Illinois Off to Late Start Paying Road Construction Bills

Highway contractors have been dismayed by a new business style from Springfield this summer: Pay to pave.

While Gov. Pat Quinn has touted a mini-capital plan called Jump Start for investing in the economy through fast-moving road and bridge projects, the state has not been paying its bills. Bonds to fund the projects weren't sold until this week, which means the Illinois Department of Transportation won't be making most of the payments until late this month, at best.

"We have found the Department of Transportation to be very concerned about the fact the governor's jobs program has been financed by the construction industry," said Eric Fields, executive director of the Associated General Contractors of Illinois.

The Jump Start capital program includes more than 240 road and bridge projects -- that's 858 miles of roadways alone -- and is under construction now. Much of it is done.

"For the 2009 construction season to date, we have completed approximately $1 billion worth of work," IDOT communication manager Paris Ervin said via e-mail.

Jump Start is only one portion of the massive amount of roadwork under way this year. Federal stimulus money has paid for some of it; the regular highway construction program has paid for other parts. But Illinois legislators wanted to help the economy with their own stimulus, which began with Jump Start and later morphed into the $31 billion Illinois Jobs Now!

To get the money out quickly, bids had been let for Jump Start work in May. Normally, the state pays the contractors every other week, generating pay estimates and depositing the funds electronically. That didn't happen this summer, which means contractors have been sitting on millions of dollars of bills. In the Peoria area, for example, much of the resurfacing along U.S. Route 150/War Memorial Drive was done with Jump Start funds. Just three sections of that work account for more than $10 million.

"It has been an issue in trying to make ends meet. Luckily, not all of the projects have been mini-capital," said Mike Cullinan, president of R.A. Cullinan & Sons, which has handled most projects here. "We have gotten funds here just recently. . . . I think they got everything on the right track."

Earlier this month, Quinn ordered the transfer of $20 million to start paying the backlog until $400 million in bonds were sold Wednesday. The state expects to receive the proceeds Sept. 23 and will start generating the pay estimates.

"We estimate that first checks will be in hand five business days after the money is in the fund," Ervin said.

To put this in perspective, in late August the state sold $1.25 billion in bonds for its backlog of bills. Hospitals, pharmacies and not-for-profit organizations have gone unpaid for months. Fields explained that contractors have a different financial understanding.

"Many vendors collect interest on late payments," he said. "State contractors, highway contractors, do not."

He's not sure the most recent bonds will be enough to pay all the construction bills, but it's a start.

"On thing is for sure: If the bond revenue is there, it's better than it was before," he said.

To see more of the Journal Star, or to subscribe to the newspaper, go to http://www.PJStar.com. Copyright (c) 2009, Journal Star, Peoria, Ill. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.


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