October Edition 2008
Illinois Chamber Infrastructure Council Hosts Congressman Mark Kirk
August 28 at the Union League Club in Chicago, some 50 members of the Chamber’s Infrastructure Council heard from Congressman Kirk about the importance of the Illinois General Assembly to pass a capital plan. The Congressman pointed out how states like Pennsylvania, Florida and Texas are ready and prepared to move on projects. These states will compete with Illinois in the next transportation bill. Illinois performance to date does not bode well for future appropriations.
The meeting also included a presentation by Mike Zahn Chairman of the Illinois Council of Operating Engineers. It was a united front with business, labor and government agencies attending the meeting.
The council’s final meeting in 2008 is scheduled for December 4 in the new conference center at the 311 S. Wacker Building in Chicago.
More Problems for Canadian National Railway Purchase
The U.S. Surface Transportation Board has temporarily halted Canadian National Railway from purchasing the EJ&E Railroad. A final study on the impact of the sale must be released before the purchase. CN had made a request to purchase the line early. CN had asked the board to approve the sale by the end of the year and promised not to increase the number of trains on the EJ&E line until a final environmental impact study was issued. CN wants to acquire the nearly 200 miles of the track so it can move trains more quickly than it does on its current lines that cross Chicago. The towns that encircle that area oppose the $300 million sale mostly because it will worsen traffic congestion and the high cost of improving grade-level crossings.
In its decision, the Board rejected CN’s argument that approving the sale and establishing the full impact of that sale were separate actions, pointing out that the board never approved a sale without a final environmental impact study, when one was required. Should the proposed sale of the EJ&E fail to win approval or fall through for other reasons, obtaining lease rights to use the tracks remains an option according to a CN spokesman. CN has approached U.S. Steel about trackage rights, but both sides are pushing for a sale. Infrastructure improvements and the freedom to design a schedule to improve efficiency on the region’s freight rail system make ownership the preferred avenue for CN.
In another blow, a congressional committee gave approval to rules that would require community impact to be considered by the feds analyzing proposed railroad mergers. The bill calls on the Surface Transportation Board to weigh positive and negative impact a rail merger could have on affected communities. As noted above, the communities surrounding the proposed purchase of the EJ&E sale are opposed.
Feds Say CN Can’t Acquire EJ&E Early
Rail Merger Bill Moves to U.S. House
Transit Woes Span the Country
Illinois is not alone in their troubles with transit funding. Some 85 percent of U.S. transit systems are reporting capacity problems, due mainly to high gas prices according to a new survey conducted by the American Public Transportation Association. 65 percent of the agencies say they don’t have funding for more service. The hefty ridership increases at the Chicago Transit Authority, Metra and Pace are what transit leaders dreamed of in the past. Now, the three agencies don’t have nearly enough trains and buses to handle the crowds. Antiquated rail signaling systems, freight congestion on commuter rail lines and crumbling viaducts require trains to go slower, making for longer travel times as more riders are forced to stand on crowded trains. Without steady state capital funding to address the problems, the transit agencies make do. Instead of providing a more comfortable ride for its customers, the CTA began removing some seats on Brown Line trains to cram more riders aboard. CTA has also announced another $40 million in internal cuts. 54 percent of transit systems said they are allowing crowding beyond local service standards and 39 percent said they are turning away passengers. 28 percent said they don’t have vehicles available to add service and 33 percent said they are delaying or cancelling planned service enhancements.
A report on the condition of America’s 600,000 bridges was also released. One out of every four U.S. bridges needs to be modernized or repaired. The American Association of State Highway & Transportation officials say it could cost $140 billion (in 2006 dollars) to make all needed repairs or upgrades immediately. Among the report’s findings: The top 10 highway interchange bottlenecks cause an average of 1.5 million truck hours of delay each year; the costs of steel, asphalt, concrete, and earthwork have risen by at least 50 percent in the past five years, forcing delays of bridge improvements and replacements; and nearly every state faces funding shortages that prevent them from the kind of ongoing preventive maintenance and replacement needed to keep their bridges sound indefinitely. The report pointed to the need for increased investment in transportation at all levels of government; support for a wide range of revenue options such as tolls, tax increases, annual road user fees, bonds, or private investment; continued commitment to research and innovation; and systemic maintenance to extend the life of bridges. Illinois’ bridges are ranked 6th in the nation in terms of sufficiency but more needs to be done to ensure that they remain safe.
Preserving and Modernizing Our Bridges
New Airport for Chicago?
A new Chicago airport or a vast expansion of one of the city’s existing airports will be necessary to keep pace with booming demand for air travel in the coming decades, according to the Federal Aviation Administration. A new airport would be on top of the ongoing $15 billion expansion at O’Hare. Chicago plays too vital a role as an aviation hub not to further upgrade airport capacity. New York and Atlanta will also need new airports or ambitious expansion projects. More than a dozen new runways have opened in the U.S. since 2000, three more opening this November, including O’Hare. FAA says that this still isn’t enough. Despite a drop in flights this year as high fuel prices cut into airline profits, the number of air travelers could double to 1 billion annually over the next decade. Newer, streamlined planes will carry fewer passengers could increase the total number of planes flying in and out of airports at an even faster rate. There have only been two major airports opening in the last 40 years and that as many as four would have to be built over the next 20 to 30 years to meet demand. New airports and runway expansions would have to happen in conjunction with implementation of a new satellite-guided air traffic system that would replace the current, radar-based system, which deploys 1950s-era radar technology.
FAA Head says Chicago Could Need New Airport
September Edition 2008
Railways in the News
Amtrak finds itself in a precarious situation in Illinois and around the nation: The rail service that once struggled to gain riders is now too short on trains to meet demand. With increasing gas prices, more people are turning to the railways. A record-high ridership is expected to boom further to 50 million riders a year in 10 years. Currently, ridership rests at around 25 million. Amtrak must double its fleet to meet demand. Nationally, 2,750,278 passengers used Amtrak in July, a 14 percent surge from a year ago and the highest ridership for a single month in the service’s history.
Amtrak CEO Alex Kummant met with U.S. Senator Dick Durbin and other Chicago officials to discuss how Amtrak can upgrade its service by adding cars to some lines in Illinois. Amtrak hasn’t added a new passenger car since the mid-1990s; choosing instead to renovate old ones. Durbin has asked Amtrak to send several thousand overhauled cars to Illinois. He has also introduced legislation that aims to revive the train car industry. His proposal seeks authorization for Amtrak to issue up to $2.8 billion in bonds annually.
In other rail new, Canadian National Railway’s attempt to buy the Elgin Joliet & Eastern Railway is picking up an unexpected supporter. U.S. Representative Daniel Lipinski announced that he is backing the controversial sale. Lipinski is the only Chicago area member of the House Transportation Committee and oversees the Surface Transportation Board, which has the final say on CN’s plans to buy the EJ&E from U.S. Steel for $300 million. Also joining the support are suburban mayors who have formed the START-Solutions to Area Rail Traffic-coalition. CN officials have said more than 60 suburbs will see a reduction in trains if the company acquires the 198 miles. About 30 towns will see more trains.
The Surface Transportation Board issued a report that found bridges and other costly solutions may be required at 15 railroad crossings from the northern suburbs to northern Indiana would see huge increases in traffic because of the added trains. Elected officials in some of the towns expecting more traffic have been vocal critics of the deal.
