CGFA March revenue summary released. The March 2022 revenue report, compiled by the Commission on Government Forecasting and Accountability, continued to show revenues buoyed by one-time tax intake factors. Personal income tax payments in March 2022 were $3,147 million, up more than $600 million from the pandemic-squashed income tax payment cash flow of March 2021. Corporate income tax payments rose year-over-year by $180 million in March 2022, and sales tax revenues rose $106 million. These three cash flows made up by far the largest share of an overall general funds cash increase of $994 million during this 31-day period.
During the first nine months of FY22, general funds receipts are up almost $3.7 billion from the year-earlier period. Overall income tax and sales tax trend lines indicate that this level of increase is unsustainable; it is driven by recovery from the severe 2020-21 economic shutdown caused by COVID-19 and business closure orders. Unfortunately, the Pritzker administration has worked with Democrats in the Illinois House and Senate to bake much of this increase into the permanent “spending base” of the Illinois budget.
Small credit move leaves Illinois debt three notches away from junk-bond status. The move by the New York-based Moody’s Investors Service places Illinois’ largest tier of debt at Baa1. The “Baa” level is Moody’s lowest investment-grade super-category. Bonds and debt securities within “Baa” can be Baa1, Baa2, or Baa3. “Baa”-rated debt securities must pay higher rates of interest than debts ranked A, Aa, or Aaa. The “Aaa” debt rating of Illinois’ neighboring state, Indiana, is often cited as one reasons jobs are moving from Illinois to Indiana. Even with Thursday’s move, Moody’s Investors Service said Illinois’ credit remains lower than that of any other state in the nation.
In their debt credit notice, Moody’s pointed out factors that could once again place Illinois debt in severe danger of falling down towards junk-bond status. Illinois tax revenues are expected to experience slow revenue growth in coming months, as inflation-pinched consumers are forced to cut back on their purchases of taxable goods and services. Moody’s is looking at both Illinois’ formal debt and its unfunded liabilities, including unfunded pension liabilities.
AGRICULTURE
As farmers get ready for planting, USDA crop report shows excess moisture in fields. The U.S. Department of Agriculture (USDA) crop progress reports are studied closely by farmers, agribusiness, and traders who monitor crop futures. The USDA monitors the amounts of water in Illinois cropland topsoils and subsoils. With continued above-average precipitation, the USDA rated Illinois topsoils as 56% moisture-surplus and rated subsoils at 39% moisture surplus. These percentages are the technical equivalent of what Illinoisans see when they drive past farm fields with standing water. Surplus subsoil moisture prevents farm topsoil waters from moving down towards drainage tiles and the water table.
Most Illinois farmers use heavy machinery to ready their fields for crop planting. These vehicles cannot go into the fields until the water drains and the fields dry out. The USDA report was published on Monday, April 18.
Parallel flooding reports, from the National Weather Service, showed continued floodwater conditions on much of the Illinois River, and on the Kaskaskia River below Lake Carlyle.
COVID-19
Remaining mask mandates lifted with respect to Illinois commuter buses, trains. This week’s move came in response to a federal court decision on Monday, April 18. The decision struck down the authority of the Centers for Disease Control and Prevention (CDC) to impose mask mandates in places of public transportation throughout the U.S. In response to this decision, the arms of the Chicago-area Regional Transportation Authority (RTA) – the train agency Metra, and the bus agencies CTA and PACE – stated face coverings and masks would no longer be required on Chicago-area buses and trains. Public transportation agencies in other parts of Illinois were expected to take similar steps.
The COVID-19 virus continues to evolve into new variants, and Illinoisans who are eligible for vaccination continue to be urged to “get the shot.” Authorities continue to work on developing a safe protocol to vaccinate children under the age of 5, an age group that is not yet eligible for coronavirus vaccinations.
CRIMINAL LAW
Mazzochi: Latest Criminal Charges Prove Action Needed on Red Light Cameras. State Representative Deanne Mazzochi has reiterated that legislative action is essential to curb out-of-control red light camera corruption.
