Recovery Act Transportation Spending: ‘Summer of Recovery’ Becomes Fall of Discontent

The American Recovery and Reinvestment Act of 2009 provided $48 billion to states for transportation infrastructure projects. States achieved significant successes in 2010 in  meeting deadlines associated with the legislation, starting and completing projects on time and under budget, creating jobs and doing it all with little fraud or waste. Still, some questions have been raised about whether the stimulus could have had a greater impact, which types of projects were funded and which states received the most funding. Despite its political unpopularity in 2010, the Recovery Act proved its worth to state transportation officials around the country.

  Download this article in PDF

About the Author
Sean Slone is a transportation policy analyst at the Council of State Governments. He staffs CSG’s Transportation Policy Task Force and writes about transportation policy for CSG publications, such as Capitol Ideas magazine, the Capitol Comments blog and Capitol Research policy materials. He is the author of two CSG national reports: Transportation and Infrastructure Finance (2009) and Shovel-Ready or Not? State Stimulus Successes on the Road to Recovery (2010).


 

2010’s ‘Summer of Recovery’

The Obama administration dubbed the summer of 2010 the “Summer of Recovery” because it expected to see many of the infrastructure projects funded by 2009’s American Recovery and Reinvestment Act finally come to fruition. As the summer got under way, President Obama and U.S. Secretary of Transportation Ray LaHood traveled to Columbus, Ohio, to celebrate the groundbreaking of the 10,000th Recovery Act road project1 and work was completed on the nation’s first Recovery Act-funded project, a bridge near Tuscumbia, Mo.2

A Jacksonville, Fla., road project stalled for 30 years was among the projects finally able to move forward with Recovery Act funding as well.3

But despite all the orange barrels and Recovery Act project signs visible on the nation’s roads in 2010 and despite the many dministrative successes achieved by state government officials and others around the country in getting those projects up and running, the Recovery Act did not prove to be a politically popular program in midterm elections and in the post-election environment of Washington, D.C., and state capitals. That lack of popularity can be traced to the depth of the nation’s economic funk as well as to how the legislation was structured and the choices states made along the way.

The Successes of Recovery Act

Transportation Spending

By many measures and according to many different Recovery Act watchdogs, the implementation of transportation spending has been a success.

  • Deadlines Met—In March, Vice President Joe Biden and LaHood announced that every state and the District of Columbia had met the deadline to obligate 100 percent of their Recovery highway funds.4 The Federal Highway Administration met a Sept. 30 deadline for awarding $27.5 billion for highway and bridge projects and the Federal Transit Administration met the deadline for awarding $8.8 billion for transit projects.5 The U.S. House Transportation and Infrastructure Committee reported in December that 44 states had begun work on at least 90 percent of their Recovery Act highway projects. Of the $38 billion available for highway, transit and wastewater infrastructure formula program projects, $35.6 billion—or 94 percent—had been put out to bid on 20,132 projects as of the end of October. Within that total, 92 percent were under contract.6
  • Savings—The U.S. Department of Transportation was able to fund an additional 2,500 projects because contract bids on funded  projects came in $7.5 billion less than expected.7
  • Speed of Completion—In addition to coming in under budget, a slight majority of projects were completed earlier than estimated, producing additional savings. The investigative website ProPublica reported in November that of the 12,932 projects listed in a Federal Highway Administration database, 5,752—or 45 percent—were marked as completed. Of those, 51 percent were completed earlier than the estimated date.8
  • Management—Despite the speed with which the money has been allocated and spent, government watchdogs reported that stimulus contracts and grants have been relatively free of fraud and waste compared to many government programs.9
  • Job Creation—The President’s Council of Economic Advisers estimated that construction of transportation infrastructure helped save or create 321,900 jobs during the first three quarters of 2010.10

Obstacles to Success

But some believe there were a number of factors that may have limited the impact of Recovery Act transportation spending in 2010. Among them:

