Illinois’ Own Failed Stimulus Loses Its Funding
Back in January of 2009, hyped up on stimulus-feva, Illinois passed a $31 billion capital bill called “Illinois Jobs Now”. Today, thanks to the owner of the Chicago Blackhawks and an Illinois Appellate Court a lot of the funding for it is now going…going…gone.
The Illinois Court of Appeals has ruled the General Assembly acted unconstitutionally when it approved funding sources for the state’s $31 billion capital construction program.
The lawsuit that led to Wednesday’s ruling was filed by W. Rockwell Wirtz, better known as Rocky Wirtz. His family is best known as owners of the Stanley Cup Champion Chicago Blackhawks. The foundation of their financial fortune, however, is Wirtz Beverage Illinois, a distributor of alcoholic beverages.
Used to getting their way in Springfield, the Wirtz family was infuriated when the legislature ignored their objections to the liquor tax.
A spokesman for Illinois House Speaker Michael Madigan estimated that the ruling eliminated at least 40 percent of the funding sources devoted to the state’s giant capital construction program.
The decision is available here.
Ultimately this is going to cause some big problems, largely for the same reason that this was found to be unconstitutional. For some stupid reason when the package was passed the spending and revenue portions were put in separate bills. The revenue portion, the part that was found to be unconstitutional, was found to be so as it violates Illinois’ Single Subject Rule. The standard for this rule is whether there’s a “natural and logical” connection between the different aspects of a bill. Had the spending and revenue portions been part of the same bill, the funding probably could have been sold as the natural and logical connection of funding the capital bill. Instead, the only thing that connects the provisions in a stand-alone revenue bill is “revenue”, which has already been ruled to be too broad.
This also means that the spending bill is still law. If Madigan’s projections of this cutting 40% of the capital bill’s funding, that would mean there is now $12.4 billion is newly unfunded spending. This would erase all of the benefits to the deficit from the tax hike, and add an additional $5 billion to it. In other words, there is going to have to be another tax hike. Like, right now.
Considering the reaction to the last tax hike, good luck with that.
A lot of the problem could be dealt with by a stand-alone video gambling bill, but that’s going to be a tough sell. Video poker, aka “the crack cocaine of gambling”, was a big issue in the last election in just about every Republican-leaning and centrist area of the state. Most of the new guys ran against video gambling, and the survivors typically ran away from their vote and would be loathe to immediately show that those tacts were bullshit. It could probably pass, but it’d be a lot rougher than it was last time (and it wasn’t pretty last time).
On top of that, back then the proponents of the package had the myth of jobs and stimulus and whatnot to help sell the bill. Now they can’t. Any stimulative effect has long since been priced in, and just as the conservatives expected, Illinois still sucks. So instead of buying jobs, growth and stability, now it’s just staving off a budget collapse to pay for annoying road construction.
In short, get your popcorn ready.
- Illinois Plan for Pensions Questioned (nytimes.com)
- Illinois Voter Restoration Project Supports Illinois Appellate Court Ruling on Rahm Emanuel Residency (chicagonow.com)
- Christie Says He’ll Go to Illinois to Lure Jobs to New Jersey (businessweek.com)
- Emanuel Ballot Appeal to Be Heard by Illinois Supreme Court (businessweek.com)
- Wirtz Dispute Over Liquor Empire (chicagoist.com)
- Wirtz Picks Up Bacardi From Competitor (chicagoist.com)
- Illinois Confirms Inquiry by SEC (online.wsj.com)