Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Thanks to our five state legislators that joined us for lunch yesterday to talk about what happened in Springfield during the last session. Today’s Roundup has info on both the federal and state levels. Enjoy your weekend!
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Congress to Act on Reducing Gas Prices?
House Democrats intend to move in the coming weeks to pass legislation designed to rein in skyrocketing gas prices, the head of the House Democratic Caucus said Wednesday. Rep. Hakeem Jeffries (D-N.Y.) did not commit his support for a federal gas tax holiday, which has divided Democrats on and off of Capitol Hill. But he said suspending the gas tax is one of “many” proposals under consideration by party leaders, who have addressed the issue with some urgency in closed-door discussions in the 24 hours since the House returned to Washington from a long Easter recess.
“It’s part of the discussion, and the discussion is ongoing,” Jeffries said of the gas tax holiday. “We are definitely going to act to try to address the geopolitical issues that relate to gas prices being where they are [and] act in terms of some of the supply chain challenges.”
High gas prices have increasingly become a political liability for President Biden and the majority Democrats as they fight against long odds to keep control of the House in November’s midterm elections. This week, the average cost of a gallon of gas was $4.21, according to the Energy Information Administration, an increase of roughly 43 percent from a year ago.
Late last month, just before the long recess, Speaker Nancy Pelosi (D-Calif.) had rejected the idea of such a suspension. Pelosi warned that there’s no way to ensure that gas companies would pass the savings on to consumers. But the issue is clearly on the Democrats’ radar this week. Pelosi and Senate Majority Leader Charles Schumer (D-N.Y.) reportedly huddled in the Capitol on Tuesday in search of ways to bring down the price at the pump. And Jeffries said the issue was front-and-center during closed-door meetings of both Democratic leaders, on Tuesday, and the full caucus Wednesday morning.
Biden and other Democratic leaders have placed much of the blame for the high costs on Russian President Vladimir Putin, whose invasion of Ukraine in February disrupted the fuel trade around the globe and led to an immediate spike in prices at the pump. Republicans have rejected that argument, saying Biden bears the blame for refusing to expand oil and gas drilling domestically.
Democrats are also pointing fingers at the nation’s oil producers, urging them to drill on lands already approved for that purpose — a charge amplified by Jeffries on Wednesday. “It would be a useful thing if the oil companies made a decision to actually lean in on the permits that they currently have to do something about the supply and demand challenges instead of being more concerned with rewarding their shareholders — lining their pockets to the detriment of everyday Americans and the American consumer,” Jeffries said. “But we’re going to act.”
Jeffries did not specify a timeline to consider legislation, but suggested the aim was to stage a vote before the end of May, when Congress will recess for a long Memorial Day holiday. “The sooner we can get it done the better — hopefully over the next few weeks,” he said.
US GDP falls in first quarter, but not as worrisome as may look
The U.S. economy retracted slightly in the first quarter as a rush of imported goods and fading fiscal stimulus led to a decline in gross domestic product (GDP), according to data released Thursday by the Bureau of Economic Analysis.
U.S. GDP shrank at an annualized rate of 1.4 percent during the first three months of 2022, according to the bureau’s first estimate of first quarter economic growth. Economists expected U.S. GDP to have fallen by an annualized rate of 1 percent — the first decline in economic growth since 2020.
“The first GDP contraction since the recession ended is sure to ignite fears that the economy is stalling out but on closer inspection, the report isn’t as worrisome as it looks,” wrote Lydia Boussour of Oxford Economics in a Thursday analysis.
“Beneath the weak headline print, the details of the report point to an economy with solid underlying strength and that demonstrated resilience in the face of Omicron, lingering supply constraints and high inflation.”
Consumer and business spending remained strong through the start of the year, a positive sign for the U.S. economy as it faces headwinds from inflation and pandemic-related supply shocks. But that spending helped fuel a surge of imports and a decline in business inventories, both of which detract from GDP. The expiration of pandemic aid programs, declines in government spending and a drop in exports also pushed the economy slightly backward on the whole.
“The economy is expanding at such a brisk pace that Americans turned to [external] sources to meet demand,” said Joe Brusuelas, chief economist at audit and tax firm RSM. “This is what an overheating economy looks like,”
The drop in GDP comes amid growing concerns about a potential recession as the Federal Reserve races to fight inflation with a series of interest rate hikes. The Fed is aiming to raise rates fast enough to cool off the economy and the rapid inflation seen for more than a year without stopping economic and job growth all together.
