Economic Stimulus or Simply More Misguided Spending?

2009-01-05

Executive Summary

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Executive Summary
President-elect Obama has declared that the next recovery plan must do more than just
pump money into the economy. It will also create the infrastructure that America needs
for the 21st century.
This fall, Congress asked states to submit lists of “ready-to-go” transportation
infrastructure projects that could be funded by the stimulus package. Lists from nineteen
state departments of transportation (DOTs) show that the broader goals articulated by
President-elect Obama will be undermined if Congress, the Administration, and the
states do not establish forward-looking rules for spending stimulus funds.
Only about one-third of state DOTs have released to the public the project lists they
submitted to Congress. However, a majority of the nineteen that have come to light are
badly out of touch with the current trends, public priorities and transportation system
needs that underpin the President-elect’s declaration. Most stimulus project lists from
state DOTs prioritize new highways while paying relatively little attention to repairing
crumbling bridges and roads and even less emphasis on forward-looking transportation
options, such as public transit and intercity rail. As a result, they are contrary to
President-elect Obama’s stated intention to use smart spending to reduce America’s
dependence on oil and emissions of global warming pollution.
On average, the nineteen states would spend more than 75 percent of funds on
highways and only 17 percent on public transit or intercity rail. In fact, seven states
would allocate 1 percent or less, including four that would allocate nothing at all. This
would be a step backward from even the grossly inadequate 20 percent share received
by transit in federal transportation laws since the 1970s. It runs counter to Americans’
stated preferences, declining automobile use, and rapidly increasing transit ridership.
Of the fourteen state lists for which adequate data on types of proposed highway
spending were available, states on average would divert the majority of highway funds
for new and expanded roads rather than addressing their backlog of repair and
maintenance projects. More than a third of states would use less than a quarter of road
funds on backlogged repair or maintenance.
To prevent a misspending of recovery funds, Congress the next Administration and state
leaders should apply six principles:
(1) Any road funds should go first to maintenance and repair of structurally deficient
bridges and roads, not new highways or lanes;
(2) The combined total for public transit, intercity rail, and bicycle and pedestrian
projects should be no less than funds for highways;
(3) Public transportation funds should include support for operations so agencies
can accommodate the rising demand.
(4) Surface Transportation Program highway funds should be distributed as under
current law so that a portion of resources flow directly to metropolitan areas that
know best about which local projects are needed;
(5) All states, cities, and agencies should publicly disclose the stimulus lists they
have submitted;
(6) Direct recipients of stimulus funds should report on how money was spent and
any transportation spending that it displaced.
The economic recovery package will present an opportunity to advance widely
recognized, new transportation priorities for the 21st century. It will be up to Congress,
the Obama Administration, and the states to make sure that happens. So far, however,
too many of the states are off to a troubling start.