As Ridership Increases, Amtrak Faces Shortage of Cars
Reviving Train-Car Manufacturing in Illinois?
Plan to Sell Railway Picks Up Some Steam
Federal Transportation Bill
Don't miss this opportunity to meet with The Honorable Mark Kirk Representative of the 10th District of Illinois, regarding the Federal Transportation Bill. A question and answer period will provide a forum to ask questions of Representative Kirk. This is an ideal opportunity to develop advocacy plans for a lingering and badly needed Illinois’ capital bill. A capital bill is essential in order to fully tap available federal funding. Mike Zahn, TFIC Co-Chairman and Business Manger Local 965, Chairman Illinois State Operating Engineers will also speak, representing labors’ strong support of a capital bill.Click here for more details.
A Year After Minnesota Bridge Collapse, Little is Being Done
One year after the Minneapolis bridge collapse, little is being done to repair bridges and roads amid a funding crisis threatening more delays and risks to the public, federal and local authorities acknowledge. The problem increases each month due to shrinking gas tax revenues that are needed to shore up ailing bridges. People are driving less and are shifting to more fuel-efficient vehicles to deal with astronomical gas prices at the pumps. In Illinois, thousands of bridges are deficient and desperately needs overhauls to protect against accidents. While ranked 10th in the best in the nation for upkeep, Illinois has more than 4,300 of the almost 26,000 bridges that are considered structurally deficient or functionally obsolete.
The priority of the state is frequent inspections of the worst of the worst bridges. IDOT has imposed weight restrictions on dozens of questionable spans and insists that frequent inspections assure bridges remain safe. The federal Highway Trust Fund, which uses gas-tax collections to pay for a large chunk of road and mass-transit projects, is expected to from an $8 billion balance at the beginning of the current fiscal year to a deficit of $3.1 billion sometime in the next fiscal year, which starts in October. The government warms it may not be able to meet earlier pledges to help states pay for highway projects already started. Road expansion projects to address worsening traffic congestion have been mostly stripped from the Illinois highway program through 2014.
States are losing even more ground due to rising costs of asphalt, steel and other construction materials. According to the American Association of State Highway and Transportation Official, it would cost $140 billion to repair all the bridges. Currently, bridges rated deficient are eligible for federal repair funds. However, such grants are scare and the money is given out under a complicated formula that favors some projects over others based on repair costs rather than on safety risks.
A Year After Bridge Collapse, Little Work is Being Done to Repair Infrastructure
CalPERS to invest in California’s Infrastructure
The California Public Employees’ Retirement System announced it has adopted an infrastructure development policy to guide it as it seeks to invest in ports, energy, water, communications and transportation projects. The board will allocate up to 3 percent of total CalPERS market assets to infrastructure development through 2010 with the goal of achieving an average investment return of 5 percent over the rate of inflation over five years, net of fees. California alone is estimated to have $500 billion in needs for improvement and development of infrastructure, spanning everything from new bridges to new energy sources. Since the projects tend to be on a large scale, the pension fund can benefit from making a huge investment. With more than $234 billion in assets, CalPERS is the nation’s largest public pension fund. It serves more than 1.5 million state and local employees in California with retirement and medical benefits.
August Edition 2008
Increasing Fuel Prices Translate into Big Boost for Amtrak
Despite the headaches the skyrocketing gas prices are causing for the trucking, car and airline industries, the high price at the pump is translating into an economic windfall for one sector of the travel industry. Since the price of gas has surged to over $4 a gallon, Amtrak has seen massive increases in its ridership nationally, climbing an average of 11 percent to nearly 30 percent in some parts of the country since its fiscal year began in October.
Amtrak trains traveling between Chicago and Milwaukee have seen ridership grow by more than 20 percent, with many downstate Amtrak routes boasting similar increases. The increased ridership breathes new life into the national public transportation industry, but it also means Amtrak is facing capacity issues that it has not had to address for some time. Despite having to increase the price of its fares, Amtrak is still seeing most train routes sell out, which means many state and federal officials are now searching for new funding to increase the number of routes and upgrade older trains.
In Illinois, Amtrak’s growing popularity among travelers, however, has not been reciprocated by the governor’s office nor has Governor Blagojevich shown the same level of support for the program as other states’ governors have recently shown. Shortly before the General Assembly returned for a special session earlier in July, the governor’s office issued a threat list of budget cuts that included the elimination of state subsidies to Amtrak for the Chicago-Springfield-St. Louis, Chicago-Carbondale, Chicago-Quincy, and Chicago-Milwaukee lines worth nearly $30 million. The budget cut would have been disastrous for Amtrak service in Illinois, but the governor quickly reneged on his threat after many Illinois’ communities that depend on Amtrak service blasted his office for the proposed cut.
"Amtrak's Midwest ridership steams ahead"
"More riders climbing aboard Amtrak"
"Amtrak's Downeaster posts 28 percent ridership gain"
U.S House Signs Off on Highway Trust Fund Bill; Fund Still Faces Potential Crisis
The U.S. House of Representatives recently voted to approve a short-term fix for the federal highway trust fund that is facing an $8 billion revenue shortfall this year. The legislation, which was approved by a veto-proof majority and now moves to the Senate, is meant to shore up the fund until legislators pass a new five-year transportation funding bill in 2009. Without the additional revenue, states could see federal funds dry up before the start of the next federal fiscal year on October 1st, which could further complicate things for Illinois’ pursuit of a new statewide infrastructure plan.
The federal Highway Trust Fund that was created in 1956 and relies on the federal gas tax of 18.4 cents a gallon, however, is still facing a crisis. The rise in gas prices has not only created major headaches for businesses and consumers, it is also taking its toll on the federal fund as incoming revenues drop as the price of gas increases. Individual states are also seeing similar trends in their highway funds, which means states like Illinois that have failed to keep pace with their infrastructure needs are slowly running out of revenue options to pay for those needs.
Even if the U.S. Senate approves the $8 billion short-term fix to the federal highway trust fund, the fund must still grapple with the issue of spending outpacing incoming revenues. Analysts do not predict the price of gas will fall anytime soon, meaning drivers will continue to avoid the pump and revenues will continue to drop. Some policymakers, both at the federal and state level, have suggested introducing a gas tax holiday to encourage the purchase of gas, but that proposal has not been widely embraced due to its temporary nature and doubts that state and federal revenues would ultimately benefit from the holiday.
"States worry about dwindling road funds"
"Gas prices tax government as highway fund runs short"
Illinois House Introduces Downsized Capital Budget
Despite the hue and cry from businesses, communities, and the Illinois public over the 10-year absence of a new capital budget, legislators and the governor have repeatedly failed to assemble and pass a feasible infrastructure funding package for the state. This year, the Senate hastily assembled a capital funding package, known as Illinois Works, which had ballooned to $34 billion in the final days of the spring session raising concerns among many, including the Chamber, about its overall sustainability. The Senate’s proposal was flatly rejected in the House and it was not until the House returned in mid-July that the proposal was provided with any alternative.
The House introduced its own capital budget in mid-July that represents a fraction of the Senate’s proposal and relies only on existing state revenues to access an additional $1.4 billion in federal dollars for transportation projects. Although the proposal merely scratches at the surface of the total number of state infrastructure needs, it addresses some concerns that these particular federal funds already earmarked in the federal highway bill could disappear if Illinois fails to act.
