Billion dollar Illinois infrastructure shutdown will happen June 30 unless there is a last-minute reprieve

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Billions of dollars infrastructure projects are on hold pending resolution of the state budget impasse. (IEPA image)

Billions of dollars in Illinois infrastructure projects, especially highway and roadwork, will grind to a halt at fiscal year end June 30 unless the state’s General Assembly approves a budget or takes other measures by June 30.

Both the Illinois Department of Transportation (IDOT) and the Capital Development Board have announced plans to shut down all ongoing projects effective June 30, the Builders Association notes in a memo to members. “Since the General Assembly has not approved a Fiscal Year 2018 budget, the agencies will have no authority to expend funds after the current fiscal year ends on June 30.”

All vendors currently working on projects for those agencies should have received letters detailing the shutdown plans and schedule. It is critical that firms follow deadlines precisely in order to be paid for work completed prior to June 30. This was an issue during the last shutdown, when some firms missed deadlines to submit pay requests.

In June 2016, a threatened shutdown was staved off on the last day of the fiscal year by the approval by state lawmakers of a six-month stopgap budget. However, it isn’t clear yet if the legislature will take similar measures this year.

The Illinois Economic Policy Institute outlined the costs of the shutdown of $2.2 billion in planned infrastructure projects in a June 21 news release.

Click Here to Read the Report, “IDOT Shutdown: Understanding the Economic and Transportation Consequences.”

While the majority of the jobs affected by the suspension of $2.2 billion in planned infrastructure projects in FY 2018 are related to the construction industry and pay middle-class wages, the impact will be felt across all other economic sectors due to reductions in consumer spending. Moreover, by increasing reliance on unemployment insurance and reducing income tax collections from workers, the report notes that a shutdown would only deepen the state’s budget problems.

“In addition to the obvious inconvenience and safety risks that remaining work zones pose for travelers and commuters, a shutdown will depress economic activity and increase financial burdens to taxpayers across the state,” said study co-author Mary Craighead.

Last year, the state avoided an IDOT shutdown by enacting a full-year funding measure.

In light of the ongoing state budget stalemate, the report highlights the fact that suspending IDOT projects on June 30th will provide no immediate budget relief, since the projects are already funded by federal aid, state fuel taxes and user fees, and local sources. This funding is restricted to transportation and is protected by a Constitutional Amendment passed by 79 percent of Illinois voters in November of 2016.

“Illinois voters have spoken clearly about the importance of making improvements to our vital infrastructure above partisan politics,” Craighead added. “As they did last year, state leaders must act to prevent the most devastating effects of a shutdown by simply enacting an appropriations bill that releases funding that is already available.”

 

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