It’s no secret that Illinois government is a bit unstable these days. Not only is the General Assembly holding impeachment hearings of Gov. Rod Blagojevich but the state has run up a huge budget deficit and both parties elected new Senate leaders last month. By January 21 of next year, things might be a bit more settled. If not, how the state spends crucial federal assistance could become a big issue.

President-elect Barack Obama has made it clear that he wants to sign a $800 billion, two-year stimulus package within days of taking office, a third of which would fund “shovel-ready” infrastructure projects at the state and local level.

According to Marisa Kollias, a spokeswoman for the Illinois Department of Transportation, the state is busy readying its list of potential projects. “There are three key factors IDOT uses to prioritize projects no matter what,” she tells us. “Safety, needs, and wants. That’s no different now.” Localities across the state—from Champaign to Chicago—are making their needs public as well. And Blagojevich sent a letter to congressional leaders in November requesting more than $1 billion annually over the next three years, a portion of which would be devoted to infrastructure investment.

But how will contracts be awarded if Congress allocates the money? Will the governor’s office have administrative command over the process? “Since the legislation hasn’t been drafted,” Kollias said in a subsequent email, “we cannot confirm what procedure we would be required to follow.”

To make sure the stimulus is felt immediately, Obama advisers have already suggested the federal government will utilize “existing mechanisms” to distribute the funds. If so, it’s conceivable that Illinois companies which previously received state contracts in exchange for campaign contributions could again enter the bidding sweepstakes.

To make matters worse, Obama has already signaled that he will impose a 180-day limit for using the new money. That means the government would be forced to move quickly or forfeit the federal assistance at a time when the state desperately needs it, which could benefit companies already familiar with the process.

We’ve advocated for federal assistance to states in the past and the policy is still important. But Blagojevich’s arrest has reinforced the need for heavy oversight. We need to make sure low-priority (but politically beneficial) pork projects aren’t given precedence. Also, it’s important that policymakers at all levels of government are pulling in the same direction. Trust has been a major barrier in negotiations over the capital construction bill. Let’s hope the state doesn’t squander a federal jolt for the same reasons.

Image used under a Creative Commons license by Flickr user Altogether-Aido.