A House committee approved the measure, but the $1.8 billion capital funding proposal has yet to be voted on by the full House. Both the Senate and the House are scheduled to return in November following the general election and the proposal could see action at that time..
"New capital plan scaled back to $1.8 billion"
Analysis of Midwest Waterway System Shows Economic Importance of Waterway Freight Travel
An analysis recently released by Global Insight- an international forecasting company that provides independent analysis of economic, financial, and industry-related issues- shows that the cost of freight traffic moving along the Mississippi and Illinois Rivers bears a significantly lower cost than freight traveling by rail or highway. Global Insight evaluated barge traffic along those rivers during the months of October and December 2005 to determine the overall cost of moving freight along the inland waterway system represents about one-fourth the cost of moving that same freight by rail and less than one-tenth the cost of moving it by highway.
The goal of the analysis was also to show the damaging economic impact a disruption to this travel would cause. Failure of any portion of the lock system critical to travel along the nation’s inland waterway system would translate into huge costs for businesses that depend on barge shipping. The Midwest saw some of this impact as flooding along these rivers caused major damage and closure of many of the critical travel routes, but advocates have long argued that the U.S. lock and dam system is in danger of an even greater crisis due to lack of funding made available for basic maintenance and renovation.
"Lock Closures' Prospective Impacts on the Inland Waterway System and the National Economy"
July Edition 2008
Illinois, Midwest Floods Tests Already Weak Infrastructure
It has been 15 years since the Midwest last experienced massive flooding that devastated towns and farmland leaving a long road back to economic recovery. Since that time, however, few lessons have been learned and many of the same dams, bridges, and levees that were considered to be vulnerable last time are the same waterway structures that are unable to withstand the rising floodwaters of this year’s flood. In fact, the U.S. Army Corps of Engineers recently warned that as many as 27 levees along the Mississippi River could fail.
In Illinois, the failure of several dams and levees also underscores another issue: the failure of state legislators to provide a new statewide infrastructure funding plan for nearly a decade now. Legislators were once again unsuccessful at passing a capital budget this spring, which leaves many towns and communities affected by the flooding wondering how they are going to set about rebuilding their already ailing infrastructure after the floodwaters recede. Some experts fear that the overall cost of the flooding could reach the 1993 total cost of clean-up which topped $21 billion. Indiana economists have already predicted the cost of repairing ruined public infrastructure alone will cost that state $45 million.
This year, some Illinois communities, like Madison, St. Clair, and Monroe counties, were forced to take measures into their own hands by calling upon legislators to authorize a quarter of a cent sales tax increase for those areas in order to pay for millions of dollars of levee repairs and upgrades. Those downstate communities, which are now battling a rising Mississippi River, faced imminent federal levee decertification this summer after the Army Corps of Engineers found underground leaks and other structural deficiencies. If decertified, thousands of businesses and residents in those communities would have been subject to skyrocketing flood insurance rates and economic devastation with no federal aid.
"Midwest floods expose aging, weak protection"
"State preparing for flood costs"
Feds: Floods May Bust 27 Levees Along Mississippi River
Midwest Flooding Paralyzes Freight Industry; Threatens Economy
As towns in Illinois, Iowa, Indiana, Missouri, and Wisconsin continue to reel from the floods, freight carriers throughout the nation are also reeling from the effects of the flood. Over 250 miles of the Mississippi River has already been shuttered to shipping traffic and train traffic has also suffered major delays and disruptions as hundreds of miles of rail running between these states have also been shut down. Overall, the floodwaters are taking the regional and national economy to task at a time when it is already battling recession trends.
The river and rail closures not only bear a regional impact, they also create a ripple effect across the entire national shipping industry, as companies that rely on freight transportation have been forced to delay or in some cases, cancel shipments, until further notice. While rail and barge freight have suffered the greatest impact from these closures, the trucking industry is also seeing disruptions as waters also force road closures.
Furthermore, the floodwaters are forcing commodity prices upwards with more crop fields flooding and speculators fearing an extremely weak corn and soybean production this year. Low corn and soy production will not only drive up already inflated grocery store costs, it also has tremendous implications for the ethanol industry, which relies on corn and soy byproducts to produce the alternative fuel. Experts also fear that the flooding will have an impact on the livestock industry, although this impact may not be felt completely until next year when livestock supply is lower due to early slaughter this year.
"Midwest floods cripple shippers"
New Capital Budget Stalls Once Again
Legislators, once again, failed to overcome their differences and pass a state capital budget before ending their spring session on May 31. The capital budget has been a source of political bickering and division for nearly a decade, consistently resulting in lawmakers’ inability to broach an agreement before the end of each legislative session. The past two years, however, have been particularly contentious as Illinois’ infrastructure visibly crumbles and state federal transportation dollars are threatened by what can best be described as a deep distrust of the current Governor.
The level of disagreement and heightened political ill-will among state Democrats, has not only managed to stall a capital budget, but has also led to calls for impeachment, particularly from the Illinois House. The House Speaker, who recently issued a controversial memo outlining “talking points” on the possible impeachment of the Governor, has been blasted by some groups as creating more problems for the capital plan’s already bleak future this year. The Governor, however, has remained insistent that lawmakers pass a capital budget, which means calling legislators back to Springfield for special sessions that could further poison the atmosphere surrounding the capital budget.
The Senate did managed to pass an infrastructure funding package on the final day of the legislative session, but that plan was not without its own controversy. The capital budget, known as Illinois Works, had grown to more than $34 billion that was to be funded by a gaming expansion not widely supported by many, including Chicago Mayor Daley and the horse racing industry. The other source of funding involved a partial lease of the state Lottery to private investors- another controversial proposal of which many legislators questioned as feasible.
“Billions in matching funds could be lost without agreement”
Chicago Sun-Times Editorial: “Impeachment memo won’t fill potholes”
O’Hare Flight Cap Lifted; Obstacles Still Left to Overcome
The Federal Aviation Administration (FAA) recently announced its plan to lift a 2004-imposed flight cap at O’Hare airport this fall, shortly before the airport is expected to open a new runway as part of its $15 billion expansion project. The current flight cap was implemented to ease congestion issues at one of the world’s busiest airports, limiting the number of airplane arrivals to 88 flights per hour. The FAA claims that lifting the flight cap will allow for as many as 70 additional flights into O’Hare per day.
In the meantime, the airline industry’s ongoing battle with skyrocketing fuel costs has created a major downturn for that industry, resulting in higher fares, fewer flights, and workforce reductions. Due to the airlines’ ongoing struggle with escalating costs, many may not be able to take full advantage of the lifted flight cap. For some airlines, like Virgin America, however, the additional allowable flights into O’Hare mean the opportunity to establish a presence in the Chicago airport that was previously hindered by the cap.
“Feds lift O’Hare flight caps”
"Flight caps to vanish at O'Hare, but headaches may stick around"
June Edition 2008
Governor Finally Releases 6-year Highway Improvement Program
Governor Blagojevich has released his FY09-14 Multi-Year Highway Improvement Plan, totaling $10.9 billion over that span. The plan’s stated emphasis is on bridge safety and road maintenance, leaving major expansion and other safety improvement projects to be covered by a yet to be adopted capital bill. The Governor used the release of the Multi-Year Program as another opportunity to call for the passage of his capital plan, Illinois Works. Read the announcement at FY09-14 Road Program , and see the report in its entirety at www.dot.il.gov.