The decline in GDP growth may not yet be a cause for alarm, according to some economists. Personal consumption expenditures, a measure of consumer spending, rose at an annual rate of 2.7 percent in the first quarter, fueled by a 4.3 percent jump in spending on services and 4.1 percent increase in spending on durable goods.
Much of that spending, however, flowed overseas through higher purchases of imports, fewer exports and dwindling inventories. Exports, which add to GDP, fell at an annualized rate of 5.9 percent, while imports surged by 17.7 percent — the second consecutive quarter of 17 percent import growth or higher.
“Don’t panic. This is not the start of a recession,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a Thursday research note. “The weakness in GDP growth was due to wild components.” Private domestic investment, a sign of businesses expanding their operations, rose 2.3 percent, with a massive 15.3 percent increase in spending on equipment. Final sales to domestic purchasers, which doesn’t reflect trade flows, also rose 2.6 percent annualized on the quarter, up from 1.7 percent at the end of 2022.
Sturdy consumer and business demand could help propel what has been a resilient U.S. economy through several challenges, including rising inflation, the war in Ukraine and supply shocks driven by pandemic-related lockdowns. The U.S. economy added 1.7 million jobs during the first quarter despite the decline in GDP, and most economists believe the country will end the year with better-than-average growth.
Fiscal Year 2023 State Budget Includes Largest Investments in Higher Education in Decades
Higher education leaders across the state are celebrating the comprehensive FY 2023 state budget recently passed by the Illinois General Assembly and signed by Governor JB Pritzker on April 19, which includes a historic higher education budget of $2.24 billion – representing a $248.5 million increase from last year and the largest increase in over 20 years. This budget will help ensure Illinois continues to make meaningful progress towards creating an equitable, sustainable higher education system that provides broad paths to a prosperous future for every learner, leader, and community in our state.
Among the highlights in the FY 2023 state budget are a $122 million increase in the state’s need-based student grants Monetary Award Program (MAP), a $54.8 million (5 percent) increase in funding for public universities, and a $13.2 million (5 percent) increase in funding for community colleges starting in the current fiscal year and continuing into FY 2023.
“We know access to education can change the trajectory of a student’s life, families’ lives, and their communities,” said Lt. Governor Juliana Stratton. “Our administration is committed to opening doors for learners and ensuring they and our institutions of education are supported, and this budget reflects that. We are building the vision for affordable, equitable education.”
This historic investment in MAP is the largest ever and moves us closer to reaching our goal of $1 billion in MAP funding in 10 years. These crucial funds will create more opportunities for students attending community colleges by expanding MAP eligibility to over 2,000 short-term credit-bearing certificate programs not previously eligible for financial aid. Expanding eligibility for MAP grants will also help meet the needs of Illinois residents on their journey to economic empowerment, regardless of whether their path is job training, an associate degree, or a bachelor’s degree.
Additionally, the budget includes an increase of $2.3 million for the Minority Teachers of Illinois (MTI) scholarship to attract more teaching candidates of color to high-need schools, and an increase of $535,000 for the Diversifying Faculty Initiative to increase minority faculty.
The budget also includes important investments for recruitment and retention efforts in health care: $25 million for the Pipeline for Advancement of the Healthcare (PATH) Workforce, a new program to expand the health-care workforce through the state’s community college system; $10 million for the Behavioral Health Workforce Education Center, a new partnership with the Illinois Department of Human Services and higher education to expand the number of behavioral health-care workers; $6 million for new scholarship and loan repayment programs for school social workers; and $5 million for the new Community Behavioral Health Care Professional Loan Repayment Program. These efforts will increase the state’s health-care workforce as we continue to recover from the effects of the COVID-19 pandemic.
Also noteworthy is the one-time $230 million payment which will eliminate the estimated unfunded liability for the state’s pre-paid tuition program, College Illinois!®. These funds will bring immediate relief and comfort to the nearly 25,000 contract holders who have faced uncertainty about the state’s ability to meet its fiscal obligations to participating students and families. The payment will also save the state $75 million over the long term.
Illinois’ roads, bridges and water systems remain subpar, but state and federal funding offer optimism
The number of Illinois bridges in poor condition has increased over the last four years and a quarter of the state’s water lines are tainted by lead, according to the latest infrastructure report card from the Illinois Section of the American Society of Civil Engineers. But despite the state’s third consecutive below-average overall grade of C-minus in the quadrennial report, massive investments from the state and federal governments led the authors to conclude that “fortunately, the future is bright.”
