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July 8, 2008

Concerns Surrounding Solvency of Federal Highway Trust Fund Signals New Urgency for Illinois Works Capital Bill

SPRINGFIELD – Illinois Works Coalition Co-Chairs J. Dennis Hastert, former Speaker of the United States House of Representatives, and Glenn Poshard, former Southern Illinois Congressman and current President of Southern Illinois University, urged the General Assembly to heed recent warnings from federal lawmakers concerning the solvency of the Highway Trust Fund. They stressed that further delays in passage of a comprehensive capital bill could jeopardize nearly $9 billion in federal funds dedicated to infrastructure projects in the state.
Over the past two weeks, several members of Congress have warned about the accelerated depletion of the federal Highway Trust Fund, which contains matching funds for statewide infrastructure enhancements. Due to the recent decrease in federal gas tax revenues, current projections estimate that the fund will empty in 2009 with a $1-3 billion deficit.
At an April 2 Surface Transportation Hearing, Congressman John Olver, Chairman of the House Appropriations Transportation, Housing and Urban Development Subcommittee said, “…the most immediate challenge the Congress will face is the solvency of the Highway Trust Fund. The Highway Trust fund will go broke in fiscal year 2009 and the future viability of federal transportation financing is in doubt.”
In addition, U.S. Department of Transportation Secretary Mary Peters recently announced the decline of nearly 20 billion miles traveled by Americans this year stating that, “As Americans drive less, the federal Highway Trust Fund receives less revenue from gasoline and diesel sales.”
Illinois’ congressional delegation worked to gain nearly $9 billion in funds in 2005 with the passage of the federal transportation bill.
While other states are taking steps to formally secure their matching funds, Illinois has not yet passed legislation that appropriates the state dollars necessary to guarantee the federal funds. Illinois Works, a $34 billion infrastructure improvement bill, allows for the acquisition of these federal funds. This bi-partisan capital program overwhelmingly passed in the Illinois State Senate in late May. However, leadership in this House used procedural maneuvers to kill the negotiated capital plan before it could be voted on by the full House.
“The signals being voiced in Washington need to be heard in Springfield. Nearly $9 billion is on table and those funds are much needed to repair Illinois’ infrastructure,” said Hastert. “We can’t leave those funds, and the 700,000 jobs Illinois Works creates and retains, on the table. If we don’t pass this bill now, Illinois taxpayers will simply lose the money they’ve paid into the trust fund. That’s just wrong.  We need to pass a capital bill now.”
“Three years ago, our congressional delegation worked as a team and secured a big win for our state. It’s now time for the Illinois General Assembly to step up to the plate and finish the job. We need to secure our place in line now, while the federal resources are available,” Poshard added.
Earlier this year, Governor Rod R. Blagojevich appointed Speaker Hastert and President Poshard as co-chairs of the Illinois Works Coalition. The duo focused on crafting and passing an infrastructure and jobs bill in a bi-partisan effort that would address pressing capital needs that have built up since the last public works plan was passed nine years ago. The co-chairs facilitated regular meetings with the Governor and four legislative caucuses to draft a capital plan that could be acceptable to all participants.
The Illinois Works capital plan passed by the Senate includes the following:
–        Invest $34 billion in transportation, education, energy, health care, environmental and water, economic development and other critical infrastructure and quality of life needs for the citizens of Illinois.
–        Provide a capital improvement plan clearly identifying timelines, priorities and funding sources for projects within each of these investment categories.
–        Fund education construction projects and mass transportation investments with $7 billion from a partial lottery concession.
–        Create Capital and Educational Trust Funds with “lockbox” accountability guarantees for capital investments and continuation of the current level of lottery proceeds for P-12 education.
–        Expand gaming (Chicago Casino, one additional riverboat license, increases in positions at existing riverboats, and availability of electronic gaming at racetracks) to raise $600 million annually in new revenues for debt service for environmental and water, energy, economic development, state facilities, and other critical purposes.
According to a capital program study by Southern Illinois University, a comprehensive capital plan would have tremendous economic benefits for the state.  The study found a capital plan would create and retain over 700,000 jobs, lead to $80 billion in direct, indirect, and induced economic output activity and more than $3.4 billion in state and local tax revenues.


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