Deteriorating Roads and Transit Systems Growing Worse with Absence of State Capital Spending Plan
The spring 2008 legislative session is scheduled to come to a close at the end of this month and legislators have yet to produce any agreement on a statewide capital funding plan. The last time the General Assembly passed a capital bill was in 1999, but funding for the Illinois FIRST infrastructure plan ran dry in 2004. Despite the outcries from business and community leaders over the long absence of a new funding plan, legislators have not been able, and may not be able, to craft a new capital budget that will provide much needed funds for road repairs and transit upgrades while ensuring the state will not lose out on any crucial federal transportation dollars.
The Regional Transportation Association (RTA) Chairman Jim Reilly recently blasted the General Assembly for failing to overcome political differences in order to pass a new capital spending plan. The RTA had previously fallen victim to this political wrangling for the better part of last year and earlier this year before the General Assembly finally approved a package that prevented the RTA from entering into financial meltdown. While the legislation ensured the mass transit system in the Chicago and suburban areas would remain fully-functional, it did nothing to address the growing basic capital needs of that system that currently top $10 billion.
In the meantime, a state transportation consultant has warned state officials that deteriorating road conditions will double by 2013 if the state does not address the problem. According to Linda Wheeler, a former Illinois Department of Transportation employee turned consultant on state transportation needs, state capital funding for Illinois roads and highways has plummeted over a $1 billion in the past five years. The cost to repair roads is also growing five times faster than revenues, a ratio that will continue to grow larger the longer the state waits to approve a new capital budget.
“RTA chief chastises state leaders for failure to fund transit and roads”
"State road conditions crumbling quickly"
‘Trust Factor’ Could Prevent Capital Budget in 2008
The levels of political distrust rose to new levels last year, sending the General Assembly into a record-breaking overtime session and pushing legislators to demand that resolution on crucial issues, such as the mass transit crisis, be inexorably linked to the passage of a new capital budget. Eventually, those demands would fade as legislators realized their futility and the 2007 session quickly transitioned into the 2008 session carrying much of the same political baggage. The new session, however, did give some early hope to the belief that legislators could agree on a new capital budget, but with less than a week left in the regular session calendar, those hopes are quickly disappearing.
Despite the amount of time left on the session calendar, former U.S. House Speaker Dennis Hastert and SIU President Glenn Poshard, recently revealed the recommendations of the Illinois Works Coalition that include a $31 billion program paid for by the partial lease of the Lottery and gaming expansion. That plan, however, still has to overcome one of the biggest obstacles to passage, besides lack of time: the severe lack of distrust that exists between most members of the General Assembly and the Governor. This distrust has existed for a while, but the events of the past year have only furthered that distrust to the point where many legislators’ passion for securing a new statewide capital plan matches their fear that the Governor will ultimately hold money for local projects hostage.
"Clock ticking on state budget"
"Dennis Hastert, Glenn Poshard hammer out $31 billion public-works proposal"
Canadian National Acquisition Deal Still Under Fire despite Experts’ Praise
Since the Canadian National (CN) Railway Company’s initial announcement of its plan to acquire the Elgin, Joliet and Easter Railway Company (EJ&E) in order to ease rail congestion in the Chicago-area, supporters and critics alike were quick to weigh in on the proposal. Transportation experts and business analysts have continued to praise the deal while surrounding suburbs concerned about the increased rail traffic through their backyards have continued to criticize the proposed acquisition, ignoring expert analysis that suggests the deal would provide a huge economic benefit to the region.
Legislators, including presidential-hopeful Barack Obama, have also started to weigh-in, siding mostly with the suburban communities that cringe at the thought of having more rail freight traffic pass through their neighborhoods. Chicago rail congestion, however, is one of the worst in the nation, with some trains unable to navigate the city in less time than it takes a train traveling from California to Illinois. CN’s acquisition plan would allow much of that rail freight traffic to bypass the city thereby significantly improving travel times, but also increasing the speed at which business transactions are allowed to take place.
Illinois Chamber President, Doug Whitley, recently spoke out on the issue, suggesting that critics do more than just slow the proposed transaction, but also undermine the region’s economic value. The U.S. Surface Transportation Board is expected to rule on the acquisition by the end of this year.
"Canadian National plan for EJ&E praised by experts, spurned by suburbs"
O’Hare Expansion Plan Jeopardized by Airline Industry Woes, Slowing Passenger Traffic
The airline industry has suffered numerous setbacks over the past year as airline companies, such as United, fight to stay afloat in the midst of a slowing economy and rising fuel prices. One of the consequences of the airline’s struggles are fewer flights and higher ticket prices, but the plight of the airline industry also has the trickle down effect of reducing passenger traffic and making it more difficult for high-traffic airports, like O’Hare, to press forward with plans to expand their facilities.
O’Hare is currently preparing to enter the second phase of its expansion plan, after the airlines previously signed off on the first phase that includes the completion of a new runway by November 2010. The airlines, already struggling financially, however, may not be as willing to sign off on the second phase, which includes modernization of three existing runways and the construction of a new terminal. As a result, some experts worry that O’Hare’s Modernization Program may be put on hold.
May Edition 2008
Study Finds U.S. Investment in Transportation Infrastructure Failing to Keep Pace with Economy, Population Growth
The Americans for Transportation Mobility Coalition released a sobering report in early April that finds the nation’s current and future transportation needs are far outpacing U.S. investment in that infrastructure. The U.S.’ ability to remain competitive in an increasingly global economy depends heavily on its ability to develop a sound and high-performing transportation network. As the Coalition’s study suggests, the current patchwork approach to transportation policy in the U.S. threatens to paralyze the nation’s ailing transportation system.
With the total U.S. population expected to grow by more than 80 million people between now and 2035 and the economy expected to more than double in that same time period, the study emphasizes that this growth places a tremendous strain on the nation’s water, rail, highway, and air transportation systems. The Coalition’s study offers some insight into exactly how much investment is necessary to keep pace with this growth, suggesting rail freight infrastructure is in need of $148 billion; airport infrastructure demands an additional $41 billion; and highway and transit programs require more than $90 billion just to restore purchasing power.
If the U.S. fails to provide for significant investment in these infrastructure areas, that growth will continue to translate into a higher transportation costs and further drain on the U.S. economy. Major U.S. business and industry sectors, such as manufacturing, retail, agriculture, and the services industry would all suffer devastating financial setbacks without more investment. The Coalition’s report ultimately urges policymakers to provide for a more strategic approach to planning and investing in the nation’s transportation infrastructure.
For copy of the report, click here.
U.S. Railway Giants Announce Support for Canadian National Railway’s Plans for Chicago Revamp
In September last year, Canadian National Railway and U.S. Steel, which owns the Elgin, Joliet, and Eastern Railway (EJ&E) struck a deal to acquire the EJ&E rail system in order to bypass the city’s already congested railroad. The overall goal of CN’s proposed acquisition of the under-utilized railway is not only to reduce the time for cross-country hauling, but also free up rail capacity in the Chicago region. The proposal, however, drew almost immediate criticism from surrounding communities who feared the revamp would lead to an increase in noisy freight rail traffic through their neighborhoods.
