avon.

A statewide monument for law enforcement officers killed in the line of duty stands on the southwest side of the Illinois State Capitol in Springfield. In an annual ceremony, the names of the officers killed during the previous twelve-month period are added to the monument’s granite plinth, and the survivors of the fallen officers are honored. Deputy Chisum is survived by his wife and three daughters.

JOBSStatewide unemployment rate held steady in May 2019 at 4.4%. The Illinois jobless rate continued to post numbers short of the “full employment” platform (unemployment below 4%) enjoyed by many other U.S. states. In addition, there was a slight decline in Illinois’ May 2019 total nonfarm payrolls, with an estimated 2,400 fewer paychecks being made out in May 2019 than the number of workers who had been paid within state lines in April 2019. Weaknesses were concentrated in construction, leisure and hospitality, and financial activities, which lost a total of 4,700 jobs in the late-spring month when compared to April. The Illinois education sector was healthy in May 2019, with a net new 2,100 jobs created during the month.

Joblessness was higher in some parts of Illinois than others, reflecting the continued movement of economic activity to the greater Chicago area, and to centers of Downstate higher education and medical care. A regional table for May 2019 shows especially high jobless rates in metropolitan Rockford (5.2%), and depicts especially low rates in greater Chicago (3.5%), suburban Lake County (3.4%), and in Downstate’s Bloomington (3.3%), Champaign-Urbana (3.4%), and Springfield (3.3%).

Texting-while-driving laws strengthened in Illinois. The new law, which goes into effect on Monday, July 1, focuses on first-time offenders who are cited for driving while operating a handheld mobile device, such as a smart phone. Under the law prior to 2019, this offense could be fined ($75, plus court costs and fees) but was not classified as a moving violation. Starting July 1, the first-time offense of driving while having a phone in one’s hand will be a moving violation that will appear on the motorists’ driving record. The fine will remain $75 for now, but court costs and fees add substantially to this sum. Furthermore, the fine increases upon the second and subsequent offense.

The offense is not committed when drivers use a phone that is wired into the car’s sound system in a hands-free manner. The moving-violation language was contained in HB 4846, enacted in 2018 and signed by former Gov. Rauner. HB 4846 was approved by the Illinois House by a vote of 96-15-0, and became Public Act 100-858.

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