Budget Crisis Temporarily Suspended Illinois Road Construction Projects
Hundreds of road construction workers in Illinois recently lost work as numerous government construction projects within the state were halted. Roughly 900 transportation projects, worth $3.3 billion, were shut down after the state cut off their funding.
When the budget was in limbo, about 20,000 workers were estimated to be hurt by the budget cuts, according to the Illinois Department of Transportation. However, with a new budget passed, state construction projects are being restarted, so the affects on workers now won’t be as severe.
Within the capital city of Illinois, Springfield, over a dozen major transportation projects were temporarily stopped due to the budget crisis. Among the affected projects, which were in total budgeted at $284.0 million, was the construction of a high-speed rail line in Springfield, which was already in its final phase of completion.
An economist with the American Road and Transportation Builders estimated that huge economic losses may have resulted from the temporary construction shutdown. According to the economist, the one-week shutdown may have caused $35.0 million in losses, including wages, sales and related economic activity.
The Illinois Department of Transportation (IDOT) warned construction contractors earlier last month that the department would no longer be in a position to pay its bills after June 30, if the budget was not approved by that deadline.
The State of Illinois had been facing a serious financial crisis; it went without a budget for two straight years. Political deadlock between the Republican Governor and the Democratic Legislature resulted in a severe cash crunch.
Illinois Governor Bruce Rauner has been proposing to cut state spending and increase taxes in order to balance the state’s budget deficit. The Democratic Legislature, however, has been calling for an increase in government spending. As a consequence, the state was brought to the brink of bankruptcy, whereby unpaid bills piled up while the state did not have the funds to pay them off.
The two sides have finally managed to reach a compromise, and have passed a budget for fiscal-year 2018. The construction projects that were halted will now be resumed. Workers will begin to go back to work as state funds reach the contractors.
However, the announcement came after the deadline for the budget had already passed, so damage was already done. The shutdown caused numerous projects to be pushed behind schedule. As a result, the state may have to incur additional costs once the projects are resumed.
“Layoffs begin as state road construction shuts down,” The State Journal-Register, July 3, 2017.
“IDOT says state road projects can resume with new budget,” The State-Journal Register, July 7, 2017.