One Down, Two To Go

When Gov. Pat Quinn took office, he said he had three priorities for the spring legislative session: passing a balanced budget, creating jobs through a major capital construction bill and passing significant ethics reforms. With lawmakers about to begin the last week of the spring session before the May 31 budget deadline, they're one for three. The House and Senate approved a $28 billion capital plan this week. As expected, it depends on a combination of tax hikes, fee increases and an expansion of gambling to fund new construction for roads, bridges, mass transit and other projects. Taxpayers will be paying more in taxes for alcohol, candy, sweetened tea and coffee drinks and "medicated" hygiene projects. Motorists will have to pay more for their license plates and drivers licenses.

On the gaming side, the state will eventually turn over management of the Lottery to a private company, which will also be responsible for marketing the Lottery to new players. Video gambling -- poker, blackjack and other games on arcade-style machines -- was already legal in Illinois, but only for entertainment purposes. Playing for cash winnings was illegal, though quite common -- in an under-the-table fashion -- at bars, clubs, restaurants, veterans' halls and other sites. Officials estimate there are as many as 65,000 video gambling machines in the state. The capital plan would allow for at least 45,000 video gambling machines that offer payouts.

Opponents say that amounts to a massive expansion of gambling and have said it will essentially allow small casinos in nearly every neighborhood of the state. Some equate electronic gambling to "the crack cocaine of gambling." But with lawmakers desperate to approve the state's first capital plan in a decade, video poker shot to the top of the list of revenue options. The measure allows local governments to opt out of legalized video gambling if they want, but I doubt too many municipalities or counties will decide against video gambling if their neighbors allow it.

The state would tax video gambling at a rate of 25 to 30 percent. Supporters estimate it would generate from $300 million to $750 million a year for the state. Some of that revenue would be shared with local governments. Gov. Pat Quinn has said video poker isn't his first choice to fund a capital bill, but he doesn't plan to block that part of the legislation.

However, he said Friday that he won't sign the capital bill until lawmakers address his other two priorities for the spring: the budget and ethics reform. It will be interesting to see how adamant he is about that statement. So far, there doesn't seem to be nearly enough support for an income tax hike to help plug the state's $12 billion budget hole. That was pretty clear from the beginning, but in the two-and-a-half months since Quinn unveiled his budget plan, lawmakers have made little, if any, progress towards an alternative budget plan. It's not clear what they plan to do. But at this point, nothing would surprise me. They might pass just enough of a budget to cover the first six to nine months of the fiscal year and then take up the budget again this fall during veto session. Or they might do the same thing they did last year: send the governor a budget that's out of balance and tell him to make the cuts needed to balance it. The governor has made it clear he doesn't want a "temporary" budget and I wouldn't think he'd be any happier about getting a budget that's out of whack. He's made it pretty clear he wants a balanced budget. So the big question is will he stick to his guns and force lawmakers to come back for a special session if they don't send him a balanced budget to cover all of FY2010, or will he take what he gets. He's made such a big deal out of the capital plan and the state is in such desperate need of jobs, it would be a huge risk to veto the capital plan or let it sit on his desk all summer until lawmakers reach a budget deal.

One story that got pretty much got buried this week was the Illinois Department of Transportation unveiling its annual "road plan." It's an infrastructure construction plan that's entirely separate from the big capital bill. Although the plan is sold as a five- or six-year plan for roads, bridges and mass transit across the state, IDOT unveils a new plan every year, often with entirely different priorities than the year before. Sometimes projects that were announced one year are scrapped the next. For the past couple years, though the state has been taking a "fix it first" approach. It's no different this year.

The biggest funding source for the road plan is the state's motor fuel tax. Because of the crappy economy and because gas prices have been so high the past few years -- especially in summer -- drivers are buying less gas. And because the motor fuel tax is on a per-gallon basis, rather than a percentage of what you pay, that means revenue from the motor fuel tax hasn't gone up much and, in some cases, has fallen off in recent years. That hasn't left the state with much money to build new roads or bridges, so they've had to focus on basic maintenance. So it's a good thing for the state's highway and mass transit systems that the capital plan is pretty much a done deal. (Seriously, even if lawmakers pull a fast one on the budget or ethics reform, I can't see Governor Quinn letting the capital plan fail; way too many jobs are at stake. The unemployment rate is way too high. Labor unions would turn on him faster than you can blink and he's already made it clear he's running for governor in 2010. There's no way he wins if all the unions line up against him, especially if Lisa Madigan enters the race.)

As far as ethics, he hasn't said precisely what it will take to satisfy him. Sure, he's said he wants lawmakers to vote up or down on all six of the reform areas supported by his hand-picked Illinois Reform Commission: campaign finance, transparency, purchasing rules, expanded enforcement of government corruption, government structure (redistricting, term limits, etc.) and "inspiring better government" (personnel rules, whistleblower protections, etc.).

So far, lawmakers are resisting or, at the very least, trying to water down all of those areas. The Reform Commission wants campaign contribution limits that are identical to the federal level ($2,400 per person, per election). Senate Democrats are pushing a far more lenient set of campaign contribution caps -- $5,000 per person per year. If you do the math, the Senate Dems' proposal would have caps that are two to four times higher than the Reform Commission's. For example, under the Senate Democrats plan, I could donate $20,000 to Lisa Madigan's campaign fund every campaign cycle since the term for governor is four years. Under the Reform Commission's plan, I could give only $4,800 ($2,400 towards the primary election and another $2,400 towards the general election). For two year terms (state representatives run every two years; state senate seats have two four-year terms and one two-year term every decade), the limits under the Senate Democratic plan are about double those under the Reform Commission plan.

Considering most lawmakers rarely, if ever, get contributions over $1,000, quite frankly neither proposal sounds like it would have much of an impact on legislative races. It might have a bigger impact on races for constitutional offices, especially governor and attorney general. The big difference that I see in the two plans is that the Reform Commission would limit how much money legislative leaders could transfer from their own campaign warchests to other candidates in their party. The Senate Democratic proposal would not. That's a big deal in highly contested races. The legislative leaders often send hundreds of thousands of dollars to candidates in swing districts to protect vulnerable seats or win new ones.

Honestly, I can understand both sides of the argument. Should the leaders have that much influence on races in other districts? Maybe not. But if both sides are dumping big amounts of cash into swing districts, you could make the argument they probably cancel each other out and just make an already competitive race more expensive. But if lawmakers are going to approve contribution limits of any kind, I tend to agree with the Reform Commission; if $2,400 per individual donor is enough for candidates for Congress and President, it should be good enough for the General Assembly and constitutional offices. After all, Barack Obama had no problem shattering fundraising records last year with the federal limits.