February 27, 2015
Alongside his first operating budget proposed for the State of Illinois, Governor Bruce Rauner also recommended a capital budget for FY2016 that proposes shifting previously vetoed spending authority to pay for delayed maintenance at State owned facilities across the state.
As previously discussed here, former-Governor Pat Quinn vetoed the remaining $250 million from the FY2015 capital budget for additional work at the Capitol Complex in response to criticism that restorations at the Capitol Building were too lavish given the government’s ongoing financial crisis. The appropriation was part of the original $31 billion Illinois Jobs Now! capital spending program first approved in FY2010 and reauthorized each year since its inception. More than $50 million in other improvements to the Capitol have already been spent but the $250 million remained authorized but unfunded until vetoed last year.
Now as part of the recommended FY2016 capital budget, newly elected Governor Bruce Rauner is proposing reinstating the $250 million of vetoed funding but as a lump sum to pay for delayed maintenance at State owned facilities across the State.
Similar to his request for extraordinary powers to reallocate funding to address the FY2015 budget deficit, the Governor is also seeking broad authority to use the $250 million to address areas of critical need at veterans’ facilities, mental health centers and correctional facilities.
Since the original funding was included in the ongoing capital expenditures, the Governor proposes the reallocation is affordable within the existing State capital budget. It is unclear if the General Assembly will grant the Governor the ability to make either the operating budget reallocations or the changes to the capital spending. There are conflicting reports from the Governor and legislative leaders on the negotiations over the FY2015 budget and little discussion has taken place publicly about the proposed FY2016 capital budget.
The proposed FY2016 capital budget totals $19.0 billion in recommended spending. This includes $3.3 billion of new appropriations and $15.6 billion of previously approved spending authority proposed for reauthorization. More than $12.0 billion of the proposed FY2016 capital budget is spending for the Illinois Department of Transportation including the annual road program for ongoing surface transportation improvements (roads, bridges and mass transit).
The capital budget is funded by $10.4 billion in State-source pay-as-you-go funding, $7.7 billion in State bond funds and $857.9 million in pay-as-you-go funding from the federal government. It should be noted that much of the pay-as-you-go funds available to the State are made up of balances from bond issuances in previous budget years.
According to the proposed budget, the Capital Development Board would manage the additional $250 million in deferred maintenance funding and prioritize facilities that house people for 24 hours a day seven days a week. The projects would focus on repairs that ensure health, safety and code compliance. Roof repairs and mechanical systems would be also be a priority. Although some specific projects are listed as examples of facilities in need of critical repairs, the appropriation would be a lump sum available for the Governor to deploy as critical projects are identified.
Meanwhile, State Representative Scott Drury has advanced a bill to require a capital improvement plan be developed for all State facilities. House Bill 196 establishes the Capital Improvement Planning Act.
Although Illinois approves new and reappropriated capital spending on an annual basis, the State does not base these expenditures on a comprehensive capital improvement plan. Unlike operating budgets, which mostly require that all appropriated funds be spent in the same year they are approved, capital appropriations must be reauthorized over multiple years as planning, engineering and construction of capital investments commences. The Civic Federation has long urged the State to develop a comprehensive capital plan to ensure the limited State resources available to fund capital projects are used efficiently to address its most pressing needs.
The National Advisory Council on State and Local Budgeting recommends that all governments develop a five-year capital improvement plan that identifies priorities, provides a timeline for completing projects and identifies funding sources for projects.
HB196 calls for the Governor’s Office of Management and Budget to provide an inventory of facilities owned by the State of Illinois, which is updated at least once every three years. The bill calls for establishing a set of criteria used to evaluate capital improvement needs for State facilities and a five-year need-based estimate for state facility investments.
According to the National State Budget Crisis Task Force Report on Illinois, it will cost Illinois more than $300 billion over the next 30 years to address current infrastructure needs including roads, bridges, aviation, government facilities, mass transit, water systems and public education facilities. HB196 applies only to capital projects that repair, renovate or build new state facilities. It also does not apply to primary and secondary public education facilities, infrastructure-related grants to other governments or the transportation infrastructure project detailed in the State’s road plan. Despite this limitation, the new capital plan could be an important first step toward much-needed comprehensive capital improvement planning for the State of Illinois that incorporates all statewide infrastructure needs and sources of available funding.