Federal authorities filed criminal charges against former Oakbrook Terrace Mayor Anthony Ragucci on Friday, April 15th. The charges include bribery associated with red light camera company, SafeSpeed. Ragucci was allegedly paid based on revenues the company received from cameras in Oakbrook Terrace and contract renewals with the city. SafeSpeed has been linked to numerous federal investigations against other municipalities and officials.
“We’ve known for years that these charges were coming,” Rep. Mazzochi said. “The Illinois Department of Transportation is well aware of the problems with these cameras, but the Pritzker administration continues to do nothing but drag their feet and refuse to remove these cameras.”
Rep. Mazzochi filed House Bill 4102 to revoke IDOT’s approval of automated traffic law enforcement systems if they’ve been associated with civil or criminal corruption charges involving a state legislator, member of the executive branch with oversight authority on the matter, or a member of local government who held power over its installation. It also allows members of the public targeted by corrupt red light cameras the right to challenge the tickets in court.
“This is commonsense legislation. Residents should not have to pay because officials want to line their pockets, and they should not continue because local governments get addicted to the money,” Rep. Mazzochi said. Yet, despite garnering a number of co-sponsors, “Democratic House leadership killed the bills. Not a single Democratic legislator from DuPage County had the courage to stand up against this public corruption in our backyard,” Mazzochi emphasized.
Mazzochi noted that the multitude of criminal charges involving legislators and local officials confirms that “red light cameras are intrinsically linked to corruption throughout the state. Illinois desperately needs stronger ethics laws to deter endemic corruption like this, but in the meantime my legislation will provide relief to drivers caught up in these schemes. That’s something all Illinois legislators should get behind.”
Rep. Mazzochi plans to refile House Bill 4102 for consideration during the fall veto session. “Hopefully Democratic legislators who previously promised to reform red light cameras in Illinois will actually keep that promise with their vote.”
ENERGY
With motor fuel prices soaring, gas stations ordered to post sticker notices advertising six-month pause in gas tax increase. Under current Illinois law, the already-high price of motor fuel is scheduled to go up every year under a series of step increases in the State motor fuel tax. The tax pays for maintenance and repairs to Illinois roads and bridges, and a continuous and expanding stream of tax money is required to cover the interest and principal on bonds. Much of these debt securities have already been sold to pay for Illinois road work this summer (see “Transportation” section, below).
Illinois politicians are aware that Illinois motorists are angry about record-high gas prices. In much of Illinois, motor fuel now costs well more than $4.00/gallon. In the final hours of the 2022 spring session, the General Assembly’s majority party revealed a convoluted “deal” under which the July 1, 2022 gas tax increase would be “paused” for six months. The new law was passed by the Illinois House at 5 a.m. on April 9. The new law does not make the 2022 gas tax hike go away; instead, the July 1, 2022 tax hike is pushed back six months to create a double hit in calendar year 2023.
A controversial section of the new law will, if it is enforced, require Illinois motor fuel retailers to post stickers on each operating gas pump. The stickers will announce that the gas tax will, for six months, be slightly less than it otherwise would be. As motor fuel and other tax rates are much higher in Illinois than in neighboring and comparable U.S. states, motor fuel retailers oppose being made to post what many consider to be misleading, government-mandated propaganda. The Illinois Fuel and Retail Association, a trade group representing most Illinois motor fuel retailers, has announced plans to sue the J.B. Pritzker administration to stop the sticker mandate and the $500 daily fine for failure to post the notice.
HIGHER EDUCATION
Undergraduates at historic Lincoln College prepare to transfer to new educational opportunities. The announcement that the 157-year-old Lincoln College, located near Interstate 55 in Logan County, will close its doors on May 13 has led to challenging times for students who are in the middle of their higher education. While most members of the Class of 2022 are expected to graduate, many Lincoln College students who have not yet built up a-graduation-level course load are having to undertake the arduous duty of shopping their credit hours around to other schools that will accept them.
