CHICAGO — The Illinois General Assembly during a special session Wednesday approved an $18 billion fiscal 2012 capital bill, reauthorizing spending for billions of dollars in projects now underway or in the works, and putting to rest concerns over a threatened suspension issued by Gov. Pat Quinn earlier this month.
Quinn had warned of an imminent shutdown of projects after lawmakers adjourned their regular session last month without reauthorizing a capital bill for fiscal 2012, which begins July 1. Lawmakers approved a $33.2 billion operating budget but left the capital bill, re-appropriating spending for already-approved projects, on the table in a dispute between the House and Senate over $430 million in added spending.
The Senate approved the extra spending, but the House did not take up the additions before adjourning. Democrats control both chambers. Lawmakers returned to the capitol on Wednesday and easily passed SB 2414 after the Senate dropped the extra funds.
“Today’s session was about jobs and capital, and I thank the legislative leaders and members of the General Assembly for passing a 12-month capital appropriations bill as I had asked of them,” Quinn said in a statement. “A capital construction program was one of the first priorities of my administration, and it is a key component of my plan to bring jobs and economic recovery to Illinois.”
Projects are included in a long-term $31 billion capital budget but annual spending requires an appropriation. Debt issuance is authorized separately and payment of debt service is an ongoing appropriation.
Without a spending appropriation in place, the Illinois Department of Transportation could not accept or disburse local, state, and federal funds for $16.6 billion worth of pending projects. The suspension would have forced a freeze on $652 million of new projects and engineering contracts totaling $500 million, according to the governor.
The Capital Development Board would have had to suspend $1.7 billion worth of projects. More than 170 clean water and wastewater improvements projects would be halted. Some of the projects that would have been affected include a new Mississippi River bridge near St. Louis, high-speed rail construction, bridge projects in Chicago, and new facilities at state universities.
The state is tentatively planning on the sale of $2 billion to $3 billion of general obligation bonds in fiscal 2012 to support projects in the $31 billion program but the timing, size, and structure of the sales depend on several factors.
“We have to look at our cash on hand and the timing of our needs,” said Illinois debt manager John Sinsheimer. 'We are also still waiting for the resolution of the Wirtz case”
Wirtz Beverage Illinois LLC filed a lawsuit in August 2009 shortly after Quinn signed the $31 billion capital program into law, alleging it violated the state constitution’s single-subject clause and unfairly favored one class of liquor by imposing a higher tax on spirits and wine than beer. The appellate court earlier this year struck down the capital package and its funding mechanisms, ruling that they violated the single-subject clause.
The Illinois attorney general’s office and lawyers for Wirtz recently argued the case before the state Supreme Court. If the court affirms the appellate ruling, the General Assembly would need to pass new legislation that addresses the legal issues.
The state intends to launch this summer a request for qualifications process to establish a new list of qualified broker-dealers, financial advisers, and legal counsel for future transactions.
Lawmakers on Wednesday also approved a measure allowing for the transfer of $365 million from the general fund to a health care provider fund to pay down Medicaid bills before July 1, when a special federal reimbursement rate of 57% drops back down to 50%. The state must repay the funds by July 15. The move will help Illinois capture between $90 million and $100 million in additional federal funds, said the measure’s sponsor, Sen. Jeffrey Schoenberg, D-Evanston.
