In 1999, the Illinois General Assembly approved a 5-year statewide public works program, called "Illinois FIRST - "Fund for Infrastructure, Roads, Schools & Transit."  Governor George Ryan called it a $12 billion program to rebuild the State's crumbling infrastructure. But in reality the program only raises $6.3 billion in new state revenues from higher fees and taxes. The Governor's figure counts the dollars that could eventually be invested, if local agencies and the federal government fully match the new State funds.  For example, a local school board must raise $1.00 to match every $1.00 of State "Illinois FIRST" money that it requests.  Similarly local transit agencies, like the CTA, will use Illinois FIRST funding to leverage federal grants to build or repair transit infrastructure, buses, and rail cars.

Of the $6.3 billion generated by the fee and tax increases, $2 billion was dedicated to public transportation state-wide.  The northeastern Illinois region - Chicago and its five "collar counties" -- will benefit the most.  CTA is likely to get approximately $850 million.  Every year, our local transit agencies apply for Federal capital grants, and then use a portion of Illinois FIRST funds to pay the "local match" required by Congress.

Typically, CTA (or any other transit agency) must provide a local match of at least 20% of the cost of a project, and federal funds will pay the rest.  Historically, State government provides the local match for transit projects.  However, the local match can also come from municipal, county, or private sources. And in some places, the local transit agency tries to raise more than 20% from local sources.  Those agencies then gain a competitive edge on Capitol Hill, when lobbying Congress for federal transit dollars.

Illinois FIRST is NOT primarily a grant program, where the State gives out the revenue it takes in.  Instead, the State will use most of the new revenues to back the selling of bonds.  In other words, the State will borrow money to spend now (between 2000 and 2004); to be paid off gradually with the revenues it will collect from the dedicated taxes and fees every year for 20 years or more.

The Chicago Public Schools was guaranteed 20% of all Illinois FIRST dollars earmarked to help finance school construction or repair projects. Initially that amounted to $400 million (FACT CHECK) for CPS. As the program unfolded, however, school construction projects became one of the most popular aspects of Illinois FIRST, and state legislators agreed to accelerate the pay-out, then expanded the size of the school construction program. In all the Chicago Public Schools has garnered $200 million from Illinois FIRST.

Illinois FIRST has been controversial because the Illinois General Assembly linked members’ initial support for the program to annual appropriations for discretionary “member initiative” spending items, which often were not capital improvements. These expenditures soon earned the Illinois FIRST label, even though technically, they were not drawn down from the borrowed funds authorized by the public works program, but rather, came from the State’s general funds. Legislators clearly thought that having voted for Illinois FIRST, they deserved these annual discretionary appropriations. As the State’s budget deficit grew to crisis proportions by 2002, and human and social services got the ax, these discretionary spending appropriations somehow survived in spite of widespread public criticism. The net effect was to give public works spending a bad name, and Illinois FIRST has been viewed negatively by the media and many citizens because of this association.