IL: Gov. JB Pritzker skeptical about House Democrats’ tax and fee plans to address public transit

Gov JB Pritzker on Wednesday poured cold water on taxing streaming services, billionaires, adding fees to tickets for large sporting events or concerts and allowing speed cameras to populate Chicago’s suburbs just hours after Illinois House Democrats proposed the sweeping changes to overhaul the Chicago region’s mass transit systems.

Pritzker, who has encouraged lawmakers to come up with a plan to prevent the Chicago Transit Authority, Metra and Pace from falling off a so-called fiscal cliff, said the final bill lawmakers want to pass by the end of the fall legislative session this week “isn’t going to look like what the House has put forward.”

The governor’s lack of enthusiasm for the 1,000-plus page bill introduced by House Democrats late Tuesday night includes a menu of new taxes to pay for some $1.5 billion in transit funding that advocates and some lawmakers say is needed to prevent layoffs, service cuts and fare increases along bus and train lines run by the three transit agencies.

One proposal buried in the middle of the bill would effectively allow Chicago suburbs to install speed cameras, which are currently allowed only in the city of Chicago. The plan calls for gathering 50% of the gross revenue from any speed cameras erected in suburban collar counties and turning it over to a new transit oversight board. But Pritzker said he’s against that revenue-generating idea.

Similar traffic cameras that catch red light violators have been embroiled in corruption problems for years, and the governor seemed to flick at that issue as he talked down the idea of allowing speed cameras to proliferate in the suburbs.

“We’ve had so many problems with speed cameras in this state. There’s been corruption around them. Honestly, I think we need to take a pause,” Pritzker said.

Although the governor was critical of the latest ideas, neither he nor members of his administration have publicly proposed or backed any specific revenue-generating ideas to address the public transit crisis.

Democrats who have a supermajority in the House proposed a 7% amusement tax that includes streaming services such as Netflix, a $5 surcharge per ticket on large events such as concerts and sports competitions and a 4.95% tax on unrealized gains on billionaires’ assets — known in shorthand as a billionaire’s tax, according to lawmakers and the bill. The proposed legislation also slightly increases certain sales tax rates, including raising taxes on some food sales in Cook County by 0.25 percentage points.

“I have to say, they sprung a whole bunch of things that have never been seen before. So it’s very hard to evaluate in a short period of time. I think there’s a whole lot of work the legislature still needs to do,” Pritzker said during an unrelated news conference outside of Taylorville, about 30 miles from Springfield. “There’s got to be a lot of discussion between the House and the Senate in order to cobble the final bill because it isn’t going to look like what the House has put forward.”

Pritzker said any new tax proposals presented by the legislature to figure out how to pay for transit need to be run through the Illinois Department of Revenue “to figure out how you might go about collecting the tax or what it would actually yield.”

On the so-called billionaire’s tax, Pritzker, who himself is a billionaire, said “it’s a tax on unrealized capital gains. Never been done before. Never been done before by any state. Never been done before by the federal government.”

The House bill was presented as an alternative to a Senate bill that passed in the spring, which would include a new $1.50 delivery fee and a real estate transfer tax to pay for the transit overhaul. But the House chose not to call the bill for a vote, instead opting for more negotiations before coming up with new ideas to raise revenue in the latest bill.

After being asked about the 7% amusement tax, the governor said, “Look, we can go through a whole bunch of things. As you know, the Senate passed a bunch of things last May. This one’s passing, I mean, this isn’t, as it is, it’s not going forward.”

But time is running short on the fall legislative session, which ends at the end of the day Thursday. And the House bill must clear its chamber and the Senate by then.

The CTA has said that without more money, service cuts will begin in August of next year. That’s even with a proposed fare increase of 25 cents per ride to take effect Feb. 1.

The Regional Transportation Authority, which oversees the CTA, Metra and Pace, has long warned that the looming structural fiscal deficit will devastate mass transit in the Chicago region if lawmakers in Springfield don’t raise more money.

For months, the RTA said the budget gap next year would total around $770 million. But less than two weeks before the start of the veto session, the agency sharply revised that projection downward, saying the deficit next year was only around $200 million, a difference it attributed mostly to an expansion of state sales tax.

Still, the RTA said, the gap would balloon back up to about $790 million in 2027 and beyond.

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