The Union Pacific Corp. and Norfolk Southern Corp. - two of the largest railway companies in the U.S. - have now thrown their support behind rival CN’s proposal, claiming the acquisition goes beyond simply addressing the immediate congestion issues in the Chicago-area. The two railway giants argue that increased rail capacity is in the best interest of the nation’s increasing economic demands and local concerns “should not trump the importance of an efficient rail network to the U.S. economy.”
“U.S. Railway Heavyweights Back CN Plan”
New Tri-State Alliance Pushes State Capital Funding Needs
The nine year absence of a state capital bill in Illinois is not only proving problematic for state-only infrastructure needs, it is also having an impact on at least two bordering states. Earlier this month, government, transportation, economic development and business leaders from Illinois, Iowa, and Wisconsin teamed up to discuss the regions’ transportation infrastructure priorities. While the goal of the summit was to create a coordinated message to send to Congress about funding priorities that should be included in the federal 2010 transportation funding package, it was also aimed at targeting state funding issues.
All three states have a vested interest in seeing roads that connect the bordering states improved and rebuilt. A sound transportation infrastructure along the bordering states means increased opportunities for tourism and commerce. One of the routes identified as one of the costliest of the key projects is the restoration of a 50-mile stretch of U.S. 20 between Freeport, Illinois and Dubuque, Iowa. The stretch is one of the main travel arteries between the two states and is expected to cost upwards of $1 billion to rebuild.
The Alliance believes that the region’s ability to remain economically viable in an increasingly global economy depends on coordinating regional interests rather than competing against one another. Addressing those regional needs, however, may prove difficult, particularly with Illinois’ lack of movement on any capital funding. Illinois Congressman Don Manzullo has further accused Springfield and Governor Blagojevich as representing the “biggest roadblock to transportation improvements in northern Illinois.”
“Iowa, Wis., Ill. leaders Team Up in Search for Transportation Funds”
“U.S. 20 Listed as Key Travel Project”
Resolution to State Capital Funding Woes Does Not Guarantee Immediate Project Kick-Start
The Illinois Department of Transportation claims that most construction projects could not get started until 2009 if lawmakers are able to resolve their stalemate on a state construction plan prior to the end of May. This statement runs counter to a message the Governor has recently been relaying to communities around the state that a May agreement means long-overdue construction projects will get underway prior to July 4th.
Resolution on a statewide capital plan, however, still remains highly elusive. The Governor continues to tout the work of the Illinois Works Coalition, meeting with co-chairs SIU President Glenn Poshard and former U.S. Speaker of the House Dennis Hastert in mid-April to discuss revenue options. At the same time, meetings between the Governor and the four legislative leaders on this issue are still virtually non-existent. A continued lack of communication between the Governor, the Speaker, and the other three leaders could render any recommendations put forth by the Coalition moot.
The Coalition is expected to wrap up its scheduled listening session tour at the end of this month. No timeline has been identified for the release of their findings and recommendations, but with the legislative calendar five weeks away from its scheduled adjournment date, legislators will most likely demand a quick turn around on those recommendations.
“Blagojevich Underestimates Timeline on New Roads Projects”
April Edition 2008
Governor Taps Former Speaker of the House, SIU President to Lead New Public Works Coalition
On March 5th, Governor Blagojevich named Dennis Hastert, the recently retired former Speaker of the U.S. House, and Glenn Poshard, a former congressman and current president of Southern Illinois University, as co-chairs of a new statewide coalition that will help plug the Governor’s infrastructure proposal for Fiscal Year 2009. The Governor first announced his intent to create a coalition of business, labor, and community leaders during his FY 2009 budget address after pushing a $25 billion infrastructure program for the state. Illinois has not passed a capital budget to pay for critical public works projects since 1999 and if it fails to pass a budget this year, the state could risk losing nearly $10 billion in federal funds.
The Illinois Works Coalition will hold hearings throughout the state beginning mid-March through the end of April. The Coalition is expected to issue a report to the Governor and the General Assembly outlining the state’s capital needs, as well as recommendations for ways to pay for those projects. In his proposed FY 2009 budget, the Governor called for the partial lease of the state Lottery to pay for the capital program, but lawmakers have already appeared to reject that funding scheme. Both Poshard and Hastert have stated publicly that they do not intend to serve as “rubber stamps” for the Governor’s infrastructure proposal.
The state’s dire need for a new capital funding plan has been well-documented over the past several years, particularly as progress towards a new infrastructure program gets stymied each year in political debate. Last year, lawmakers appeared closer than before to approving a new statewide infrastructure plan through a gambling expansion package, but that proposal eventually fell apart. This year, lawmakers are still discussing that proposal, but it has now been joined by a renewed push to impose a 66% income tax increase on individuals and corporations to help pay for a statewide public works program.
To read more about the Coalition, its membership and upcoming hearings, please click here.
“2 ex-congressman to help pitch Illinois public works plan”
“Editorial: Time to rebuild Illinois”
Downstate Levees Face Decertification; New Levee Tax Proposal Could Alleviate Impact
The Army Corps of Engineers has determined that Illinois levees along the Mississippi River cannot withstand a 100-year flood event and consequently, face decertification. Once that occurs, thousands of residents and businesses in the St. Louis region would be considered a part of a “flood-hazard area,” resulting in skyrocketing flood insurance rates and a profound impact on the economic development efforts of the region. Federal decertification would impact five levees in Madison, Monroe and St. Clair Counties if county and state officials are unable to provide approximately $180 million in necessary repairs to bring the levees back up to the 500-year level.
An Illinois Senate Committee recently approved legislation that proposes a quarter-cent sales tax for Madison, Monroe and St. Clair Counties to help foot the bill for these necessary renovations. With federal decertification expected as soon as this summer, local and state officials are interested in moving the proposal forward as quickly as possible. Taxpayer advocates, however, have already expressed concerns that the legislation imposes a tax increase without voter approval. Proponents of the measure argue that due to the time sensitivity of the issue, the tax needs to be in place as soon as possible in order to raise the funds necessary to avoid not only high insurance costs, but also the possibility of devastating floods should the levees breach.
“Illinois legislation calling for levee tax advances”
Harsh Illinois Winter Creating Pothole Problems for Communities
As cities and towns throughout the state already struggle to pay for minor road repairs and projects in the absence of state capital funds, communities are also facing the added burden of one of the worst pothole epidemics in years. The frequent mix of freezes and thaws this winter has caused many Illinois communities, both large and small, to see a sharp increase in the number of pothole repairs they have been forced to make during the winter months when they would otherwise wait until the warmer construction season.
Due to the harsh, colder winter weather, immediate pothole repairs can only serve as temporary solutions. Transportation officials at both the local and state levels will have to return this summer with a more permanent fix, but neither of those repair jobs are without cost. The rising cost of oil and its impact on the cost of road overlay projects has also created concerns for communities as they anticipate their annual public works maintenance budgets.
“Potholes lump winter, construction seasons together”
“Townships, county, state, get their ‘fill’ too”
“Kane to spend $2.3 million on streets, more needed”
“Are people powerless in pothole plight?”
