Many states spent transportation funds poorly


Philip Langdon

New Urban Network

Smart Growth America says more jobs would have been created if governments had concentrated stimulus funds on repairs and existing transit.

As part of the American Recovery & Reinvestment Act (AARA), the federal government disbursed $26.6 billon in transportation money, hoping to create new jobs or save existing ones during the worst economic crisis of the past 70 years.

State spending of flexible ARRA transportation dollars. Source: Smart Growth America
State spending of flexible ARRA transportation dollars. Source: Smart Growth America

A new report from Smart Growth America declares the results deficient. “Too many states did not use ARRA transportation funds on projects that would have provided the greatest number of jobs — short- and long-term,” says the report,Recent Lessons from the Stimulus: Transportation Funding and Job Creation (attached below).

To get the biggest immediate boost in jobs, transportation funds should be spent on repairing and maintaining what already exists rather than planning new roads, bridges, and transit, the University of Utah’s Metropolitan Research Center found in 2009. Consistent with this, some states have applied a “fix-it-first” policy to transportation stimulus funds. The District of Columbia and seven states — Connecticut, Maine, New Jersey, North Dakota, Rhode Island, South Dakota, and Vermont — allocated 100 percent of their road spending to preserving the existing systems.

But others took almost the opposite approach. Five states spent between 63 percent and 81 percent of their road spending on creating new capacity. They were: Arkansas and Kansas, which both allocated 81 percent of their road money to new capacity; Florida, 77 percent new capacity; Kentucky, 74 percent; and Texas, 63 percent, according to Smart Growth America.

David A. Graham of Newsweek, in a report distributed on The Daily Beast and available here, found that spending on existing systems seems to have paid off in in states that tried that approach, such as Vermont.

“This shot of money into our economy was very, very significant,” Graham was told by Sue Minter, Vermont’s deputy transportation secretary. “It’s part of the reason we have a relatively low unemployment rate,” she said.

The Daily Beast said:

Top 5 states by repair
Top 5 states by repair

“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.”

“Other states, however, took a different tack. Arkansas used 81 percent of its money for new projects and none on transit; it also has a higher unemployment rate than Vermont. And unlike other states near the bottom of the list, just 38 percent of its roads are in good condition, according to a report by the American Association of State Highway and Transportation Officials, a trade organization.”

The Daily Beast emphasized this aspect of Smart Growth America’s report:

Top 5 states by choice
Top 5 states by choice

“… states 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.”