  • The Government Accountability Office reported in September that state departments of transportation were slower in obligating regular federal-aid highway funds during the last fiscal year because they’ve been so busy trying to spend Recovery Act dollars. That raises questions about whether the Recovery Act money is having the full economic stimulative effect intended because it was supposed to be in addition to and on top of the highway money states already had available to spend. GAO said staffing shortages in states dealing with budget challenges may have been partially to blame for some of the slowness in obligating regular funding. But uncertainty about future program funding levels and federal inaction on the next long-term authorization of federal programs clearly prompted many states to spend more cautiously as well. At the end of June, states had $19.7 billion in regular funds remaining to be obligated, 63 percent more funds than they did at the same time for the three previous years.11
  • An analysis of federal data by McClatchy Newspapers showed that a number of states suffering from some of the nation’s highest unemployment rates were among those slowest to spend stimulus money intended for highway projects. California, with the nation’s third worst unemployment rate, had yet to start on 41 percent of its highway projects in September. The state had spent just 26 percent of its highway money, one of the lowest rates of those states monitored by the GAO. The delay in spending there was blamed on the involvement of more levels of government in planning processes. Virginia had an even higher percentage of projects it hadn’t started—52 percent. Transportation officials in Virginia blamed an emphasis on more projects expected to have a long-term impact and the collaborative process of choosing projects for causing the delay.12
  • The Recovery Act’s focus on funding “shovelready projects” also came in for a fair amount of criticism. That focus meant many of the projects were short-term fixes, like repaving roads and painting bridges, rather than major transformative projects that might have produced a greater impact both economically and in terms of investing in a transportation system for the 21st century. Some shovel-ready projects took longer than anticipated to get going, providing more evidence to Recovery Act detractors.13 In October, as President Obama prepared for what turned out to be a bruising election for his party, even he sounded disappointed when he told The New York Times Magazine, despite significant evidence to the contrary, “there’s no such thing as shovel-ready projects.”14
  • But Recovery Act funding for more transformational transportation projects was heavily scrutinized as well. Fifty-one projects around the country were awarded Recovery Act funding as part of the TIGER (Transportation Investment Generating Economic Recovery) discretionary grants program. The program was intended to provide funding for innovative freight rail, highway, transit and port projects expected to produce significant economic and environmental benefits. Many of them were multimodal, regional projects that have proved difficult to fund and build under other programs.15 At a hearing in February marking the one year anniversary of the Recovery Act, U.S. Rep. John Mica, then the ranking member on the House Transportation and Infrastructure Committee, questioned why more of the TIGER funds did not go to states with higher unemployment. About 60 percent of the funding went to economically distressed areas.16 Mica also complained that his own state of Florida received no TIGER funds. He said the project selection process lacked transparency and the program represented, in effect, an executive earmarks program.17 By year’s end, Mica was the incoming chairman of the committee and the TIGER program, which was once seen as a potential model for future federal transportation funding, appeared likely to fall out of favor as earmarks of any kind were scorned by the new Republican Congress.
  • Year’s end also brought a power struggle over Recovery Act funds intended for the intercity passenger rail program. Ohio and Wisconsin, two states hit hard by the economic downturn, were among states that were awarded a portion of $8 billion in Recovery Act funding to build new high-speed rail lines. But both states elected new Republican governors who campaigned on pledges to kill rail projects, arguing they would become a financial burden their states could not afford.18 Both governors-elect sought to hold onto the money and divert it to road projects. But in December, LaHood announced that the $1.2 billion of rail funds originally designated for those states would be redirected to 13 other states for their high-speed rail projects.19

  Download Table A: "Recovery Act Funds for Highway Infrastructure Investment"

In the fall Congressional campaigns, many challengers were able to tar incumbents with having voted for “the failed stimulus” in campaign ads. After all, when President Obama signed the Recovery Act into law in February 2009, the unemployment rate was 8.1 percent and 12.5 million people were unemployed. In November 2010, the rate was 9.8 percent and more than 14 million were unemployed.20

But many state officials said the impact of the infrastructure projects funded with Recovery Act dollars shouldn’t be dismissed or taken lightly. Things could have been much worse without them. “I’ve heard naysayers talk about how the federal stimulus program didn’t do what it was supposed to do here and there,” said Kentucky Transportation Secretary Mike Hancock. “We would have had an incredibly weak year in terms of our ability to put projects on the street without that stimulus program. ... I feel very good about the projects that we were able to do. The only regret that I have is that we couldn’t do more.”

Notes

1 U.S. Department of Transportation. “President Obama breaks ground on 10,000th Recovery Act road project; let the Summer of Recovery begin!” Fast Lane: The Official Blog of the U.S. Secretary of Transportation. June 18, 2010. Accessed from: http://fastlane.dot.gov/2010/06/welcome-every one-to-the-summer-of-recovery-and-what-better-way-to-kickoff-a-season-of-renewed-american-infrastructure-and.html#more.

