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RYAN, LEADERS REACH AGREEMENT ON ILLINOIS FIRST FUNDING

Press Release - Tuesday, May 18, 1999

SPRINGFIELD -- Governor George H. Ryan and the four legislative leaders have reached an agreement on a funding mechanism for Ryan's "Illinois FIRST" proposal that will allow the $12 billion, five-year public works initiative to move forward.

The compromise agreement keeps intact the basic revenue sources outlined by Ryan on May 4 -- vehicle registration fees, title transfer fees and liquor taxes. The new agreement alters the emphasis placed on these funding sources.

The agreement still must meet the approval of legislators in both the House and Senate, but Ryan said he is confident that lawmakers will find the new funding mechanism as a reasonable approach to meeting the state's critical infrastructure needs.

"Over the course of the last week, I have maintained an on-going exchange with President Philip, Speaker Madigan, Leader Jones and Leader Daniels about 'Illinois FIRST,'" Ryan said. "I want to commend the four leaders for recognizing the critical need to repair the state's infrastructure, and for having the courage to support a program that will make the necessary repairs."

"Our discussions have focused primarily on the new revenues needed to fund a $12 billion, five-year program, the governor added. "Together, we have heard from Illinois' residents about the need for this program -- as well as concerns about potential funding sources."

"As I have said from the beginning, I want to work with the legislature to make the program a reality," Ryan said. "The revised financing program answers the questions raised about 'Illinois FIRST,' is fair to taxpayers and can support a $12 billion, five-year program."

The leaders of the four legislative caucuses voiced their support for the agreement.

"I commend Governor Ryan for taking the lead and proposing a comprehensive program to improve the roads, transit system and schools in Illinois," said Senate President James "Pate" Philip (R-Wood Dale). "Together, we've reached a good compromise agreement. With continued support of the General Assembly, critical road and bridge projects can get underway, aging and overcrowded schools can get additional relief and our communities will be able to afford infrastructure projects that affect the quality of life of every Illinois citizen."

"I support "Illinois FIRST" because it means many vital school, transit and road improvements can get underway across the state," said House Speaker Michael J. Madigan (D-Chicago). "Governor Ryan should be commended for helping working families in every region of the state without cutting essential state services."

"I am very pleased that the Senate Democrats were able to protect senior citizens on limited incomes in this plan and helped reach a compromise on license and registration fees," said Senate Democratic Leader Emil Jones, Jr. (D-Chicago). "This is an agreement that is good for our school children and good for economic development throughout the state. I applaud the Governor for his leadership and his continuing commitment to working with all legislators to secure this program for the future of Illinois."

"Illinois deserves to keep its first-class reputation as a great place to live, learn and work," said House Republican Leader Lee A. Daniels (R-Elmhurst). "We simply cannot afford to have a crumbling infrastructure affect the future health of our economy. Illinois FIRST will help assure that Illinois will be able to attract and maintain businesses, offer high-quality schools, and meet the needs of generations to come."

Under the agreement:

  • Total new revenues generated by increased fees total $573 million; not $621 million as previously proposed. This $48 million reduction in new revenues can be accomplished by reducing the annual diversion of Road Funds money for non-highway purposes. In this plan, $48 million a year in Road Funds previously used for non-highway purposes will be dedicated for Illinois FIRST projects. In February, Ryan proposed that $20 million in Road Funds used for non-highway purposes be returned to the Road Funds. The new total will be $48.

  • Vehicle registration fees would increase from $48 annually to $78 annually, with corresponding increases for all vehicle registrations, generating $249 million in new revenue annually. The $78 fee would be less than half of the $180 national average and less than half of the $163 Midwestern average. The increase in the vehicle registration fee would cost the owner of a car 8 cents-a-day. The previously proposed increase would have raised the annual fee to $96.

  • Large truck and trailer registrations would increase 25 percent -- generating $78 million annually. For a 50,000-pound truck, the annual fee would change from $1,228 to $1,535. For an 80,000-pound truck, the annual fee would change from $2,232 to $2,790. The changes would raise these fees moderately above the national average of $1,295 for a 50,000-pound truck and $2,503 for an 80,000-pound truck. The previous increase was 15 percent.

  • Title transfer fees would increase from $13 to $65 -- generating $166 million annually. The previous proposal was $50.

  • Alcohol taxes will be increased slightly above the national average -- generating $80 million annually. Under the agreement, the state tax on a six-pack of beer would increase by 6 cents, from 4 cents-a-six-pack to 10 cents; the state tax on low-alcohol content wine would increase 10 cents from 5 cents-a bottle to 15 cents; and the state tax on high-alcohol content wine would increase 3 cents from 12 cents-a-bottle to 15 cents. The state tax on a bottle of distilled spirits would increase 50 cents, from 40 cents-per-bottle to 90 cents.

  • Senior citizens who are a part of the circuit breaker program for vehicle registrations would be "held harmless" and will still pay the current registration rates -- at a cost of $1 million. Under this provision, seniors qualifying for the circuit breaker would continue to pay $24 annually for a basic automobile registration.

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