It's All About the Money

We're coming up on the final two weeks of the spring session and it sounds like lawmakers aren't much closer to agreeing on a budget for next year. Even though it sounds like he hasn't got enough support in the legislature to pass it, Gov. Pat Quinn is sticking to his guns on the proposed income tax hike. He said he still wants to raise the rate by 50 percent and he doesn't want it to be temporary as some have suggested. Although he does sound more willing to compromise on the exemptions he proposed so that they're focused more on low-income taxpayers and homeowners, rather than offering tax breaks across the board.

As far as a capital plan, it's not clear yet how close Democrats and Republicans are to agreeing on how to pay for it, but the four legislative leaders have been meeting regularly. The governor's office has laid out a menu of revenue options to fund a construction program:

• Ending the diversion of money from the state's Road Fund, which is supposed to be used for road construction,
  
• increasing the fees for driver's licenses and license plates,
• increasing the tax on wine and hard liquor (but not beer),
• removing the sales tax exemption for candy,
  
• removing sales tax discounts for bottled tea and coffee drinks, as well as "medicated" health and beauty products,
• and allowing for the sale of lottery tickets over the Internet and bringing in a private firm to manage the Lottery and market it to new players.

None of those options is set in stone and some of them were included in the governor's original capital budget proposal. Legalizing video poker might also be on the table soon. A measure to legalize video poker in Illinois (House Bill 4239) has been approved in the House Executive Committee and supporters estimate it could generate $200 million to $300 million per year. Quinn says he's keeping an open mind about the proposal, though he's not "excited" about it. But at this point, with little more than two weeks before the scheduled end of the spring session, Quinn might have to take what he can get if lawmakers agree to a funding source for construction.

Some lawmakers want to go a lot farther than that to expand gambling in Illinois and raise money for the state. Sen. Terry Link (D-Waukegan) is pushing a major gambling expansion bill that would create three new casino licenses and expand the size of existing casinos (Senate Bill 744). The measure calls for a 4,000-position casino in Chicago and a pair of 2,000-position casinos in Rockford and Park City in Lake County. The nine current casinos and the planned 10th casino in Des Plaines would be allowed to expand from 1,200 gaming positions to 2,000.

The bill would also allow casinos to team up with horse race tracks to place between 350 and 1,000 slot machines at each track. The casinos would have to compete to place the slots at tracks and then split the profits with track owners. The bill is still in committee while lawmakers, casino owners and track owners hammer out details of how profit sharing would work. Right now, tracks would get 30 percent, but track owners aren't happy with that and say casino owners would have too much leeway in determining how much "profit" the slots would generate.

Link says the proposal would generate about $500 million in new revenue for the state. But the measure has little chance of passing. House Speaker Mike Madigan has already said he's not willing to consider casino expansion this session and he doesn't usually take such a definitive stand on an issue and then change his mind a few weeks later.

Chicago Area Senators Want More Money For Roads

Several senators from the Chicago area say the region deserves a bigger share of the state's road funds and they're pointing to a recent Legislative Research Unit report as proof northeastern Illinois doesn't get enough money. State Sen. Martin Sandoval (D-Cicero) requested the study comparing population vehicle miles traveled, miles of roadway, amounts of gasoline sold and other factors in Cook County and the collar counties compared to Downstate.

Sandoval said the study validates his argument that the state's traditional formula for distributing road funds is flawed and shortchanges the Chicago area. The formula calls for 55 percent of highway money to go to Downstate regions and the remaining 45 percent to go to northeastern Illinois. But the study found that for the past decade, the Chicago area has not received its 45 percent share from the road fund and, in many years, got less than 40 percent.

Sandoval says the 55-45 split should be reversed. He points to findings in the study that 63 percent of the state's population lives in the Chicago area. The report also found more than half of the vehicles in Illinois are registered in northeastern Illinois and nearly 55 percent of the miles driven in Illinois are on Chicago area roads.

The study also reveals that about half of the 6 billion gallons of motor fuel sold in Illinois last year were sold in the Chicago area. State and local gas taxes along with bonding and federal funding pay for roadway spending.

But downstate lawmakers have long opposed efforts to switch the 55-45 split to favor the Chicago region. State Sen. John Sullivan (D-Rushville) said the LRU study leaves out the highway funds that come from bonding and federal funds. He said when those funds are added to road fund money, the Chicago region receives an average of 45 percent of all state highway dollars between 2002 and 2008, meeting the state's formula. Sullivan also pointed out that only 18 percent of the roads in Illinois are located in the Chciago area, which means 82 percent are located Downstate. He added that, although Chicago and the collar counties are the state's economic engine and serve as a major transportation hub, the Chicago area depends on good roads Downstate to get goods, supplies and people to and from the region.

A Little Late to the Party?

Last month, I mentioned that advocates for substance abuse programs were asking lawmakers to increase the state's alcohol tax by a nickel a drink. Well, either it took them a few weeks to convince a lawmaker to introduce an actual bill or Rep. Sara Feigenholtz (D-Chicago) likes to be fashionably late to budget talks. She held a news conference this morning to announce she was introducing the nickel-a-drink tax hike. (Her proposal is separate from the liquor tax hike being floated to help pay for construction.) She says she wants it included in the final budget plan and claims it would generate $254 million for the state. But a majority of the funding would be earmarked for substance abuse and mental health treatment programs. Only about $22 million would be made available to the state's general revenue funds. Asked why she didn't bring this forward weeks ago, Feigenholtz essentially said that now is the best time to bring revenue proposals to the table because budget negotiations don't begin in earnest until the end of the spring session. That's certainly true, though it's also nothing new for lawmakers to come up with tax hike plans to fund pet projects late in budget talks. Most years, they don't stand a chance, but with the state facing a $12 billion deficit, it will be interesting to see if this gains some traction.