 |
Home | Search | Browse | About IPO | Staff | Links |
|
Home | Search | Browse | About IPO | Staff | Links |
|
By NORA NEWMAN JURGENS Money for roads and mass transit: It takes some to get more Illinois could gain $1.75 billion in federal aid for roads and mass transit over the next four years, but only if it can come up with state dollars to match those much needed federal funds. Will this be the incentive that gets a hike in the gas tax and user fees through the General Assembly? HAS Transportation Secy. John D. Kramer entered the "Twilight Zone of Transportation"? Faced with declining state funds for highways and mass transit in 1984, is he reliving 1979? In what appears to be an attack of déjà vu, Kramer and Gov. James R. Thompson are asking for increases in the state gas tax and highway user fees in state fiscal 1984 to maximize federal aid and revitalize the state's crumbling highways and mass transit systems. Kramer was faced with a similar dilemma in state fiscal 1979, when the legislature could not be persuaded to pass similar increases, and he and the Illinois Department of Transportation (IDOT) had to live with a meager budget. In the governor's March 2 budget message, Thompson presumed no increase in taxes and outlined a transportation program for state fiscal 1984 totaling $2,712 billion. Although this represents a 14 percent increase over the $2,370 billion appropriated for state fiscal 1983, the 1984 budget shows a 12 percent drop in state funds, which Kramer expects to offset by an increase in federal funds. Indeed, for the next four years, Illinois is due for a veritable flood of federal aid because of the passage of a 5 cent a gallon increase in the federal gas tax. Under that legislation, the U.S. Surface Transportation Assistance Act of 1982, Illinois is due to receive $1.65 for every dollar sent to Washington. As a result, the state fiscal 1983 transportation budget has already received a substantial boost, with an additional $445 million in federal money. (See box on "1983 highway programs.") And that could be just the beginning. Illinois stands to gain a total of $1.75 billion from the feds during the next four state fiscal years, if (and it's a big if) the state can come up with the required matching dollars. The feds temporarily deferred payment of such state matches for federal fiscal 1983, which temporarily saved Illinois $35 million. The state, however, must pay the $35 million by October 1, 1984. Any portion of the state match not paid by then will be deducted from subsequent federal aid, Kramer said. At least $135 to $140 million a year will be needed in state money to capture the $1.75 billion in federal aid, according to a department spokesman. If the legislature does not pass any tax increases, the state would only be able to match about $1.6 billion in federal aid, which is inadequate to meet the state's needs, according to IDOT. In addition to the state match, Kramer feels the state needs at least another $260 million in revenues annually to keep up with the maintenance of the 2,500 miles of roads and the 1,000 bridges not covered under any federal program. With no increase in revenue, the state will be faced with a rapidly declining road program. As program levels go down, levels of state resources available to match federal funds also continue to decline. (See table 1.) In the Thompson-Kramer 1984 no-increase-in-taxes transportation budget, $695 million has been set aside for the highway construction program. The majority of the money, $610 million, will come from the feds. This is a 21 percent drop from 1983's program, which received a massive infusion of federal dollars. A total of $735 million boosted the 1983 program to $885 million. The fiscal 1984 appropriation proposed in the March 2 budget will concentrate on the maintenance and repair of the state's roads and bridges, as well as continued work on ongoing projects. Major program objectives include:
Although the state is just barely able to match all federal aid available for the 1984 road program, public transportation will not be so lucky. For fiscal 1984, there is only $33.1 million left in bonding authority, which is used to provide capital assistance for the Regional Transportation Authority, as well as operating and capital assistance for downstate carriers. With the addition of $1.4 million from the general revenue fund, as suggested by the governor March 2, the state will only be able to match 27.4 percent, or $130.4 million, of the available $475.9 million in federal aid. The state must come up with an additional $91.3 million if it is to capture its full share of mass transit federal dollars in fiscal 1984. And the inability to capture available federal transportation funds will become a trend, department spokesmen say, if there are no new state revenues. (See table 2.) After allowing for the road program and mass transit, $1.3 billion of the $2.7 billion total transportation budget remains for: routine highway maintenance ($181 million); assistance for local projects ($356.7 million); and for the state's airports, railroads and waterways ($762.3 million). (The state's tollway system takes care of itself under the jurisdiction of the independent Illinois Toll Highway Authority.) May 1983 | Illinois Issues | 20 In order to bolster the balance in the general funds for fiscal 1984, Thompson proposed in his March 2 budget
As with his proposal to eliminate local governments' share of the state income tax, Thompson will have to convince legislators to pass the necessary changes in the law to reduce the MFT share to local government. Of course, all this can be avoided if Thompson gets his wish for an increase in the state gas tax and user fees. His proposal would generate an additional $1.28 billion in revenue ($322 million a year) over the next four years — which is enough to snag the $1.75 billion in federal funds available, and to give local governments additional revenue for their projects. Thompson proposes to increase the state motor fuel tax from 7.5 cents to 11 cents a gallon, which would raise an average $138 million a year in new revenue. Of that increase, 1.5 cents would stay in the Road Fund, while 2 cents would be distributed to local governments, giving them an additional $68 million a year.
