Pritzker rewrites Rauner plan on spending millions from Volkswagen settlement

Environmental groups praise new focus on electric vehicles after governor proposes spending almost $90 million windfall from automaker’s emissions scandal.

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Illinois received more money from the Volkswagen emissions scandal legal settlement than any other Midwest state.

Gene J. Puskar, AP Photos

Gov. J.B. Pritzker is proposing to spend nearly $90 million from a legal settlement over the Volkswagen emission scandal to pay for more electric vehicles and infrastructure — largely by converting more public transit and school buses — in Chicago and elsewhere.

Pritzker’s environmental agency rewrote a state plan that was originally put together by former Gov. Bruce Rauner’s administration. Influenced by industry, Rauner favored awarding state grants to replace old diesel-engine trains, boats and other equipment with newer ones that were also diesel-fueled. That proposal infuriated environmental organizations.

Pritzker’s revised plan drew praise from those same groups that noted electric vehicles are the best way to cut down on air pollution, improve health and fight climate change.

“There are huge opportunities here that are new and exciting and can benefit public health,” said Susan Mudd, a lawyer and senior policy advocate for the Environmental Law and Policy Center. 

The state originally won about $109 million from Volkswagen as part of a legal settlement over the carmaker’s emissions cheating scandal discovered by U.S. officials in 2015. Volkswagen was caught having installed software in diesel-fuel cars that helped fool air emissions tests, which meant the vehicles were polluting far more than advertised.

That led to actions ending in billions of dollars of fines and civil settlements, including money for individual states to help reduce air pollution. Because Illinois residents had purchased so many of the cars in question, it had the largest haul in settlement money in the Midwest.

The money prioritizes the Chicago area and the Illinois side of the St. Louis metropolitan area because of the heavy air pollution around those communities. Money will be distributed based on applications from those and other areas.

Under the Pritzker proposal, up to 45% of the remaining money ($88.6 million) will fund all-electric public transportation, up to 38% will go toward electric school buses and 15% will go to light-duty electric charging infrastructure. The remaining 2% pays for administrative costs.

In a statement, Pritzker called it a “critical step forward in protecting our environment and building a greener transportation sector.”

The state is accepting public comment on the proposal through June 21. It will send a final report to a national trustee that approves spending plans for the Volkswagen settlement. With a newly published draft report, Pritzker is sending a signal that electric vehicles are going to be a big part of the environmental and public health agenda for the state going forward, advocates said.

“This has been a drumbeat for at least four years,” said Brian Urbaszewski, director of environmental health programs at the Respiratory Health Association. “You need to prioritize and get zero-emission vehicles with the limited amount of money we have.”

He noted that multiple clean energy bills introduced in Springfield this legislative session and President Joe Biden’s climate agenda all emphasize electrification of vehicles.

“Most clean energy bills recognize we need to accelerate this,” Urbaszewski said.

Brett Chase’s reporting on the environment and public health is made possible by a grant from The Chicago Community Trust.

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