March Edition 2008
Mayor Daley Announces Transit Infrastructure Improvement Plan
Despite the lack of a statewide capital spending plan, Mayor Daley is pushing for a capital improvement plan for the Chicago-area mass transit system that carries a price tag of $227 million. Chicago’s 2016 Olympic bid has placed increased pressure on an ailing transit system to update its fleet of trains and buses, as well as make critical improvements to its rail system. While the price of the project may seem large, especially in light of the CTA’s recent budget woes, it is a drop in the bucket when compared to the $6.3 billion cost estimate to bring the entire system up to date.
Without the approval of a statewide infrastructure plan, however, the CTA will be forced to finance the project by issuing bonds and transferring money away from lower-priority projects. In the meantime, Mayor Daley remains hopeful that legislators and the Governor can work through their differences and approve a capital budget before Illinois endangers its share of federal transportation dollars.
“Mayor Daley announces big project to improve safety, reliability of trains and buses”
Statewide Capital Bill Could Face Problems in Ailing Bond Market
One of the major policy battles from the long, contentious session of 2007 that will likely carry over to 2008 is the battle over a statewide capital bill. Illinois has been without a capital budget since 1999 and statewide infrastructure needs are increasing rapidly. Lawmakers appeared poised to finalize an infrastructure package at the end of last year, but that plan quickly fell apart as personalities clashed and the one issue- mass transit- that may have carried it to fruition got resolved.
The Governor and legislators will most likely push once again for a statewide capital plan, but that plan could face another obstacle altogether. Funding for roads and other infrastructure projects are dependent on the sale of bonds and with a growing crisis in the bond market, states are finding it more difficult to secure loans with affordable interest rates. This means that the overall price tag for a statewide infrastructure plan could increase significantly or worse yet, Illinois may be unable to sell the bonds necessary to finance infrastructure projects.
To read more about the bond crisis and how it is impacting states, please click on the following:
“Bond crisis already crippling states”
President’s Proposed Budget Slashes Federal Transportation Dollars
Despite a slew of reports that suggest significant increases in federal transportation dollars are needed in order to reduce ailing transportation infrastructure and congestion issues across the country, President Bush’s proposed budget for Fiscal Year 2009 cuts transportation funding by more than $6 billion. Under the proposal, Amtrak would suffer a 34% cut in funding while airport improvement grants are also placed on the chopping block. The American Association of State Highway and Transportation Officials have also blasted the President’s proposal to borrow funds devoted to mass transit to help alleviate shortfalls in the Highway Trust Fund.
To read more details about the President’s proposed budget for transportation, please click here.
February Edition 2008
General Assembly Approves Mass Transit Funding Plan at 11th Hour
Legislators finalized a long-term funding plan for the Chicago-area mass transit system with only three days left before devastating service reductions and fare increases were scheduled to go into effect. The General Assembly had originally signed off on the legislation that will implement a regional sales tax increase and a new real estate transfer tax for the City of Chicago to provide a $530 million funding package for mass transit the week before, but the Governor quickly amendatorily vetoed the bill to require free transit rides for all senior citizens over the age of 65. Despite anger and frustration among legislators over the Governor’s unexpected move, they returned to town on January 17th long enough to push through an edited version of the legislation that will keep trains and buses in service, exempt seniors from transit fares, and make Chicago one of the nation’s costliest cities to shop in.
The final passage of a funding plan ends a long, emotional roller coaster ride for the Chicago-area mass transit system and the riders that depend on that system, but not before the system survived two doomsday scenarios and several failed attempts to pass a long-term funding plan. While crisis may have been averted in terms of service cuts, layoffs, and fare increases, a deteriorating mass transit infrastructure threatens another crisis with a much larger price tag.
To read more about the passage of the mass transit bill and transit infrastructure needs, please click on the following stories:
“Fixing Transit to be a Marathon”
“Some Fare Hikes Expected Despite Transit Resolution”
Statewide Capital Funding Plan May Suffer More Delay
Many downstate lawmakers were hopeful that by withholding their support for a resolution on the mass transit crisis, they could also secure the first statewide capital funding plan since 1999, but that hope started to dissipate after January 1st when mass transit legislation no longer demanded a supermajority vote. Prior to the first of the year, discussion surrounding the dire need of the state’s mounting infrastructure needs appeared to generate growing legislative support for the passage of a capital plan, but now that it is no longer able to join causes with mass transit, many fear that a capital funding package could end up a political casualty yet again. With statewide capital needs topping out at $20 billion and the mass transit system claiming to need $10 billion over the next five years alone, Illinois’ ailing infrastructure may have to wait another year before it sees a capital budget.
To read more about the fate of the capital budget, please click on the following links:
“Capital Plan Languishes in House”
“Eyes Turn to Capital Bill, and How to Pay For It”
“State’s Infrastructure Plan Waits”
“Editorial: Downstate Lawmakers Should Have Stuck Together”
New Federal Transportation Report Marks Start of Fight over Federal Transportation Funding in 2009
A report recently released by the National Surface Transportation Policy and Revenue Study Commission detailing a two-year review and analysis of the nation’s transportation needs will prove crucial in the upcoming battle over the reauthorization of the current U.S. highway bill. The report, “Transportation for Tomorrow: Report of the National Surface Transportation Policy and Revenue Study Commission,” examined all infrastructure needs across all system components, including mass transit, freight rail, highways and bridges, and ports. As the report indicates, with a wide array of competing national infrastructure needs across a variety of transportation mediums and an estimated $4 billion shortfall in federal funding by the end of 2008, the fight over how to generate critical federal transportation dollars could be just as bloody as the fight over how those dollars will be distributed. Many members of the business community, including the U.S. Chamber, used the release of the report as the springboard to begin what some think will be the “most aggressively lobbied highway bills in recent memory.”
“Study to Kick-Start Highway Bill Lobbying”
January Edition 2008
New Laws in 2008
EDC/Infrastructure/Business-related (regulatory):
HB 226 Disability Calling Devices- requires gas stations that offer fuel for sale only at self-service islands to provide at one or more islands a calling device that allows disabled persons to communicate with the station attendant (P.A. 95-183).
HB 369 Gift Card Fees- bans the charging of inactivity or service fees on gift cards for up to 5 years after the card has been issued (P.A. 95-0525).
HB 1241 Small Business Loans- doubles the State’s maximum amount for small business loans to minority, female, or disabled individuals (P.A. 95-0097).
HB 1313 Ethanol Research Center- provides that the Illinois Ethanol Research Advisory Board shall establish and operate the National Corn-to-Ethanol Research Center at Southern Illinois University- Edwardsville as a State Biorefining Center of Excellence (P.A. 95-0099).
HB 1657 Motor Vehicle Fees- amends the Motor Vehicle Retail Installment Sales Act to increase the base documentary fee from $40 to $150 (P.A. 95-0280).
HB 1855 Substance Abuse Prevention- creates the Substance Abuse Prevention on Public Works Projects Act to prohibit an employee of a unionized public works project from being under the influence of a controlled substance. The new law also mandates substance abuse programs as part of the collective bargaining agreement (P.A. 95-635).
HB 2786 Life Insurance Discrimination- prohibits life insurance companies from making a distinction or otherwise discriminating between persons, reject an applicant, cancel a policy, or demand a higher rate of premium for reasons based solely upon an applicant’s or insured’s past lawful travel experience or future lawful travel plans (P.A. 95-163).
