Wirtz lawsuit over booze tax hike holds up CTA capital dollars

A lawsuit challenging the increased state tax on beer, wine and liquor is keeping the state from issuing bonds to fund almost $1 billion in CTA capital improvements

Earlier this year the legislature passed a $31 billion capital spending plan, with about $900 million earmarked for the CTA. But Rocky Wirtz owner of the Blackhawks and one of the country's largest beer and liquor distributors, promptly sued, saying the bill "rolls too many subjects into one bill and fails to adhere to a uniformity clause," according to a Crain's story.

At Monday's Red and Purple line vision session I asked State Sen. Heather Steans the status of the funds. She said the Wirtz lawsuit is keeping the stte from issuing bonds to fund the bill.

Also up in the air is the fate of the video gambling portion of the bill. Cities are voting to opt out of allowing video gambling, thus jeopardizing some of those funds. Other funding sources include increases in various driving fees, and more sales taxes on candy, beauty aids and beverages.

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  • How naive I was the think Rocky wasn't like the old man because he's allowing televised home games. This lawsuit is straight out of the old man's playbook. Let's make sure at the next Tattler TOD-fest that we only patronize establishments that are not supplied by the Wirtz liquor empire.

  • In reply to marthat3:

    Look: I can't stand the Wirtz Corp. either!
    Several years ago they bribed the legislators into passing a ridiculous law locking in distributors forever, which caused a price hike. A federal judge threw that one out immediately.
    But the state constitution is very clear on requiring single subject laws & if this isn't a single subject, then it needs to be thrown out & start over.
    There was a very good reason for writing that into the constitution. The General Assembly is a bunch of thieves!

  • In reply to ScooterLibbby:

    One should also note that Wirtz Corp. has standing, because the increased liquor tax, used to fund some of this, was imposed on distributors. Of course, the distributors eventually passed on the price hikes to the ultimate consumer.

    As I usually say, we'll have to wait for the Illinois Supreme Court to rule on the merit of the argument presented.

  • Ed: Sen. Steans told me that the tax was already upheld by one court, and it should be done with litigation in a few month, and upheld.

  • Finally an explanation. You know Quinn isn't going on the air with commercials saying "I signed a jobs bill [said] being held up by litigation over its constitutionality."

    The video gambling part has also been talked all over the place. Yesterday there was an article that said that only 10% of the population had opted out, and it took 20% to make a difference. However, since the City of Chicago has also reportedly opted out, or said it had preexisting ordinance banning it, either the person who made the assertion can't count, or the legislature was assuming that the machines would only be allowed in small villages.

    My experience as an editor of works discussing Illinois court decisions is that Stearns isn't in a position to predict anything.

    And if the bond money ever goes through, will CTA finally put through the order for New Flyer buses that it now says it doesn't need? Or will the Honorable Al Franken still have to cope with the unemployment crisis in Minnesota caused by the CTA?

    You have to love the [lack of] transparency of Illinois officials.

  • In reply to jack:

    And if the bond money ever goes through, will CTA finally put through the order for New Flyer buses that it now says it doesn't need? Or will the Honorable Al Franken still have to cope with the unemployment crisis in Minnesota caused by the CTA?
    I'm confused. Did the CTA place an order for buses and cancel it - causing New Flyer to lose possible business from other customers? I thought the board authorized purchase of up to 900 buses, but that they only actually placed an order for 150 buses. Then they got stimulus money and used that to buy about 50 more - quickly jumping into an assembly-line hole caused when some other agency cancelled their order. Did they really cancel on New Flyer, too?

  • In reply to AlexanderRusso:

    That has been totally confused.

    To eliminate one point of confusion--58 buses (#4150-4207) were funded by stimulus money and have been delivered. They generally are on routes 146 and 147.

    CTA had posted on its procurement site a request for proposals for up to 900 more (140 being the base amount of the contract). New Flyer had posted on its website that it had the order, but later posted on its site that it was cutting back its production schedule because state funding had not come through for an order from a major customer, but that the customer said that it still needed the buses for its bus replacement program. After that was reported, first on Chicagobus.org, and then here, and finally the Tribune picking it up from the CTA Tattler, the CTA spokeswoman confirmed the report. However, notwithstanding that confirmation, the contract has never appeared in the CTA Contract Awards database.

    If you want to follow this, follow the links in the Wikipedia Chicago Transit Authority article (at least the links are reliable, even if Wikipedia isn't).

    Since CTA is not being upfront about this, one blogger surmised that the CTA authorized management to sign the contract only after assuring funding, and hence that management never did. However, that then raises the question why New Flyer scheduled production if there was in fact no contract, or at least not a Notice to Proceed.

    Now, I am saying that the buses aren't needed, because if the 2010 service cuts are implemented, the 6000 series buses, which were to be replaced by at least the base order of 140, will be retired without replacement, according to the 2010 budget.

    There may be several rabbits to pull out of the hat, but it seems to be that the bus order goes through only if (1) there is state capital money to pay for it, and (2) money "magically appears" to avert the service cuts. Still, according to New Flyer, the delivery of the 140 was supposed to be complete by Spring 2010, and now obviously won't be.

  • In reply to jack:

    "Still, according to New Flyer, the delivery of the 140 was supposed to be complete by Spring 2010, and now obviously won't be."

    I thought we were very close (if not complete)to completing this order plus the extra 58. Is that not correct?

  • In reply to chris:

    No. You have confused the lease of 150 buses (4000-4149), pursuant to options assigned by King County Metro, and the 58 stimulus buses, purchased pursuant to options the CTA said were assigned to it by WMATA, with the additional up to 900 buses that CTA advertised for bids.

    The 208 buses (4000-4207) were all delivered by September 2009. New Flyer said that the 140 buses in the base order of the up to 900 contract were to be delivered in the first quarter of 2010, but their production "has been deferred."

    Again, trace the links indicated in Wikipedia.

  • In reply to jack:

    Got it. So the 150 we have now are leased, the new 140 (of a possibly 900) would be bought presumably... But that's on hold.

  • Part of this was also raising license plate fees by $20 a year, so motorists will be paying.

    Also there were all the advertisements from the "Safe Roads Alliance" asking us to call our legislators to have them fund the capital bill. However, since roads, schools, and transit were all in the same capital bills, it seems that this is the common problem, rather than the legislature failing to do something.

  • Sell advertising on bus roofs to target the upper story residents and workers.
    Speaking of Target,they could place their logo on bus wheels,since if done right,it would be visible even when the bus is moving.

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