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 bipartisan 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.
With the additional road funding program, the majority of about 200 projects are expected to involve resurfacing short segments of roads throughout the state, as well as some bridge repairs. The capital funding infusion includes $1 billion for state roads and bridges and $100 million for local governments.
With the additional funds included in House Bill 3794, the Fiscal Year 2015 Road Program will total $3 billion. Many lawmakers said that while this is a needed boost to the annual program, it is clearly a piecemeal approach to a long-term problem needing a long-term solution.
The $100 million in local assistance 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 Fiscal Year 2016, and peak in Fiscal Year 2018 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 (Senate Bill 3224) also signed into law.