After fiscal 1984, the MFT would be adjusted to reflect the growth in the state's economy, based on personal income, rather than on increases in gas prices. Any subsequent additional revenues would be split 70:30 between the state and local governments. Local governments are not happy with the proposed split. But a spokesman for IDOT suggested that they might "carry their share of the burden" by raising additional revenues on their own. The biggest and most stable source of new revenue would come from increased fees for car and truck plates, which would generate $157 million a year. Thompson's plan would increase fees for large cars and pick-up trucks in fiscal 1984 from $30 to $48. Small car fees would be increased from $18 to $36 in 1984, to be brought up to $48 in
May 1983 | Illinois Issues | 21
1985. Other truck registration fees would increase by 20 percent in 1984. The third part of the plan calls for an increase in user fees for heavy trucks. Expected to generate $28 million in new revenue a year, the fees represent a compromise between the trucking industry and the state. In order to qualify for federal revenue under the federal tax increase, Illinois has to raise its truck weight limit from 73,500 pounds to the national limit of 80,000 pounds. But fees will be raised because IDOT says it needs at least $28 million to cover most of the road damages that will be caused by the heavier trucks. If the legislature passes the governor's entire tax package for transportation, the state would receive the additional revenue it needs to capture the maximum in federal money for highways and mass transit. It would also allow a $900-950 million road program each year for the next four years, according to Kramer. While a road program of this size would not provide for the improvement of every deteriorated road in the state, he said that it would begin to reduce the backlog. An estimated 1,000 miles of road deteriorates each year, according to IDOT. The governor's $322 million revenue increase proposal is conservative, however, when compared with a $704 million transportation package proposed by the staff of the legislature's Transportation Study Commission (TSC). Based on an extensive study of the state's transportation needs, the staff came up with proposals which would take care of just about every transportation problem in the state. They made their recommendations to the commission in January, but the members had not acted on them by April. While they did not suggest any specific source for the money — that would be the function of the members of the commission — the TSC staff proposed the establishment of a new account, the Highway Construction Fund. New road taxes of about $450 million would be funneled into this account, according to the staff proposal, which would be separate from the state Road Fund. And in order to make use of the new revenue before it is collected, the staff also suggested that the state issue tax anticipation warrants to cover the cost of highway projects — up to $400 million for the fund. May 1983 | Illinois Issues | 22 Again, no specific tax proposal was suggested by the staff to raise the $704 million, which includes subsidies for mass transit and the tollway system. But it is estimated that to support the program, an increase of one-half percent in the state income tax would be needed, along with a 1 percent increase in the state's sales tax, and a 15 cent increase in the gas tax. Coming to the rescue of the Regional Transportation Authority (RTA), the TSC staff recommended a generous $130 million a year subsidy over the next five years, but only with the adoption of major reforms in the RTA's management and finances. Thompson has said he is willing to provide a $50 to $100 million a year subsidy to the RTA, if he gets his income tax increase. But as of April 1, he has said nothing specific about reforming the system.
And last, but not least, the TSC staff has suggested a rather revolutionary solution to end the constant bickering between Chicago and downstate legislators over transportation funding. They have recommended an "equity formula" which will ensure that each region gets almost a dollar-for-dollar return of any new tax money they pay to Springfield. (Table 3 is a comparison between the TSC staff proposals and those suggested by IDOT.) In the meantime, Kramer is caught in the middle — trapped in the Twilight Zone of an unclaimed revenue increase plan. He knows what can be done with more money — a strong transportation program for Illinois — but no gallant knight on a silver bulldozer has come charging out of the legislature to champion the cause. The politicians, the citizens and business, all users of the state's transportation network, have to realize that Illinois has the third lowest user fees in the nation, Kramer has said. The fee structure has not changed since 1969 and has lost a third of its purchasing power due to inflation, according to Kramer. These low rates may appear on the surface to be a bargain to the system's users, but Kramer says they contain "hidden" costs: "driving on rough roads uses up 50 percent more fuel, increases wear and tear 150 percent, doubles maintenance costs and contributes to accidents." Kramer also pointed out that deteriorating roads and mass transit systems are discouraging to business development, which is the priority for Illinois' economic recovery. Selling Thompson's package of tax increases and fee hikes, however, is another matter. Legislators are by nature reluctant to be associated with anything that even hints of a tax increase, although they are well aware of the value of a finely tuned highway and mass transit system. Besides the regular transportation committees of the House and Senate, dominated by Democrats, House Minority Leader Lee Daniels (R-46, Elmhurst) has established a new Republican Policy Committee, which will generally study "issues of concern to the people of Illinois" and which has set up two subcommittees — highways and mass transit. Bills appropriating the amounts requested by the governor in his March 2 fiscal 1984 budget have been introduced in the Senate. And the technical bill to bring truck weights up to the federal standard has passed out of the Senate Transportation Committee. IDOT opposes it, however, because it will generate only $12 million in new revenues, not the $30 million called for by Thompson in his tax package. No other bills were introduced as of April 1. Since Thompson presented his tax increase package in March, most reaction has focused on the proposed increase in the income tax and on how Thompson would spend the increase in general revenue funds. Aside from local governments' displeasure with the 70:30 split in any new gas tax revenue, other lobbying groups have been generally in favor of Thompson's transportation tax package and of the way the funds would be spent. Both the Illinois Taxpayers' Federation and the Illinois Transportation Council, which represents a consortium of transportation interests, have come out in favor of Thompson's transportation proposals. And while basically supportive of the gas tax and user fee hikes, the Illinois State Chamber of Commerce hedged on endorsing the whole transportation tax package. The chamber has called for a reinstatement of a state operating subsidy for the RTA with "proper spending controls." The group also suggested increased subsidies for downstate transit systems. Thus, Secy. Kramer stands poised on the edge. He can take IDOT and Illinois through to a bright new day of smooth roads and well-oiled transit systems. But if he does not get the support he needs in the legislature, he may remain in the Twilight Zone of crumbling roads, late buses, inefficient bureaucracies and complaining politicians and citizens.□ May 1983 | Illinois Issues | 23 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
