IDOT shutdown would eliminate 23k jobs, $1.7B in economic activity, study finds

Mary CraigheadIllinois Economic Policy Institute

Jun 20, 2017

The Illinois Economic Policy Institute sent the following news release on June 20, 2017: 

A new study by the Illinois Economic Policy Institute, which utilizes economic modeling software, comes just days after the Illinois Department of Transportation (IDOT) announced plans to suspend all construction projects on June 30th.

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% 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.”

Key findings from the study:

  • A Shrinking Economy: The loss of $2.2 billion in state infrastructure investment would reduce overall economic activity in the state by $1.77 billion in FY 2018.
  • Job Losses: A protracted IDOT shutdown will cause a loss of 23,000 jobs. While middle class construction employment will be most affected, the losses will extend beyond construction related industries and will touch all economic sectors.
  • Added Strain on Public Budgets: The loss of jobs and economic activity would reduce state and local tax revenues by $115 million, while increasing demand for taxpayer-funded unemployment insurance by as much as $155 million.
  • More Congestion and Transportation Safety Problems: With infrastructure projects designed to alleviate congestion, address safety issues, and complete important maintenance needs, the IDOT shutdown would likely lead to increased travel times and could subject the public to unsafe travel conditions.

You can find the full report here. 

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