5 issues to watch on the new ‘Safe Roads Amendment’
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Questions swirled Wednesday around the decision by nearly 80 percent of Illinois voters to approve the “Safe Roads Amendment” to the state constitution, with Moody’s Investor’s Service calling the move “credit negative.”
Moody’s warned that the Safe Roads Amendment “cuts off the state’s ability to draw on about $3 billion in annual transportation revenue” that could help relieve “fiscal pressure” caused by hefty state pension contributions and reduced state income taxes following a January 2015 rate cut.
The amendment requires that all transportation-related fees and taxes be spent only on transportation-related projects, including aging infrastructure such as roads and bridges. Proponents say that in fiscal year 2015 alone, $520 million in state transportation revenue was “swept” away to other purposes.
The chief sponsor of the bill to put the measure on the ballot said the amendment creates pressure on the Legislature to come up with a source of revenue to replace the more than $6 billion in transportation revenue over a decade that has been spent on non-transportation needs.
“It forces us to use this money for what we promised the people it would be used for — transportation purposes,” said Sen. William Haine (D-Alton).
“Moody’s is saying we gotta find another source of revenue, and I’m saying that’s what we should do,” Haine added.
Some issues to watch in the days ahead:
Q. When does the amendment take effect?
A. After the State Board of Elections certifies the vote tallies on the amendment, probably on Dec. 5, and Gov. Bruce Rauner issues a proclamation declaring the results.
Q. What do the comments by Moody’s mean?
A. Moody’s declaration of “credit negative” does not connote a rating or outlook change; it’s merely an indication of the impact of the amendment on credit factors.
Q. How could Chicago be affected?
A. The city’s budget director has estimated that Chicago might lose discretion over at least $250 million a year in local taxes under the amendment. As a result, the city is currently discussing the measure with legislators, a City Hall spokeswoman said.
Q. What can be done about Chicago’s concerns?
A. Haine said “the sky is not going to fall” now that the amendment passed. He said its legislative intent was thoroughly discussed on the Senate floor but he is open to working on a bill to clarify its language for those with concerns.
Q. Will any state funds diverted away from transportation be affected this year?
A. Proponents say no state funds will be affected this calendar year because no transportation funds were diverted to other purposes in the partial budget that ends this calendar year. Rauner spokeswoman Catherine Kelly said “the administration is reviewing the amendment and how it will impact our state agencies” but its passage highlights the importance of passing “a balanced budget with meaningful reforms.”