A $1.1 billion plan to accelerate road construction was signed into law July 22, putting in place the final piece of the state’s annual budget.

House Bill 3794, which received bi-partisan support in May, will allow the state to accelerate its multi-year road construction plan. All of the projects affected are “shovel ready” and were selected by the state’s transportation department.

The majority of about 200 projects are expected to involve resurfacing short segments of roads throughout the state, as well as some bridge repairs.

With these additional funds, the Fiscal Year 15 Road Program will total $3 billion. Many lawmakers said that while this is a needed boost to the annual program, it is clearly a Band-Aid approach to a long-term problem needing a long-term solution. 

The Capital infusion includes $1 billion for State roads and bridges and $100 million for local governments.  The local portion of funding will be distributed through the existing Motor Fuel Tax distribution formula as follows:

$49.1 million for Municipalities;

$16.7 million for counties over 1 million population (Cook);

$18.3 million for counties under 1 million population;

$15.9 million for local road districts.

The $1.1 billion borrowing is not expected to result in an increase in bond payments, but rather it will be covered by a reduction in debt service costs due to repayments of other borrowing. Over half of the bonds sold in 1999 for the Illinois FIRST capital program have been repaid and revenues have grown sufficiently to free up sufficient revenues to cover the new debt payments.

The new bonds are to be paid down in equal amounts each year, with final payments in 25 years.  Debt service is expected to be $30-40 million in FY16, and peak at $80 million in FY18 at $90-100 million.  Interest rates are projected at 4% to 4.5%. The authorization to sell the bonds was included in a companion measure also signed into law, SB 3224.

Most of the state budget was signed June 30, just before the beginning of the state’s 2015 fiscal year. Out of a $35.4 billion General Funds budget, the Governor issued only one cut, vetoing out $250 million for state Capitol Building restorations that were not expected to get underway in the coming year anyway.

Fiscal conservatives have criticized the Governor for leaving intact a number of undefined earmarks, special projects and lump sum allocations. That includes a $20 million appropriation to the state’s Labor Department for what appears to be a resurrected and rebranded version of the Governor’s politically-charged and failed 2010 anti-violence initiative that is currently under investigation by federal prosecutors and others.