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During the last couple of days of the spring session of the General Assembly, lawmakers took important steps toward repairing some of the economic damage that has been done in recent years. These actions included repairs to our jobs climate, as well as repairs to our transportation infrastructure. I believe these actions will help move Illinois in the right direction.
So what exactly did we accomplish?
House Republicans fought for and won six crucial reforms that will help our state reverse the tide of job loss and out migration of the recent past. Our jobs and infrastructure package was supported by the Illinois Chamber of Commerce, Illinois Manufacturers Association, Illinois Petroleum Council, Illinois Retail Merchants' Association, National Federation of Independent Businesses, as well as the local government officials who are part of the Illinois Municipal League and the Township Officials of Illinois. The Illinois Farm Bureau was neutral on the proposal.
Senate Bill 689 contained each of these important reforms. First was the creation of the Blue Collar Jobs Act which will help us attract large-scale construction projects. The Blue Collar Jobs Act creates new tax credits for companies who make major capital improvements in Illinois. It will help to create construction jobs and permanent jobs in the facilities once they are completed. Unlike some other poorly-managed tax credit programs in the past, the Blue Collar Jobs Act tax credits will only become available once the project has been completed.
We also created a Data Center Tax Incentive for businesses looking to locate a data center in Illinois. These facilities create not just construction jobs but also long-term, high-paying tech jobs. Typically, these data centers are located in rural areas, just like many parts of the 106th District, due to the availability of land. In recent years, some communities in Illinois have been in the running for these centers, but were ultimately unsuccessful because other states offered incentives that we did not. Now we are better able to compete.
To help manufacturers create jobs here, we permanently reinstated the Manufacturer's Purchase Credit, which will spur investment in manufacturing in Illinois. This is a tax credit which previously existed, but was ended a few years ago. We also ended the antiquated "franchise tax" which was simply a tax on having a business in the state of Illinois, costing small businesses about $50 million every year.
The last two reforms were not bills that were enacted, but instead bad ideas which were stopped. One was a proposed cap on the "Retailer's Discount", which would have cost small businesses tens of millions of dollars a year. The other was SB 1407, which would have imposed a heavy-handed set of wage and regulatory requirements on facilities like ethanol plants or refineries. It was so anti-business that when it was introduced a company actually reversed its decision to build a plant in western Illinois and moved out of state. Through our negotiations we were able to stop this bill in its tracks.
These pro-jobs reforms will help stop the damage that has been done to Illinois' economy in the past, and start making the state more attractive to those who would create jobs here. When combined with the road construction and infrastructure funding bill, which will make our road system safer and more reliable, we have helped to lay the groundwork for an economic recovery in Illinois. But there is still a lot to do.
One thing I have been asked about at the many civic meetings I have attended in the past few weeks is: how can we be sure that the money from the infrastructure bill will get to our local roads and bridges.
The answer is: because of a 2016 amendment to the state Constitution known as the "Lockbox."
Too often in government we see taxes or other funds get raised for one purpose, only to be swept away for another. But now, with the passage of a jobs-and-infrastructure program and the funds to pay for it, we have a Constitutional guarantee that funds earmarked for transportation will actually be spent on transportation. This comes about due to the "Lockbox Amendment" (Article IX, Section 11).
The transportation lockbox came about after years of frustration over road funds being swept in order to finance other state projects, while our roads continued to deteriorate. Maintenance on state highways was deferred for years; reaching more than $30 billion in needs this year. That was why the capital infrastructure bill was necessary this year. Thanks to the Lockbox, funds collected from motor fuel taxes must be spent on transportation: they cannot be diverted into other programs or agencies. The Auditor General will audit the account every year to ensure that funds are being used properly.
A large portion of the revenue from the motor fuel tax is sent back to our local cities, counties and townships, all of whom will see a substantial increase in transportation funding this year. The capital infrastructure bill we passed a couple of weeks ago splits the new revenue 80-20 between roads/bridges and transit. Of the portion set aside for roads and bridges, 60% stays with the state, and 40% goes to local governments. Municipalities will get 49.1% of the local government funding, and townships will receive 15.89%. The remaining 35.01% will be split among the counties, with the majority of it going to counties outside of Cook. Under the Lockbox Amendment, we have a guarantee that those funds; as well as those in the hands of the state; will go where they are needed: to fix our local transportation infrastructure.
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