It’s Wednesday, so we are half-way through the week. Below is the latest news and updates for you to look over. We hope all of you are doing well during this first full week of Phase 3.
Transportation Bill Announced
A new surface transportation bill was unveiled today by House Democrats and plans are to sell it as a COVID stimulus bill, in hopes of getting Republican support. Illinois and its transportation agencies would get a combined $10.2 billion in regular annual funds for five years, a 35% hike from the last five-year bill.
The increase for road programs matches that overall hike: 35%. The Chicago Transit Authority, Metra and other agencies would get a 57% hike. Illinois roads would get $10.25 billion over five years, compared with $7.53 billion in the last bill. Transit would get $4.7 billion, up from $2.99 billion. Metra also would gain by making Amtrak-owned stations with commuter rail operations, like Union Station, eligible for an expanded $1.4 billion annual pot of money for station improvements.
Another local winner in the bill is the continuing of the Create program to build bridges and tunnels so street traffic is not held up every time a train comes by. The bill would give Illinois $2.5 billion over five years to pay for grade separations and penalize railroads that block intersections for more than 10 minutes. This would all be considered an economic stimulus since there is no program marked to pay for this.
Months after Congress approved $175 billion in emergency aid to health providers, the administration has yet to pay out the majority of the funds (nearly $100 billion) due to a number of setbacks and uncertainty on the best way to disburse. At least 1,900 health centers across the country have temporarily closed already, with a growing number of providers furloughing staff to keep afloat. What federal aid has gone out has largely missed those that care primarily for the poorest and most vulnerable Americans.
Main Street Lending Program Update
The $600 billion Federal Reserve loan program designed to offer a lifeline to tens of thousands of struggling U.S. companies is heading for trouble before it even gets under way. Some potential borrowers complain that the Main Street lending program imposes interest rates that are too high (5-15%) and requires businesses to pay back loans too quickly (4 years).
The Main Street program is supposed to fill a gap for companies that are too big for the government-backed small business loans (EIDL and PPP) but not large enough to warrant giant bailouts like the airlines. Targeted businesses with fewer than 15,000 employees or less than $5 billion in annual revenue can receive four-year loans of $500,000 or more that they do not have to start paying back for a year.
After two months of waiting on the program to open, companies have gone looking for alternatives. This has forced layoffs, furloughs, and potential closings just like the small business funding that did not get to those most in need quick enough.
Latest on the Next Relief Bill
Senate Republicans are voicing deep skepticism about passing another round of $1,200 rebate checks as they contemplate the next and possibly final stage of coronavirus relief legislation. Their message is that they are more focused on reforming the SBA’s Paycheck Protection Program, providing more money for cash-strapped state and local governments, unemployment benefits, and boosting benefits for Social Security recipients.
Cocktails to Go Signed into Law
Governor Pritzker signed the bill into law yesterday afternoon that will allow bars and restaurants to sell cocktails to go. Local municipalities may elect to prohibit or set restrictions on the sales and delivery. Licenses retailers should check with the local liquor commissioner to make sure they are following proper local protocol. Additionally, the legislation provides that:
- All state liquor licenses are automatically extended through December 31, 2020.
- No renewal fees or late fees will be charged until December 31, 2020 (Renewal fees will be charged if a licensee renews before December 31, 2020.)
- Retail licensees shall not be deemed to be delinquent in payment until 30 days after the date on which the region in which the retail licensee is located enters Phase 4 of the Governor’s Restore Illinois Plan (different state regions may enter Phase 4 at different times.)
Federal Borrowing for Illinois
Illinois is likely to become the first state to borrow from the Federal Reserve’s $500 billion lifeline for local governments. The state is planning to borrow $1.2 billion from the central bank for one-year to cope with revenue losses brought on by the economic shutdowns caused by the pandemic and the delay of its annual tax-filing deadline.
Illinois continues to face a steep penalty to borrow. That has left it among those that could benefit from the federal loans, since the penalty the central bank is charging is less than it would face in a public debt sale.
Illinois in April lowered its fiscal 2020 revenue projections by $2.7 billion and its estimates for 2021 by $4.6 billion after the stay-at-home order severely slowed economic activity. The $138 billion of unfunded pension liabilities, lack of savings, and $7 billion in unpaid bills has left our state with a bond rating one step above junk as we mentioned yesterday.
Finally, one more reminder about our next Virtual Conference tomorrow at 11 AM. Tomorrow’s session will focus on the Illinois Special Session recap. We will be joined by Senator Jennifer Bertino-Tarrant and Representative Natalie Manley. You can register to join us here: http://jolietchamber.chambermaster.com/events/details/2020-webinar-june-4-il-special-session-recap-5909
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry