New report reveals smart transportation spending creates jobs, grows the economy

In his State of the Union address, President Obama called on Americans to “out-innovate, out-educate, and out-build the rest of the world” to win the future. To rebuild America, he said, we will aim to put “more Americans to work repairing crumbling roads and bridges.”

A new report from Smart Growth America analyzes states’ investments in infrastructure to determine whether they made the best use of their spending based on job creation numbers. Recent Lessons from the Stimulus: Transportation Funding and Job Creation evaluates how successful states have been in creating jobs with their flexible $26.6 billion of transportation funds from the American Reinvestment and Recovery Act (ARRA). Those results should guide governors and other leaders in revitalizing America’s transportation system, maximizing job creation from transportation dollars and rebuilding the economy.

According to data sent by the states to Congress, the states that created the most jobs were the ones that invested in public transportation projects and projects that maintained and repaired existing roads and bridges. The states that spent their funds predominantly building new roads and bridges created fewer jobs.

As Newsweek’s David A. Graham explains, investments in transportation have dual economic benefits:

Injecting money into transportation projects, the thinking goes, is an especially potent jobs-creation tool because it not only puts construction workers and contractors to work quickly, it also lays the groundwork for future economic growth and development. Obama predicted the transportation money alone would put hundreds of thousands of workers on the job.

But as “Recent Lessons from the Stimulus” explains, not all transportation projects reap these benefits equally, and some states created more jobs out of their stimulus funds than others:

[S]tates spent more than a third of the money on building new roads—rather than working on public transportation and fixing up existing roads and bridges. The result of the indiscriminate spending? States missed out on potentially thousands of new jobs—and bridges, roads, and overpasses around the country are still crumbling. Meanwhile, the states that did put dollars toward public transportation were richly rewarded: Each dollar used on transit was 75 percent more effective at putting people to work than a dollar used for highway work.

Historically, investments in public transportation generate 31% more jobs per dollar than new construction of roads and bridges. Smart Growth America’s findings show that the payoff was even larger in ARRA spending, with public transportation projects producing 70% more jobs per dollar than road projects. The same historical statistics show that repair work on roads and bridges generates 16% more jobs per dollar than new bridge and road construction. Repair and maintenance projects spend money faster and create jobs more quickly than building new roads because they employ more kinds of workers, spend less money on land and more on wages, and spend less time on plans and permits.

Together, the states spent $15.7 billion (58.9%) of flexible ARRA transportation funds on repairing and maintaining roads and bridges; $8.9 billion (33.5%) on building new ones; $1,042.5 million (4%) on non-motorized projects such as bicycle projects, pedestrian projects and trail projects, and $462.8 million (1.7%) on public transportation projects.

Voters already believe that repair and maintenance and public transportation are where we should focus our transportation dollars, and are a good value for the dollar. A national poll conducted by Smart Growth America and Hart Research in November 2010 found that nearly 91% of voters believe maintaining and repairing our roads and bridges should be the top or a high priority for state spending on transportation programs, and 68% of voters believe that improving and expanding public transportation options should be the top or a high priority.

Recent Lessons from the Stimulus ranks all 50 states by how each state invested its ARRA flexible transportation dollars, as reported by the states to Congress. Eight states spent 100% of their ARRA flexible transportation funds to preserve existing roads and bridges and ranked among the top states. Texas, Kentucky, Florida, Kansas, and Arkansas spent the majority of funds building new roads and bridges and comprised the bottom five in terms of average jobs created per dollar spent. Florida and Kansas can point to roads that are in good shape relative to other states and thus less need for repair and maintenance. However, the vast majority of states find themselves in a very different situation, with large unmet maintenance and repair needs that, if allowed to continue, will cost even more to fix later.

Read the full report: Recent Lessons from the Stimulus: Transportation Funding and Job Creation

Which States Squandered Their Stimulus Money? [The Daily Beast, 2/3/2011]