Pritzker strikes P3 authority for local Illinois governments

Non-home rule local governments in Illinois will not be able to pursue public-private partnerships after Gov. JB Pritzker struck the provision from a larger P3 bill that lawmakers passed in the spring.

House Bill 2827 is an omnibus procurement bill that made various changes to the state’s existing Transportation Public-Private Partnerships Act, including allowing tolls on highway P3s, a move that paves the way for a high-profile Interstate 55 managed lanes proposal.

The new bill expands authority to use a P3 for a transportation project from transportation agencies to a “responsible public entity,” which covers the Illinois Department of Transportation, the Illinois State Toll Highway Authority, and any county, municipality, or other unit of local government.

Pritzker struck the language that added counties, municipalities, and other units of local government.

Home-rule local governments in Illinois are already allowed to enter into P3s.

The bill “contains positive developments to address procurement issues, and includes many items important to stakeholders,” Pritzker said in a statement. But it lacks “proper oversight” for local P3s, he said.

“As written, the bill creates a pathway for private industry to enter P3 agreements locally that skirts transparency and anti-corruption requirements established in state statute,” Pritzker said. “The potential in this bill for opacity and corruption is too great. In addition, the bill as written puts the state at greater risk of project failure because it decreases competition and reduces the opportunity for public input into project planning and implementation currently required for other P3 developments under state law.”

If lawmakers accept the amendatory veto, the rest of the bill will become law. The General Assembly could also vote to override the governor’s veto with a three-fifths vote in both chambers.

House assistant majority leader Rep. Jay Hoffman, the bill’s sponsor, told the Bond Buyer that he “does not have considerable opposition to the amendatory veto,” and that he will decide in the next few weeks whether to file a motion to accept the provision or file another bill. Hoffman said he plans to work with the governor’s office to resolve the issues in the 2024 spring session.

The bill also allows for unsolicited proposals and added “design” and “construction” to prior language allowing for the development, financing, or operation of a transportation P3.

The General Assembly in the spring session also signed off on House Joint Resolution 23, which gives IDOT the authority to issue a request for ideas, information, or proposals to gauge interest in a P3 to build managed lanes with tolling on Interstate 55. HJ 23 only allows IDOT to further explore the P3 and mandates further legislative review for all future steps.

The project in 2018 was projected to cost $800 million. It is now estimated potentially to cost $2 billion to $2.5 billion.