Gov. Rod Blagojevich stood with business and labor leaders late last week to promote his economic stimulus package, which includes a partially bond-financed $25 billion capital budget and tax breaks for families and businesses.
“It’s been nine years since we’ve had a complete and comprehensive capital plan and it is time to approve a new one. We need to fix our worsening roads and repair our deteriorating schools,” Tom Villanova, president of the Chicago and Cook County Building and Construction Trades Council, said at a news conference. “The governor’s new plan will invest in our weakening infrastructure and offer thousands of new jobs in construction across the state. Legislators need to act on this plan immediately.”
The governor said projects proposed in the capital budget would generate more than 700,000 jobs.
“The business tax cut, household rebates, and capital bill will provide an important boost to bolster business investment and job creation as our country lies on the brink of recession,” said Chicagoland Chamber of Commerce president Jerry Roper.
The proposals were included in the $58 billion budget for fiscal 2009 Blagojevich unveiled last week. Illinois would issue $1.2 billion of tobacco bonds, $16 billion of pension bonds, and $3.8 billion of general obligation debt for capital projects under the budget proposal.
The package would provide a one-time tax credit of $300 per child for all state taxpayers who qualify for the federal stimulus package. In a third measure, qualified businesses would receive a 20% tax cut on their corporate income tax bills.
The tobacco bond proceeds would cover the one-time expense of the family and business tax breaks. The capital budget would be financed with the $3.8 billion of GOs, $7 billion from a proposed partial privatization of the Illinois Lottery, and local and federal matching funds.
The capital budget — dubbed Illinois Works — would provide $4.9 billion for K-8 and higher education, $14.4 billion for roads and bridges, $2.7 billion for transit, $1.1 billion for energy and environmental projects, $1 billion for economic development projects, $600 million for state facilities, and $500 million for airports and rail.
Meanwhile, two members of Congress were critical of the capital budget and warned last week that it jeopardizes available matching federal funds for transit. U.S. Reps. Melissa Bean, a Democrat, and Mark Kirk, a Republican, warned the state could lose $4 billion if more funds for transit are not included in the capital spending plan.