Representative Tim Butler took the lead in pushing the other public and private colleges and universities of Illinois to honor Lincoln College credit hours. At least three Prairie State institutions – Eureka College, Illinois Wesleyan University, and Western Illinois University, have offered group-admission deals that include credit-hour transfer arrangements. These institutions are located in Eureka, Bloomington, and Macomb, Illinois, and students who transfer to these institutions will be able to not only move some of their credit hours but will also continue to enjoy the comparatively affordable living costs of Downstate Illinois.
JOBS
Illinois unemployment rate at 4.7% in March 2022. The number was posted by the Illinois Department of Employment Security (IDES) based upon data provided by the U.S. Bureau of Labor Statistics.
In March 2022 the leisure and hospitality sector, which had been hit hard by the COVID-19 pandemic and shutdown orders, continued its strong bounce-back, with this sector employing 87,600 more workers than one year ago. Rising interest rates and shortages of key building products have led, however, to a net drop in Illinois construction jobs. In March, there were actually fewer Illinoisans employed in the building jobs and trades (down 700 year over year), despite an overall red-hot national construction market. Illinois continues to be partly redlined by the home loan industry, with many locations within Illinois not favored for homebuilding construction lending activity. This pattern could be connected to overall continued population declines in Illinois.
TRANSPORTATION
As warm weather approaches, Illinois road construction set to intensify. The job of rebuilding Illinois roads and bridges will reduce traffic lanes, slow traffic, and lead to interactions between construction workers and moving vehicles. Staying safe means obeying slow-down postings and changing lanes, especially when an emergency responder is also on the highway. The “Move Over Law” requires moving over for emergency responders, except when it is unsafe to do so. You are more likely to see a law enforcement officer when you are in or near a construction zone, because it is their job to enforce the work zone speed limits. Moving violation fines are sharply increased in work zones.
To plan ahead, the Illinois Department of Transportation (IDOT) will maintain a map and list of active Illinois highway work zones throughout the 2022 construction season. Illinois electronic highway signs will also be programmed to warn motorists of slow work zones ahead.
O’Hare International Airport moves toward terminal construction. The $8.5 billion project to build and rebuild the passenger takeoff-and-landing structures of the Midwest’s busiest airport is now underway, with a major rebuild of aging Terminal 5 expected to be completed in late 2023. The work, which is financed by O’Hare passengers’ takeoff and landing fees, follows up on the recently-concluded $6 billion rebuild and re-alignment of the airport’s eight runways. Most of these runways are now aligned west to east, enabling simultaneous safe takeoffs and landings.
The Terminal 5 rebuild will be the first stage of this reconstruction project. The terminal rebuild, which will reconfigure takeoff-and-landing gate space to enable more flights into and out of Chicago, will lead to the movement of Chicago-based international jet traffic from Terminal 5 to a new Global Terminal. The Global Terminal will sit on top of what is now the 60-year-old Terminal 2, which will be torn down and replaced. Terminal 1 will get additional “satellite concourses,” which is the phrase airports use for the oval-shaped islands out in an airfield that contain additional passenger gates. The satellite concourses will be connected to the mother terminal by additional tunnels.
At the end of the terminal rebuild project, called “O’Hare 21”, gate capacity will increase by 25% and passenger terminal space will expand by 80%. With almost 9.0 million square feet of space devoted to passenger terminal use, O’Hare will continue to be one of the largest airports in the Western Hemisphere.
SPRING EVENTS
Community events across Illinois this spring. Many of these events are featured on the “Events in Illinois” website by the Illinois Office of Tourism. The scroll starts with ongoing Illinois events, and moves on to events to be held within Illinois on approaching weekends and holidays. Events include music, park festivals, street fests, and more. For example, on Saturday, April 23 motor bikers will honor the life of Illinois’ LCpl. J. Kyle Price, U.S. Marine (KIA 2006), with a memorial ride starting and ending in Mount Vernon, Illinois. The “Events in Illinois” website is financed by proceeds from the hospitality tax paid by guests who stay at Illinois hotels, motels, and resorts. The tax also helps pay for tourist brochures, maps, and signage.