Illinois governor eyes $41.5 billion plan
to rebuild state's infrastructure
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[May 18, 2019]
By Karen Pierog
CHICAGO (Reuters) - Illinois would spend
$41.5 billion over six years to rebuild roads, bridges, schools and
other facilities that have fallen into "dire shape," under a preliminary
plan floated by Governor J.B. Pritzker on Friday.
The Democratic governor's plan, which was distributed to lawmakers and
seen by Reuters, would be funded in part with $17.8 billion of bonds
even as Illinois pays the biggest yield penalty among states to sell
debt.
A huge $133.5 billion unfunded pension liability and chronic structural
budget deficits have helped push Illinois' credit ratings down to a
notch or two above the junk level.
Other funding sources in the draft plan include about $7 billion in cash
and $10 billion in federal money.
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Illinois would raise about $1.78 billion annually for the plan by
increasing state taxes on motor fuel, nonresidential real estate
transfers and liquor, and hiking vehicle registration fees. The plan
also calls for taxing ride shares, garage parking, and cable, satellite,
and streaming services for the first time by the state.
Jordan Abudayyeh, Pritzker's spokeswoman, said the administration is
working on a preliminary draft of a comprehensive capital plan that
included input from Democratic and Republican lawmakers and that would
"finally fix our crumbling infrastructure."
"The administration looks forward to continuing to engaging in
productive conversations before the proposal is finalized," she said in
a statement.
State Senator Martin Sandoval, the Senate Democrats' point person on
infrastructure, said Pritzker's plan has been eagerly awaited.
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Travelers are stuck in a traffic jam as people hit the road before
the busy Thanksgiving Day weekend in Chicago, Illinois, U.S.,
November 21, 2017. REUTERS/Kamil Krzaczynski/File Photo
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Steve Brown, a spokesman for Democratic House Speaker Michael
Madigan, said the plan is "a good step forward."
Meanwhile, the Democrat-controlled legislature, which is in the
final two weeks of its spring session, has a full plate of issues,
including a spending plan for the fiscal year that begins on July 1.
Pritzker's $39 billion proposed fiscal 2020 budget includes about
$370 million in new money if lawmakers legalize recreational
marijuana and sports betting.
The governor also wants lawmakers to place a constitutional
amendment on the November 2020 ballot to replace Illinois' flat
income tax with graduated rates - a key component of his long-term
fix for the state's sagging finances.
On Friday, Illinois' 10-year bond yield was 3.22 percent, well above
California's 1.74 percent yield and New York State's 1.69 percent
yield, according to Municipal Market Data.
(Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis)
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