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Transportation leads a summer of recovery

This summer, the orange cones have been out on highways and bridges across the country, a visible symbol of the American Recovery and Reinvestment Act at work. Although accounting for only six percent of the total funding included in the stimulus, the $48 billion targeted at the nation’s highways, transit systems, intercity passenger rail, and aviation networks have borne rich fruit, both in creating good jobs for tens of thousands of Americans and in updating an aging transportation system.

Transportation’s “Summer of Recovery” is making a difference in America. Virtually every city, county and state across the United States has been touched—either directly by projects in their neighborhoods or by providing jobs that wouldn’t have existed without the program. With more than 16,200 highway and transit projects underway, states are pumping billions of dollars into the economy during the peak summer construction season.

Generating True Economic Recovery
“You can’t drive very far in Oklahoma that you don’t run into a project that is either under construction or recently completed,” said Gary Ridley, Oklahoma’s secretary of transportation. The stimulus “gave us an 80 percent increase in annual federal funding – almost two years worth of funding in one year.”

According to Mark Zandi, chief economist for Moody’s Analytics, the Recovery Act packed a “very large economic punch. It made for good economic policy. It has been instrumental in bringing an end to the recession as quickly as it occurred. I think it was just a magnificent accomplishment.”

In Ohio, a record number of construction workers—nearly 9,500 across the state—were on stimulus-funded transportation projects in July. Ohio reports that this is the largest single-month report for the state since projects began in mid-2009. Summer payroll has exceeded projections, with nearly $35 million in paychecks written in just a three-month period (June–August).

For Ohio’s contractors, the state is averaging pay-outs of nearly $10 million each week in stimulus funds alone (close to $50 million when the state’s regular funding is included). Most of the stimulus work has been on highway and bridge construction projects, as well as for new state investments in railroad connections and water ports along Lake Erie and the Ohio River.

In Oklahoma, almost 2.5 million labor hours have been worked on projects across the state. In Washington State, $500 million in ARRA funding “saved a lot of jobs and kept our contractors working,” said Paula Hammond, secretary of the Department of Transportation.

Creating Value for the Dollar
Transportation’s success in bringing needed employment to tens of thousands of workers
and some degree of financial stability for their families is only matched by the repair, rehabilitation, and renewal of thousands of dilapidated bridges and highways, and aging transit systems.

Michael Grunwald, reporting in Time Magazine said, “It may not be as exciting as New Deal projects like Skyline Drive, but repairing battered roads (which cause congestion, damage cars and reduce fuel efficiency) and improving public transit happen to be good public policy.”

Nevada’s Department of Transportation has funded much-needed highway projects in all of the state’s 17 counties. “With almost 70 projects underway statewide and $201 million being infused into our economy, this was truly a shot-in-the-arm to our state,” said Susan Martinovich, AASHTO vice president and director, Nevada Department of Transportation.

In California, the historic Chester Avenue Bridge – first opened in 1957 in Bakersfield – will be completely replaced with funds from the Recovery Act. Not only will be bridge have new safety features and ease congestion, it will also protect the historic Padre Garces statue, an important historical landmark.

Seeing Returns on the Transportation Investment
Not only has the Recovery Act generated jobs, it is also bringing money back into the U.S. Treasury through federal income and business taxes. Moody’s Zandi notes that about 40 cents of every dollar spent is returned to the taxpayers. In addition, billions of dollars are now circulating throughout the economy as the ripple effect of the Recovery Act continues through the fall of 2010. Workers are using their paychecks to buy groceries and pay bills, and companies are buying more fuel for their equipment.

Scott Gillen, a construction manager with Upper Plains Contracting, Inc. in South Dakota said, “We definitely spend a lot more money on fuel, food, and hotels when we are out of town working on these projects. A lot of our stimulus money does make it back into the economy.”

“The American Recovery and Reinvestment Act invested more than $1.2 billion in Pennsylvania highway, bridge, and transit projects,” said Pennsylvania Gov. Edward Rendell. “We put thousands of Pennsylvanians back to work and put money in their pockets. Instead of being jobless, they were working to build up Pennsylvania and America. And the fruits of their labors delivered better transportation for people across the state now and for generations to come. Infrastructure investment is one of the best job creators we have and the Recovery Act continues to be a tremendous all-around win.”

The ripple effect continues: The National Asphalt Pavement Association saw the production of asphalt mix drop from a high of 550 million tons in 2004 to just 362 million in 2009. And that number could have been 75 million tons lower in 2009 had it not been for ARRA.

“Had it not been for the infrastructure investments included in the stimulus, tens of thousands of construction workers would be unemployed and hundreds of construction firms would be out of business today,” said Ted Aadland, CEO of Oregon-based Aadland Evans Contractors and president of the Associated General Contractors of America. “Instead, the stimulus has saved jobs, allowed businesses to survive and financed vital new highway and transit projects that will benefit our economy for years to come.”