Next week the House will return to Springfield to take up the linked questions of mass transit, capital improvements, and whether casinos are the answer to any of this. As I posted a couple of months ago I have been working on an alternative idea to fund mass transit. I filed a bill incorporating those ideas two weeks ago as
HB4185 [3]. A bullet point synopsis follows.
HB 4185 (Fortner)
- Starts with the SB 572 amendment 10 including all reforms and governance changes.
- Changes are only to the revenue provisions of SB 572.
- No increase in the regional sales tax.
- Sunset on the use of the Chicago real estate transfer tax.
- Provides tax relief on the price of gasoline.
- Uses motor fuel tax instead of gasoline sales tax to fund transit.
- At $3.00 per gallon, about 13 cents goes to the 5% state sales tax.
- An increase of 8 cents per gallon instead of the 5% sales tax provides about 5 cents per gallon tax relief for Illinois consumers.
- A tax per gallon has less fluctuation from year to year than a sales tax tied to the price of gasoline (no windfalls).
- Revenue would go into a new Metropolitan Transit and Road Improvement Fund (MTRIF).
- Cook and collar county motor fuel tax exceeds the need identified by the RTA.
- The RTA target was for $280 million per year.
- The 8 cents per gallon tax would generate $320 million per year in the six-county RTA region.
- The 8 cents per gallon tax would be indexed to inflation (CPI) to provide sufficient growth in revenue in future years.
- Proceeds in MTRIF from RTA counties would go directly to the RTA.
- Retain the obligation for Chicago to support the CTA pension bonds.
- Bonds requiring $100 million/year for principal and interest would be secured by a real estate transfer tax enacted by the City of Chicago.
- If Chicago gains a casino, then $100 million/year towards the bond payment would come from the revenue of the Chicago Casino Development Authority.
- The real estate transfer tax increase authorized to pay these bonds would be abated to the extent that Chicago Casino Development Authority money is sufficient to pay the principal and interest on these bonds.
- The Chicago real estate transfer tax increase would eventually be completely abated, although it would remain on the books in the event of a future shortfall in gaming revenues.
- New downstate motor fuel taxes would be restricted to downstate needs.
- The 8 cents per gallon proceeds would generate $160 million per year from the other 96 counties.
- The proceeds would be restricted to downstate transit, Amtrak, and downstate road projects.
- The current downstate mass transit subsidy is $84.5 million if fully funded.
- The current Amtrak subsidy is $24.3 million.
- Remaining funds would go to the Road Fund for downstate projects.
- Proceeds in MTRIF from downstate counties would be distributed through IDOT.
- Disbursements from MTRIF could not reduce other appropriations to local projects.
- Net impact on the GRF is about $450 million per year.
- Loss of 5% sales tax on gasoline reduces the GRF by about $600 million per year.
- Shift of downstate mass transit and Amtrak to MTRIF reduces GRF obligations by about $110 million per year.
- Excess funds to the RTA could be applied to the required 30% state match of new RTA funds and reduce GRF obligations by $40 million per year.
