Are local matching Transit Capital Funds (like the Red Line Ext.) involved in
this mess??
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http://www.suntimes.com/3506114-417/story.html
Court strikes down state's $31 billion capital program
BY DAVE MCKINNEY Sun-Times Springfield Bureau Chief
dmckinney@... Jan 26, 2011 10:02PM
SPRINGFIELD — In a stunning blow to Gov. Quinn's administration, an Illinois
appeals court Wednesday tossed out the $31 billion construction program passed
in 2009 that has been a centerpiece of his job-creation efforts.
In so doing, the three-member appeals panel also invalidated video poker,
partial state lottery privatization, higher liquor and sales taxes and other
revenues that add up to $1.1 billion, money that was designed to support massive
borrowing for the bricks-and-mortar program.
Quinn vowed an immediate appeal to the Illinois Supreme Court.
Reversing a lower court's decision, the appeals court ruled unanimously that the
General Assembly's passage of the tax and fee hikes that underwrote the
construction program violated the single-subject clause of the state
Constitution. That clause says a bill can only deal with one specific issue, not
a multitude of them.
The law in question "began as a five-page bill addressing the narrow subject of
amending the Illinois estate and generation-skipping transfer tax. As enacted on
July 13, 2009, [it] grew to 280 pages covering a variety of subjects," wrote
Justice Patrick J. Quinn, who is not related to the governor.
Within that sprawling package were the legalization of video poker, a partial
privatization of the lottery, a boost in sales tax on candy, soft drinks and
grooming products, an increase in taxes on wine, beer and hard liquor, and a
hike in vehicle registration fees. It also contained a requirement that the
University of Illinois conduct a study on the effect on families that purchase
lottery tickets.
"In the present case, not all of the provisions of [the law] have a natural and
logical connection to the single subject of revenue to the state. For example,
we discern no natural and logical connection between the subject of revenue and
the amendment to the University of Illinois Act to require the university to
conduct a study on the effect on Illinois families of members of the family
purchasing Illinois lottery tickets," Justice Quinn wrote.
The lawsuit upon which the court ruled was brought by Chicago Blackhawks owner
Rocky Wirtz and his family's liquor distributorship, Wirtz Beverage Illinois
LLC. Wirtz also is an investor in the Sun-Times Media Group.
"This lawsuit was always about how the Legislature passed this bill and the
discriminatory tax on wine and spirits. The decision affirms that, and we are
gratified by it," Wirtz spokeswoman Julia M. Sznewajs said.
Officials in Attorney General Lisa Madigan's office said lawyers would file a
motion to stall the ruling on Thursday.
"The administration intends to appeal the Appellate Court's decision and to seek
an immediate stay from the Illinois Supreme Court," the governor's office said
in a prepared statement.
"The Illinois Jobs Now! capital program is an important part of Gov. Quinn's
plan to put Illinois back to work. Capital bill projects are putting thousands
of people to work in every corner of the state, while supporting local
businesses, improving our infrastructure and increasing energy efficiency," the
statement said.
"While the administration's request for a stay is pending with the Illinois
Supreme Court, capital projects already in progress will continue as scheduled.
We would expect the Supreme Court to rule on the request for a stay in the very
near future," the statement said.
So far, the state has borrowed $2.2 billion in construction funds that are
linked to the threatened tax and fee hikes. The state has collected $425 million
from the increases. If Wednesday's ruling stands and the original money
generators don't get re-enacted, bond holders would have to be paid with dollars
from the state's deficit-riddled General Revenue Fund that now covers state
government's day-to-day operations, said Kelly Kraft, a spokeswoman for Quinn's
budget office.
If Wednesday's decision is not overturned, Gov. Quinn will face an unexpectedly
difficult and financially uncertain spring legislative session that many
observers had expected to be relatively tame. Now, after passage of the
politically unpopular income-tax hike, he could be faced with scaling back the
construction plan or persuading re-enactment of the stricken tax and fee
increases, borrowing and video poker that has been rejected by dozens of
communities.
"For those who supported this most recent tax increase and then went home and
heard from their constituents, what will your reaction be to another vote on fee
and tax increases, which were part of the original capital proposal?" said Sen.
Matt Murphy (R-Palatine), who said it is not a certainty that Republicans in a
new Legislature will agree to the same framework as before on a construction
package. "We're in a different time."
The prospect of having to go back to the Legislature and win backing again for
billions of dollars in construction borrowing is further complicated by Gov.
Quinn's push for a separate $8.75 billion borrowing package he had intended to
seek this spring to whittle down the state's backlog of unpaid bills.
"You'd like to think at a certain point we'd collectively achieve borrowing
fatigue. I know I'm there personally," Murphy said. "This is just a sticky
wicket."