If Illinois’ state budget crisis is not resolved by June 30, 2017, all existing Illinois Department of Transportation (IDOT) road, bridge, and transit projects will be stopped.
Yesterday, Frank Manzo IV, Illinois Economic Policy Institute (ILEPI) Policy Director, testified before the Illinois General Assembly. Please CLICK HERE to read the full testimony. The following is an edited version of the testimony.
Good afternoon, Mr. Chairman and Members of the Committee. The Illinois Economic Policy Institute (ILEPI) is nonprofit research organization that provides candid and dynamic analyses on major subjects affecting the Illinois economy, specializing in the construction industry.
The vast majority of economic research finds that infrastructure investment enhances economic growth. Research has found that, for every dollar increase in infrastructure spending, the U.S. economy improves by $1.57. Moreover, economists and policy experts strongly support infrastructure investment. Last year, ILEPI conducted anonymous surveys of 110 economics professors and public policy professors at accredited university programs in Illinois. 79 percent of them think Illinois should increase transportation infrastructure investment– not put it on hold— and 67 percent say that investment in highways and bridges improves the Illinois economy.
An important contributor to a state’s economic growth is the number of businesses opening up or locating in the state. The top factor in location decisions cited by corporate executives over the past five years has been highway accessibility, with about 90 percent saying that it is an important factor. An IDOT shutdown would have the opposite effect, making highways less accessible and hurting local businesses.
Last week, ILEPI released a study focused on the $2.2 billion in planned road and bridge improvements in fiscal year 2018. We find that an IDOT shutdown would cost the state 23,000 jobs, including jobs for more than 13,000 middle-class construction workers. These job losses would reduce tax revenues by over $100 million while increasing unemployment insurance costs by as much as $155 million. A protracted IDOT shutdown would shrink long-run economic activity and cause a $3.6 billion drop in total business sales in the state, hurting sectors ranging from engineering firms to restaurants and retail stores. Increased commute times and unsafe travel conditions would also occur, for example, while $12 million in resurfacing and bridge repairs are delayed right here in Springfield.
Holding IDOT projects hostage as part of the budget impasse is bad public policy. The impending shutdown is not due to lack of available funds or lack of public support. The majority of funding for these projects comes from federal aid. Additionally, the state and local portions are generated from motor fuel taxes and vehicle registration fees, which are restricted to transportation and protected by the Safe Roads Amendment to the Illinois Constitution that was passed by 79 percent of voters in November 2016. The funding is already available; it just needs to be appropriated.
Illinois voters have spoken loudly and clearly: infrastructure improvements are more important than the divisive partisan politics exercised in the state since January 2015. Thousands of workers, millions of travelers, and billions of dollars would be negatively affected if IDOT projects are held hostage.
The Illinois Economic Policy Institute urges elected officials in the state to prevent an IDOT shutdown. I thank you for allowing me the opportunity to submit my testimony.