“This report card demonstrates how proper and consistent funding can produce more jobs, safer communities and put more money back in taxpayers’ wallets,” said Andrew Walton, president of engineering group’s Illinois section, in a news conference at Union Station. “These investments will also help Illinois capitalize on our geographical advantage, which in turn will create and promote growth for our state’s economy and citizens.” The engineering group completes similar report cards for 36 states, and Illinois was one of 15 to get an overall grade of C-minus, with six other states getting a D-plus or worse.
Across 11 infrastructure categories, the state maintained or improved its ranking in all but one category, its drinking water score, which fell to a poor rating. The report introduced a grade for stormwater infrastructure for the first time, assigning Illinois a poor grade because of its aging and undersized system.
The report found 2,405 bridges in Illinois to be in poor condition, up from 2,303 bridges in the 2018 report. The analysis notes that 70% of Illinois bridges in poor condition are owned by municipalities and counties, suggesting a need to address the backlog in local maintenance.
Already in the works is a $1.2 billion reconstruction of bridges and roads in a 12- or 13-mile stretch of Interstate 80, from a couple miles west of the Interstate 55 interchange, all the way to the Des Plaines River, said Illinois Transportation Secretary Omer Osman. A project like that will increase the standards of several bridges and roads, extending their life expectancies by “hundreds of years,” Osman said.
The number of state-maintained highways in excellent condition rose 5.2% in 2020 compared to the previous year, but 18.6% of highways were rated poor, according to the report. Also, congestion around the Chicago area still makes trips about one-third longer during peak travel times.
The state’s water infrastructure remains one of the biggest problems. More than 1 million of the state’s 4 million drinking water service lines have been flagged for containing levels of lead or lead solder, according to the report, one of the largest shares of lead service pipelines in the nation. “We have a lead problem, a lead service pipe problem,” said Patrick Lach, lead author of the report. “That is a major safety issue that we are concerned about with our citizens who have those service lines.”
A federal investment of $288 million this year, solely to improve Illinois’ water infrastructure, should help propel the state’s replacement of lead service lines, the report said. That must be coupled with workforce development, especially for water treatment operators, it said.
Gov. J.B. Pritzker’s “Rebuild Illinois” plan, an ongoing six-year, $45 billion effort to improve state roads, bridges, rails and public buildings, along with the state’s allotment from the $1 trillion federal infrastructure plan President Joe Biden signed into law in November, signal a “new era” for Illinois infrastructure, Walton said.
Rebuild Illinois, from 2019, invests $25.3 billion over six years into upgrading the state’s roads and bridges. That includes $561 million for reconstructing the Interstate 190 Kennedy Expressway near O’Hare and $25.4 million to improve the bridge under the Old Post Office.
Illinois is also slated to receive nearly $1.4 billion in federal funding over five years to upgrade its deteriorating bridges. That’s only a portion of the expected total of more than $17 billion the state can expect for infrastructure improvements.
The earmarked investments ensure money will continue flowing into the state’s infrastructure for the next several years, but experts urged officials to look beyond the current investments to assess how to ensure sustained revenues to maintain roads.
Revenues from fuel taxes are expected to fall, both in the short term with Pritzker’s six-month freeze on the gas tax, as well as in the future as the auto industry is shifting toward electric vehicles, according to the report.
Despite the stagnant overall grade, state Sen. Don DeWitte, a St. Charles Republican and minority spokesperson on the Senate Transportation Committee, said “the needle is moving up.”
“These investments are showing positive progress in the areas of roads, bridges, air and rail systems in Illinois that not only bring these long-delayed improvements into safer states of good repair, but will maintain these foundational infrastructure investments for further expansion and system upgrades, to maintain Illinois’ status as the transportation hub of the nation,” DeWitte said.
Downtown Joliet Parking Study Survey
The City of Joliet is in the process of conducting a Downtown Parking Study to help improve the management and operation of parking and mobility Downtown. WGI was hired by the City of Joliet to conduct an assessment of the downtown parking area. As part of this assessment WGI has prepared a parking survey for downtown parking users. The more feedback we get, the more information we can provide in order to improve our downtown parking. Please consider all the following topics:
- Parking conditions
- Parking policies
- Parking rates
- Commuter parking operation
- Parking enforcement
- Parking and wayfinding signage
- Employee parking options
- Parking technology
- Pedestrian and bicycle infrastructure
This 5-minute survey will provide valuable feedback to help in this effort. All responses are anonymous. We appreciate you taking the time to help with this effort. After you complete the survey, you can be entered into a raffle to win Slammers baseball tickets. You will just need to provide your email address, which is optional.
You may access the survey by clicking here: https://www.surveymonkey.com/r/CNCGT8V
Executive Vice President
Joliet Region Chamber of Commerce & Industry