July 11, 2011 / 2:25 PM / 8 years ago

Illinois Supreme Court OKs revenue-backed bonds

NEW YORK/CHICAGO (Reuters) - The Illinois Supreme Court on Monday approved the state’s appeal of a lower court ruling that had voided taxes and other revenue earmarked to pay off bonds for a massive capital improvement program.

The state high court reversed a lower appeals court ruling decided in January. Illinois had argued the ruling would cost the state millions of dollars in revenue and would force it to find alternative sources for paying off bonds already sold for its $31 billion capital improvement program.

The January appeals court ruling said that a 2009 law, which included a wide array of revenue measures to help fund the partly bond-financed program, violated a state constitutional requirement that bills contain only related subject matter.

Liquor distributor W. Rockwell Wirtz had filed the lawsuit in August 2009, claiming various violations of the state constitution, including the single-subject requirement.

“The public acts in the instant case clearly are reasonably related to one another in that they are associated with raising funds for capital projects, establishing capital projects, and appropriating funds to those projects.” the Supreme Court wrote in its decision on Monday. “In light of that relationship, we hold that the contingency provisions in the acts do not violate the single subject rule.”

The court added that “the practicalities of implementing a large and complex capital projects program, while complying with constitutional guidelines, necessitated that the legislature separate the various parts of the program into separate bills. At the same time, it makes little sense to raise taxes to fund capital programs without appropriating the money toward those programs, and vice versa.”

The case is: Wirtz v. Quinn, Supreme Court of the State of Illinois, No. 2011 IL 111903.

Reporting by Chip Barnett and Karen Pierog

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