The American Road & Transportation Builders Association (ARTBA) Chief Economist Dr. Allison Premo Black says a “prolonged” shutdown of transportation projects in Illinois, which could be initiated by June 30 if the Illinois legislature does not approve a state budget, could potentially cost $345 million per week and put 43,000 related jobs at risk.
Two weeks ago the Illinois Department of Transportation said it would shut down project work by June 30 if the state legislature does not pass a budget by the end of the month.
Illinois Road & Transportation Builders Association (IRTBA) President & CEO Mike Sturino said then a shutdown could cost more than $3 million per day in direct costs alone, with an estimated 30,000 people being out of work across the state as a result. Sturino testified before the Illinois House of Representatives regarding the impacts of the shutdown on June 27.
Last year, New Jersey Gov. Chris Christie ordered a shutdown of state Transportation Trust Fund projects in reaction to a stalemate over legislation to raise the state’s gas tax. This covered more than 900 projects with an estimated value of $650 million.
ARTBA’s Black then forecast that shutdown could cost up to $1.3 million per day and affect 1,500 non-construction jobs and 1,700 construction jobs.
The Illinois shutdown would stop work on 900 highway and bridge projects valued at $2.2 billion. Black forecasts in the first week the shutdown would cost a minimum of $34 million and set as many as 11,000 highway, street and bridge contractor employees idle.
Other details from Black’s analysis of the shutdown include:
- An estimated $127 million in construction work would have been completed on the identified projects the week of July 1—outside of the direct costs that contractors will incur to maintain their jobsites. This construction work supports $331 million in purchases through other sectors of the economy, adding $171 million to the state’s Gross Domestic Product (GDP). Although some of that spending will still occur next week, a prolonged shut down will weaken that economic impact, as contractors cut back on orders for materials, equipment, and supplies.
- Each year, that $2.2 billion in annual highway and bridge construction spending adds up to over $5.7 billion in total economic output for Illinois businesses, and adds nearly $3 billion to the state’s GDP.
- Highway project delays result in direct and indirect costs to the public, including wasted time and fuel for travelers in the corridor, the effect on businesses and their consumers from the increased roadway congestion, construction cost increases, and the economic impact of project delays. One month of delay can raise project costs by 1 to 1.5 percent, which is a large sum when considering the costs of transportation projects are in the hundreds of thousands to millions of dollars.
The full report of the long-term impact of the potential Illinois transportation project shutdown is available at the “Economics” section of www.artba.org in the “Research” area.