While there are enormous needs for relief and support all across the economy, the president and many congressional leaders have indicated that they want infrastructure to be a major part of a future stimulus bill. If Congress does intend to use infrastructure spending to create jobs and support recovery, their own effort in 2009 has some clear lessons they should learn from.
Lessons and recommendations for future infrastructure stimulus Between 2009 and 2010, the American Reinvestment and Recovery Act (ARRA, commonly known as “the stimulus”) gave states $26 billion in flexible dollars to spend on virtually any surface transportation capital projects and $8.4 billion in funding for public transportation capital projects. With A COVID-19 recession all but … Continued
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. Here’s what reporters, bloggers and commentators are saying about the new findings:
Which States Squandered Their Stimulus Money? [The Daily Beast, 2/4/2011]
Sue Minter, Vermont’s deputy transportation secretary, says a longstanding “fix-it-first” policy for infrastructure and bipartisan collaboration shaped Vermont’s decisions about how to use the funds. The state spent all of its highway money on system maintenance, with a small amount going to mass transit. (Minter, a Democrat, was a member of the state legislature at the time.) “This shot of money into our economy was very, very significant. It’s part of the reason we have a relatively low unemployment rate,” she says. Only 5.8 percent of Vermont residents are out of work, one of the nation’s lowest rates. State research shows that ARRA funding employed 11,000 people—a small number overall, but a significant one in a small state. Minter says the maintenance was important for keeping economic growth, particularly in tourism, strong.
Conn. earns A+ for how it spent transportation stimulus money [New Haven Register, 2/4/2011]
Connecticut tied for No. 1 in the nation in how well it spent federal transportation stimulus money to create jobs, according to a report released today by Smart Growth America.
“Smart Growth America commends Connecticut for using its federal stimulus funding to maximize job creation,” said Geoff Anderson, president and CEO of Smart Growth America, in a press release. “Connecticut should continue on this same path of smart, fiscally responsible transportation policies when it considers its 2011 transportation budget.
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 create jobs in the short term and longer term economic prosperity too:
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.
As “Recent Lessons from the Stimulus” explains, not all transportation projects reap these benefits equally:
[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.
In his New York Times blog yesterday, Edward Glaeser asks for nuance and careful thinking on the question of whether countries should spend their way out of the recession: there’s no one answer, and we need to look carefully at the situations different countries are in. Similarly with different kinds of public spending. Some work, some don’t. It’s a good argument, but one he then fails to apply to infrastructure.
Through the end of 2009, investments by the American Recovery and Reinvestment Act (ARRA) in public transportation have created almost twice as many jobs per dollar as investments in highways – and the advantage is growing. The most recent data from states shows that every billion dollars spent on public transportation produced 19,299 job-months, compared to 10,493 job-months for every billion spent on highway infrastructure. Public transportation projects create more jobs than road projects because they spend less money on land and more on labor, and because projects are often more complex, whether laying track or manufacturing vehicles.
In today’s announcement of $1.5 billion in TIGER (Transportation Investment Generating Economic Recovery) awards, the US Department of Transportation (US DOT) showed the kinds of transportation projects that move people and freight in a way that makes places stronger, cleaner, and safer. DOT received 1,380 applications for the $1.5 billion pot, for a grand total of $56.5 billion in funds requested. The 51 projects announced under TIGER, part of the American Recovery and Reinvestment Act (ARRA), include…