IL road construction shutdown leads to layoffs amid state budget impasse

Dive Brief:

Transportation construction worker layoffs began in Illinois on Monday as a state budget impasse necessitated the shutdown of approximately $3.3. billion of projects, according to The State Journal-Register.
In the days leading up to the shutdown, the Illinois Department of Transportation told contractors it could no longer pay them and directed them to secure their projects as they halted work. The agency estimated that approximately 20,000 workers statewide would be affected by the shutdown.
July 1 marked Illinois' third year without a full-year budget, and, according to the American Road and Transportation Builders Association (ARTBA), there would be a loss of $35 million in wages and other economic activity in the shutdown's first week.

Dive Insight:

Illinois Road and Builders Association (IRBA) officials said there were a few jobs funded with federal and local money that were continuing on with work despite the shutdown. The association said it would take time to restart projects once the state comes to a budget agreement, and ARTBA said the process of resuming work would put projects behind schedule and add costs to the work in progress.

IRBA's estimate of $3.3 billion of affected projects is higher than the $2.3 billion the IDOT projected before the shutdown. As early as the middle of June, the state began to warn contractors of the impending shutdown, which could cost Illinois $19 million. Securing construction sites could cost $2 million, and a return to work could add another $2 million to the bill.

Back in June, however, the impending shutdown did not stop the Illinois Tollway Board from giving the green light to a $4 billion plan to widen a 22-mile stretch of toll road near O'Hare International Airport in Chicago. Construction should begin in 2020.

New Jersey also shut down its highway construction projects last year after Republicans and Democrats could not come to an agreement on how to balance out a gas-tax increase in the budget and provide some taxpayer relief. Because the state's Transportation Trust Fund remained essentially empty without a decision, New Jersey Gov. Chris Christie declared that there were no funds to pay for construction projects and stopped all roadwork — similar to the Illinois situation — during the busy summer season. Work was halted from July 1 until early October, when lawmakers finally agreed on a budget solution.