SB 4 Stem Cell Research- formerly establishes the Illinois Regenerative Medicine Institute under the Department of Public Health to award State grants to research entities and institutions for the advancement of stem cell research and other biomedical research (P.A. 95-0519).
SB 137 Soliciting Electronic Information- prohibits any individual, by means of a Web page, e-mail message, or otherwise through use of the Internet, to solicit, request, or take any action to induce another person to provide identifying information by representing oneself to be a business without the authority of approval of the business (P.A. 95-0350).
SB 263 Airport Authorities- creates two new airport authorities in Peoria and Crawford County that supersede the existing airport authorities operating in these two regions (P.A. 95-365).
SB 382 Building Standards- provides that the corporate authorities in each municipality may establish local standards solely for the review of the exterior design of buildings and structures, excluding utility facilities and outdoor off-premises advertising signs (P.A. 95-0475).
SB 730 Sprinkler System Mandates- provides that all automatically operated lawn sprinkler systems shall have furnished and installed technology that inhibits or interrupts operation of the system during periods of sufficient moisture or rainfall (golf courses and agricultural lands are exempted- provisions will be enforced January 1, 2009 (P.A. 95-0421).
SB 1162 Motor Vehicle Dealers Payment Mandates- requires motor vehicle dealers to pay the party that holds the lien on a car traded-in to a dealer within 21 days of the vehicle trade-in (P.A. 95-393).
SB 1508 Building Codes- provides that once a building permit is issued, the applicable building codes of any unit of local government that are in effect at the time of the issuance of the permit shall be the only building codes for the duration of the building permit (P.A. 95-0512).
SB 1704 FutureGen Plant- streamlines the permitting process for a FutureGen plant, exempts the project from any potential generation tax, and includes statutory authority to offer clean coal grants and tax exemptions to FutureGen. The bill became law June 30, 2007, but pending award of the new plant to Illinois would make these provisions applicable as construction gets under way in 2008 (P.A. 95-0018).
Laws effective June 1st 2008:
HB 429 Wine Shipment- establishes provisions governing the direct shipment of wine to consumers from both in-state and out-of-state wineries (P.A. 95-634).
HB 3490 Construction Contracts- authorizes a Public Building Commission to solicit and award design-build construction contracts for public works projects (P.A. 95-0595).
December Edition 2007
Mass Transit Facing Third Doomsday Scenario, State Funding for Statewide Infrastructure Needs Still Unresolved
The contentious legislative session has left two very critical issues unaddressed: long-term funding for the Chicago-area mass transit system and a comprehensive capital budget for the state’s infrastructure needs. Illinois’ capital needs have gone without funding for eight long years while the funding crisis in the mass transit system has reached the point where many argue that if nothing is done by January 20, the third doomsday date set by the mass transit agencies, then riders could face fewer service options and higher fares.
Although the Governor has twice identified a short-term funding solution to stave off the mass transit crisis, the threatened fare hikes and service cuts have only grown more severe. The CTA recently sent out notices to 2,200 workers that they will be laid off on January 20 if the General Assembly fails to come through with a long-term funding solution. Pace has also notified 185 workers that their jobs are on the line. Metra- a critical commuter service for those in the suburban areas- could face a 10 percent increase in their fare beginning on February 1st, with an additional 10 percent increase in 2009 and in 2010. Both the CTA and Pace have also threatened fare increases and service cuts that could leave many riders who depend on that service paralyzed.
The Governor has called legislators back to town November 28 to deal with the impending mass transit crisis, but whether there is an agreement to make the return to the Capitol worthwhile still remains to be seen. Republicans, however, have steadfastly maintained that mass transit and capital are inexorably linked and have refused to address one issue without the other, so any mass transit solution absent a resolution on funding statewide infrastructure needs will most likely go nowhere. Meanwhile, the Governor, Mayor Daley, and the four legislative leaders have met several times over the last couple of weeks in an attempt to broach an agreement, but those meetings appear to have been more productive in the way of spurring the ongoing political bickering rather than resolving the two major issues that still loom over the Capitol today.
To read more about the mass transit crisis and a perspective on the state’s unresolved construction plan, please click on the following links:
“Severe Cuts, Fare Raises OKd as Pace Passes Dire Budget”
“Metra to Raise Fares if Funding Falls Through”
“Transit Unions Fear Demise of Deal on Pension, Health Care”
Congress Defeats Bush Veto of Water Resources Development Act (WRDA)
On November 3, President Bush delivered on his threat to veto an Act that will fund vital improvements to Illinois’ and our nation’s waterways. Both the U.S. Senate and House, however, again proved there is widespread congressional support for the Water Resources Development Act by overriding the President shortly after he issued his veto. The new law will deliver $23 billion in long overdue funding for various national water resource projects; projects that include the construction of seven new locks on the Upper Mississippi and Illinois’ Rivers, as well as environmental restoration efforts along those waterways. Illinois communities, contractors, suppliers, construction workers and commodity shippers stand to benefit from an estimated $7 billion- approximately one-third of the Act’s total funding- in lock and waterway improvements.
To read more about the WRDA and the override, please click on the following story:
“Congress Overrides Bush Veto of Water Resources Development Act”
Feds Deliver Blow to O’Hare as Busy Travel Season Arrives
With the busy holiday travel season already underway, President Bush offered some hope to travelers dreading the inevitable effects of crowded skies by ordering restricted airspace to open up to help ease congestion. While the Transportation Security Administration (TSA) will be increasing the number of security lines and screeners, airlines are also beefing up their forces to get more planes on and off the ground in a timelier fashion. Yet, some analysts argue that without efforts to address systemic problems in the aviation industry, such as runways and tarmacs bumping up against their capacity, the efforts announced by the Bush Administration and the travel industry may be all for not.
Chicago’s O’Hare Airport- one of the busiest airports in the world- is a case in point. Just prior to Bush’s announcement regarding federal activities to ease flight congestion, the Federal Aviation Administration (FAA) decided not to lift a cap on flights at O’Hare next November. The move could jeopardize a $15 billion expansion plan at the airport, which includes the opening of the first new runway in November 2008, when the FAA had first promised to lift the flight cap. The FAA’s decision, however, is based on concerns that lifting the cap would open the door for airlines to schedule too many flights, creating gridlock at O’Hare and other national airports. The cap was originally implemented in 2004 for that reason when O’Hare suffered the most flight delays in the nation.
To read more about the FAA’s decision and the federal efforts to ease congestion during the holidays, please click on the following story:
“U.S. Take Steps to Ease Holiday Flying”
November Edition 2007
Mass Transit: Tumbling Towards Catastrophe?
With the legislative fall veto session over and the General Assembly once again failing
to act on a long-term funding solution for mass transit, the transit boards have painted an increasingly bleaker picture of the future of mass transit in the Chicago and suburban region. The Regional Transit Authority (RTA) had assumed earlier this year that the legislature would eventually approve a nearly $400 million funding plan built on a sales tax increase for Cook and the Collar Counties, as well as a real estate transfer tax for Chicago. That plan, however, fell flat in the House after it failed to win the 71 votes needed for passage.