2 Kathie Sutin. “Nation’s First ARRA Funded Projects Nears Completion.” Construction Equipment Guide.com May 1, 2010. Accessed from: http://www.constructionequipmentguide.com/Nations-First-ARRA-Funded-Project-Nears-Completion/14343/.

3 American Association of State Highway and Transportation Officials (AASHTO). “Florida 9B Construction Underway in Jacksonville.” AASHTO Journal. July 9, 2010. Accessed from: http://www.aashtojournal.org/Pages/070910 florida.aspx.

4 AASHTO. “All States Meet Deadline for 100% Obligation of Recovery Funds.” AASHTO Journal. March 5, 2010. Accessed from: http://www.aashtojournal.org/Pages/030510deadline.aspx.

5 U.S. Department of Transportation. “DOT meets Recovery Act deadlines; more good jobs, more good projects.” Fast Lane: The Official Blog of the U.S. Secretary of Transportation. September 30, 2010. Accessed from: http://fastlane.dot.gov/2010/09/dot-meets-recovery-act-deadlines-more-goodjobs-more-good-projects-.html#more.

6 U.S. House Committee on Transportation and Infrastructure. “The American Recovery and Reinvestment Act of 2009 Transportation and Infrastructure Provisions Implementation Status as of November 12, 2010.” Accessed from: http://transportation.house.gov/Media/file/ARRA/2010 1202/Recovery%20Act%2012-2-10%20Report.pdf

7 Recovery.gov. “2010 Fiscal Year End Report to the President on Progress Implementing the American Recovery and Reinvestment Act of 2009.” September 2010. Accessed from: http://www.whitehouse.gov/sites/default/files/recovery_act_report_9-30-2010.PDF.

8 Rob Farley and Michael Grabell. “ProPublica and PolitiFact Test Obama Claims on Stimulus.” ProPublica/PolitiFact November 10, 2010. Accessed from: http://www propublica.org/article/propublica-and-politifact-test-obamaclaims-on-stimulus.

9 Recovery.gov.

10 Executive Office of the President. Council of Economic Advisers. “The Economic Impact of the American Recovery and Reinvestment Act of 2009: Fifth Quarterly Report.” November 18, 2010. Accessed from: http://www.whitehouse.gov/sites/default/files/cea_5th_arra_report.pdf.

11 Government Accountability Office. “Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States’ and Localities’ Uses of Funds.” September 2010. Accessed from: http://www.gao.gov/new.items/d10999.pdf.

12 Chris Adams. “Stimulus spending on highways isn’t delivering on job promises.” McClatchy. September 26, 2010. Accessed from: http://www.mcclatchydc.com/2010/09/26/101055/stimulus-spending-on-highways.html.

13 Blair Kamin. “Obama’s stimulus package, one year later: Too much quick fix; too little long-term infrastructure.” Chicago Tribune. February 18, 2010. Accessed from: http://featuresblogs.chicagotribune.com/theskyline/2010/02/heres-something-you-probably-havent-heard-lately-astimulus-story-where-democrats-and-republicans-arenthurling-ac.html.

14 Peter Baker. “Education of a President.” The New York Times Magazine. October 12, 2010. Accessed from: http://www.nytimes.com/2010/10/17/magazine/17obama-t.html?_r=4&ref=magazine&pagewanted=all%22.

15 Kent Hoover. “Washington Recovery Report: Stimulus to fund 23,500 projects this year.” Phoenix Business Journal. February 26, 2010. Accessed from: http://www.bizjournals.com/phoenix/stories/2010/02/22/daily45.html?t=printable.

16 AASHTO. “House T&I Committee Reviews One Year of Recovery Act Spending.” AASHTO Journal. February 26, 2010. Accessed from: http://www.aashtojournal.org/Page /022610oneyear.aspx.

17 Josh Voorhees. “TRANSPORTATION: Boxer wants TIGER to roar in next highway bill.” Environment & Energy Daily. March 25, 2010.

18 Michael Cooper. “More U.S. Rail Funds for 13 States as 2 Reject Aid.” The New York Times. December 9, 2010. Accessed from: http://www.nytimes.com/2010/12/10/us/10rail.html?_r=2.

19 AASHTO. “USDOT Redirects $1.2 Billion from Ohio and Wisconsin to 13 Other States.” December 10, 2010. Accessed from: http://www.aashtojournal.org/Pages/121010redirected.aspx.

20 Bureau of Labor Statistics. “Labor Force Statistics from the Current Population.” Accessed from: http://www.bls.gov/cps/.

AttachmentSize
Slone2011.pdf76.54 KB