End of Illinois Budget Impasse Restarts Road and Bridge Projects
The Illinois House overrode Governor Bruce Rauner's veto, allowing DOT projects to resume
The Illinois House voted to override Republican Governor Bruce Rauner’s vetoes of a 32% income tax increase and a $36 billion state budget today, ending a historic impasse that lasted nearly three years.
The shutdown had stopped work on 900 highway and bridge projects valued at $2.2 billion since June 30.
The Illinois Department of Transportation says up to 20,000 jobs were affected. The Illinois Road & Transportation Builders Association (IRTBA) says that roughly 30,000 people were put out of work as a result, and the American Road & Transportation Builders Association (ARTBA) estimates the figure could be 43,000 including related jobs.
IDOT sent out a message this afternoon telling construction companies to inform their members to resume work on contracts with the department.
The shutdown also stopped some work at universities, museums, parks and other state facilities, some civil services and the entire state was removed from participating in the Powerball lottery.
Rauner and State House Speaker Michael Madigan (D-Chicago) waged a budget public relations battle for more than two years. Rauner wanted "structural" reforms to deal with the state's debt such as workers' compensation and pension reform and Madigan wanted the tax increase that passed today to fill the budget hole. The tax hike bill passed with the bare minimum, 71 votes, required to overturn Rauner's veto. The budget bill passed with 72 votes.
The Moody’s ratings agency said that it will place Illinois on review for a downgrade, saying the budget plan that passed may not raise the money necessary to avoid further debts and could actually add to the state’s debt by borrowing to chip away at the its backlog of unpaid bills. According to Bloomberg, taxable Illinois bonds due in 2033, one of the state’s most actively exchanged securities, traded for an average of 95.2 cents on the dollar Thursday, up from 91.5 cents on June 30.