Tax breaks sought for Illiana Expressway project

SPRINGFIELD — Adding to the confusion that is the Illiana Expressway saga, Gov. Bruce Rauner's administration is now seeking approval for tax breaks for building materials that would be used to construction the 47-mile tollway connecting Interstate 55 in Wilmington to Interstate 65 in Indiana.

The move contradicts the Rauner administration's decision last month to nix the controversial Illiana Expressway project by removing it from the Illinois Department of Transportation's current multi-year plan.

But Rauner Spokeswoman Catherine Kelly said Tuesday the Illiana is still on ice. She said the filing is part of the rulemaking process as required by 2010 legislation passed by lawmakers allowing for tax exemptions for building materials used in the Illiana project.

"It is in no way an effort to revive a project that IDOT has pulled from its multi-year plan," Kelly said in an email.

"For the purpose of financing the Illiana Expressway project, the [Illinois Department of Revenue] is authorized to apply for, execute, or endorse applications for an allocation of tax-exempt bond financing authorization ..." the 2010 law states.

IDR spokesman Terry Horstman said the filing is routine, noting how the recent proposal was introduced to "catch up on all sales building materials exemptions" required by the legislation.

The proposal for the tax breaks is before the Joint Committee on Administrative Rules. The public comment period runs through Aug. 24.

A leading Will County advocate of the $1.5 billion project was surprised Tuesday to learn the news.

“Oh my God. That's huge,” said John Greuling, president and CEO with the Will County Center for Economic Development.

If the tax breaks were ever approved, Greuling said it's a “very significant” incentive for private investors with the intent of trying to shave down project costs.

Supporters have said the proposed tollway would relieve traffic congestion on Interstate 80 south of Chicago and create much-needed jobs. Critics say it’s financially risky.

Greuling said the big issue that remains is a federal court's June 16 decision deeming the federal government's approval of the Illiana Expressway project invalid.

“That really threw a monkey wrench in the process,” he said.

The Environmental Law and Policy Center based in Chicago first brought the suit to U.S. District Court on behalf of several regional environmental protection groups.

Howard Learner, executive director with the policy center, questioned Tuesday why a sales tax exemption is being proposed with the fiscal mess Illinois is in.

“Given the State of Illinois’ fiscal crisis, why in the world is the [Illinois Department of Revenue] proposing to grant a sales tax exemption for the boondoggle Illiana Expressway," Learner said in a statement. "It’s time for [Rauner] to finally terminate the wasteful Illiana Tollway and not create another new costly subsidy that Illinois taxpayers can’t afford."

IDOT has the option to appeal the federal court decision and modify the invalid environmental impact study. It's unclear what IDOT officials will do as they weigh options.