June 29, 2017
On June 21, 2017, the Governor called the General Assembly for a special session to address the State of Illinois' budget impasse, but lawmakers have not yet reached a budget deal for the new fiscal year (FY) 2018 that begins on July 1, 2017. The Illinois Department of Transportation (IDOT) announced that without a budget, it will suspend all state-funded transportation-related construction after June 30, which jeopardizes more than 700 projects across the state totaling $2.3 billion and affecting a projected 25,000 construction jobs.
The recent transportation "lockbox" amendment to the Illinois Constitution that voters passed last November will not prevent IDOT from shutting down. Without the appropriations provided by a budget, state agencies will lack the legal authority to spend funds, regardless of whether revenues are available. While the amendment requires revenues raised from transportation-related fees and taxes to be spent only on transportation projects, it does not provide for continuous appropriations each fiscal year, nor does it provide the automatic pass through of the federal funding that represents about 75 percent of the resources for IDOT's annual highway construction program.
This Policy Update analyzes the potential effects of this shutdown on the region's transportation system and highlights some of the largest projects that would be suspended.
Projects potentially affected
In the CMAP region, more than $320 million of active FY17 IDOT projects could shut down, including the expansion of 159th Street from I-355 to US 45, Jane Byrne (Circle) Interchange, and Kennedy Expressway auxiliary lanes. The reconstruction of the Circle Interchange is a major capital project prioritized in GO TO 2040, while the auxiliary lanes on the Kennedy Expressway received funding through the competitive Congestion Mitigation and Air Quality Improvement (CMAQ) program that CMAP manages.
Projects slated for FY18 and beyond could be affected as well. IDOT's entire construction program is documented in the Department's Multi-Year Improvement Program; the materials for IDOT District 1 and IDOT District 3 include detailed lists of projects in northeastern Illinois. Approximately $2 billion per year is programmed for state and local highway improvements in the CMAP region over the next five years.
The following map shows examples of major projects throughout the CMAP region that would halt progress if the budget impasse continues.
The budget impasse will likely have a limited initial impact on transit in the region. Most of the transit agencies' capital funding comes directly from federal sources and should not be disrupted by the lack of a state budget. However, some $500 million in capital funding across the Regional Transportation Authority's three Service Boards (Chicago Transit Authority, Metra and Pace) comes from recent state capital programs -- Illinois Jobs Now! and Jump Start -- and projects reliant on that funding could be held up. At their discretion, the Service Boards might be able to use other revenue sources to continue construction of those projects in the short term. Although the transit agencies have access to most of their operating assistance because of a continuing appropriation of the region's dedicated transit sales tax revenues, those payments have been substantially delayed and could potentially affect our transit system. Facing a similar situation as the Service Boards, Amtrak is expected to continue normal operations for the time being.
Costs of a shutdown
IDOT has reported that the process to suspend construction will have an initial cost of about $19 million statewide. Before work on a project can be suspended, IDOT's contractors must go through an extensive process of demobilization, whereby workers prepare to leave construction sites in a condition of safe travel. Because of the time it would take for larger construction sites to shut down, many contractors have already taken some of the steps required to do so. According to IDOT, it will cost the Department an estimated $2 million per day for work zones statewide to secure and maintain traffic controls and environmental standards, the latter of which are necessary to comply with environmental protection measures required for construction. In the case of an extended shutdown, contractors would have to remove equipment, such as cranes, from construction sites, entailing additional unexpected costs. Once construction resumes, IDOT estimates an additional $1.8 million would be required to restart projects across the state.
In addition to the expenses incurred by IDOT, suspending the state's construction program could raise other concerns—for example, compounding metropolitan Chicago's well-documented congestion challenges. The presence of numerous inactive construction sites across the state's road network would have consequences on safety and congestion. As noted in CMAP's Highway Operations strategy paper, the Federal Highway Administration estimates that work zones cause 10 percent of highway congestion. More than 4,200 work zone crashes occurred in Illinois in 2014, causing 30 fatalities.
While IDOT's lack of both a capital and operating budget for FY18 is clearly a very pressing issue, the ongoing state budget impasse has also reinforced the urgency of developing an adequate, long-term source of funding for transportation in Illinois. The GO TO 2040 comprehensive plan prominently calls for additional federal and state transportation revenues to compensate for the declining revenues caused by changed driving patterns and improved vehicle fuel economy. The plan also calls for revenues that could keep pace with growing construction costs, and better account for the needs of the region's multimodal system. The plan supports a performance-based approach to programming decisions and congestion pricing of the highway system to best manage demand for limited assets and resources. These concepts are emphasized each year in CMAP's federal agenda, state agenda, and state legislative principles, along with CMAP's principles for a new state capital program.
ON TO 2050 will continue to underscore the need to make prioritized investments and provide adequate funding for the region's transportation network. Initial CMAP analysis for the Financial Plan for Transportation indicates that the region could face a $45 billion shortfall in revenues needed to operate and maintain the transportation system's current state of repair, let alone to modernize, achieve a state of good repair, or expand the system. To improve our transportation system and promote broader economic success, the region will need to implement new policies to generate reasonably expected revenues.