In the meantime, support for the regional sales tax/real estate transfer tax funding plan has been eroded by a Governor that has publicly decried the sales tax funding mechanism and mounting concerns that the plan is not tied to a more critical statewide capital plan. The Senate did prepare and pass an alternative proposal prior to the veto session that provides a $200 million loan to the RTA that is contingent upon gaming expansion. The House has not acted on the proposal. The House Mass Transit Committee, however, did meet long enough this veto session to hear about a new funding scheme for mass transit floated by officials in the Governor’s office that would impose a commercial parking lot tax in the RTA service area, but the Committee quickly dismissed the funding alternative as neither adequate nor feasible.
The September 16th deadline the RTA had originally flagged as the drop dead date for service cuts and fare increases has now been extended to November 4th, but only after the Governor offered and the RTA reluctantly accepted a short-term loan to buy the mass transit boards and the General Assembly another month and a half to strike a long-term funding deal. Now with only a couple weeks left before the “doomsday” extension expires, the CTA, Metra and Pace have all released revised budgets for 2008 that threaten even deeper service cuts and higher fare increases than those threatened before and the General Assembly appears no closer to an agreement on a long-term funding plan.
House Committee Hosts Groups Pleading for New Capital Budget
Despite the fact that the General Assembly has officially wrapped up the fall veto session, the House Appropriations- Public Safety Committee met on Thursday, October 18th to hear from a variety of groups about the desperate need for a new capital budget. A Fiscal year 2008 capital budget is one of the major issues still on the table and while the Senate did pass a capital plan in mid-September, the House has yet to act on that plan or any other version of a capital budget.
During the hearing, House members heard from the new Illinois Transportation Secretary, Milton Sees, Kirk Brown of the Transportation for Illinois Coalition, the Chicago-area mass transit authorities, representatives of downstate mass transit systems, unions, railroads, State and community agencies, and local community representatives all testifying to the devastating effects of going eight years without a capital budget.
Secretary Sees, as well as other individuals testifying at the hearing, expressed concern that without new state funding for capital needs, federal transportation dollars could disappear permanently, leaving earmarked projects that have already been on the waiting list for funds for several years in danger of never receiving any funding. Kirk Brown outlined the statewide capital cost projections of the TFIC, suggesting that the cost of meeting a growing number of infrastructure projects actually exceeds the plan proposed by the Senate, which provides approximately $13.4 billion in state funds over six years (with $4.4 billion for FY08). Officials from the RTA, CTA, Metra, and Pace also discussed how the lack of state capital dollars has added to their budget woes, with each entity having to divert their own capital funds to cover operating costs making them unable to update ailing transit infrastructure.
House Committee members heard nearly four and half hours of testimony before adjourning with no clear indication as to if and/or when the House would take up a capital budget for 2008.
Bush Threatens Veto of Water Resources Development Act of 2007
The U.S. Senate gave its final approval to the Water Resources Development Act of 2007 (WRDA) in late September after the House signed off on the legislation in August. The WRDA, which now sits on the President’s desk, is critical to both the nation’s overall waterway infrastructure and Illinois’ ability to make crucial updates to the locks and dams along the Upper Mississippi and Illinois rivers. Despite the importance the legislation bears on the economic viability of Illinois and the nation, the President has threatened to veto the legislation, claiming the bill “fails to exercise fiscal discipline.” Numerous organizations, including the U.S. Chamber of Commerce and the American Society of Civil Engineers, as well as Republican senators and representatives have urged the president to sign the WRDA.
Although the WRDA received enough votes in both the U.S. Senate and the House to secure a presidential veto override, a presidential veto would only further delay final passage of the bill. Kevin Rund of the Illinois Farm Bureau and Chair of the Waterway Committee emphasized at the July Infrastructure Council meeting the importance of moving forward with work to improve lock systems and the environmental restoration of Illinois’ locks and dams. A presidential veto would further delay that crucial modernization.
To read more about the WRDA, please click on the following links:
"Overwhelming Vote for Water Resources Act Answers Bush Veto Threat"
Summary analysis of the legislation, prepared by the U.S. Congressional Budget Office
October Edition 2007
Senate Approves a Capital Budget and Casino Expansion; Mass Transit Would Receive One-Year Loan
After years of falling victim to political wrangling, the Senate finally approved a long-awaited capital plan on September 18 that allows the state to spend nearly $25 billion in state, federal and local dollars on critical infrastructure projects over the next six years. The capital plan, however, is contingent upon a more controversial bill that authorizes three new casinos: a land-based casino operated by the City of Chicago and two new riverboats at unspecified locations. The legislation also increases gaming positions by 6,000 slots at existing riverboats.
The massive gaming legislation not only serves as the lynchpin for the capital plan, it also gives the RTA a $200 million loan that should hold the mass transit system together until June 2008, buying legislators more time to reach a long-term funding solution. The RTA had also recently agreed to accept a $91 million cash advance from the Governor to prevent the Authority from slashing services and increasing fares in order to keep them whole until at least the beginning of November.
The Senate was also scheduled to act on legislation that would offer mass transit a more long-term, stable source of revenue. The Senate’s legislation, like the House’s version, proposed to increase the sales tax in the Cook and collar counties, as well as imposing a real estate transfer tax in Chicago. Unlike the House’s legislation, however, the Senate version altered the make-up of the RTA board to favor the suburbs, which ultimately, Chicago Mayor Daley opposed. Consequently, the legislation failed to even receive a vote in committee, which, coupled with the House’s inability to muster enough votes for passage earlier this month, places any long-term solution for mass transit funding still beyond reach.
Despite the Senate’s action on the capital budget, the future of that budget remains in question, as the House Speaker has indicated that the House will not act on Senate’s capital/gaming plan.
To read more of the highlights of the capital/gaming plan, click here.
To read more about the Senate’s action, as well as the RTA’s decision to accept a short-term loan from the Governor, click on the following links:
The Minnesota Bridge Collapse: A Wake-up Call for the Nation’s Infrastructure Needs
The collapse of Minnesota’s Interstate 35 bridge struck a national chord, not only for the tragic loss of life, but because the incident highlighted just how dire the nation’s infrastructure needs have become. Experts have long warned that much of America’s infrastructure is reaching the end of its lifespan and is simply unable to keep pace with expanding transportation needs. Addressing many of the critical infrastructure needs, both at the state and federal levels, however, has often fallen victim to political gamesmanship.
A Wall Street Journal editorial written shortly after the bridge collapse called on Congress to back away from its “earmarking” ways and implement a new way of thinking when it comes to road funding. An opinion piece written by national security expert Stephen Flynn for Popular Mechanics took a slightly more scathing route, claiming that Americans have simply “squandered [our] infrastructure legacy.” Read the full WSJ editorial and PM opinion piece.
The Reason Foundation has also produced several studies on the status of our nation, as well as individual states’ infrastructure needs. A study released in June 2007 by the Foundation measures the performance of state-owned roads and highways from 1984 to 2005 in 12 different categories, including traffic fatalities, congestion, pavement condition, bridge condition, highway maintenance and administrative costs, to determine each state’s ranking and cost-effectiveness. According to the study, Illinois ranked 33rd in the nation in the overall performance ratings. The study also shows that one of Illinois’ best ratings was for deficient bridges (9th). Incidentally, Minnesota ranked above Illinois in that area (5th).
To view the full report, as well as other interesting reports on this area, please click on the following links: