CHICAGO, March 3 (Reuters Legal) - The Illinois Supreme Court on Thursday agreed to take up on an accelerated basis the state's appeal of a lower court ruling that voided taxes and other revenue earmarked to pay off bonds for a massive capital improvement program.
The high court also extended its action last month to stay the state appellate court ruling until there is a final decision in the case. It also set deadlines in April and May for the two sides to file briefs.
Illinois had argued the Jan. 26 appeals court ruling would cost it millions of dollars in revenue and would force the state to find alternative sources for paying off bonds already sold for the $31 billion capital improvement program.
Illinois has issued $2.23 billion of bonds since 2009 for the program to improve roads, bridges, schools and other infrastructure, according to a spokeswoman for the state's budget office.
Most of those bonds carry the state's general obligation pledge, while $375 million of Build Illinois Bonds sold in December 2009 carry a pledge of state sales tax revenue.
The appeals court ruled 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.
The ruling did not prompt any actions by rating agencies.
Liquor distributor W. Rockwell Wirtz filed the lawsuit in August 2009, claiming various violations of the state constitution, including the single-subject requirement.
Revenue measures approved for the program included higher motor vehicle title fees, a liquor tax increase and new sales taxes on candy and other products. The lawsuit was heard by the appeals court after a Cook County Circuit Court rejected the complaint.
The case is W. Rockwell Wirtz et al v. Patrick Quinn et al, Illinois Appellate Court, Third Division, Nos. 1-09-3163 and 1-10-0344.
For Wirtz: Seth Horvath, Claudette Miller, Floyd Perkins and Sam Vinson of Ungaretti & Harris.
For Chicago: Assistant Attorney General Richard Huszagh
(Reporting by Karen Pierog of Reuters; Additional reporting by Jeff Roberts of Reuters Legal)