The Biden administration is preparing to release an infrastructure stimulus package, potentially as soon as next week. We’re having flashbacks to the Recovery Act of 2009, a package that missed a lotof opportunities. Here’s why the way funding is allocated matters as much — if not more — than how much funding is proposed.
Is this the transportation system we want to double down on? Fortunately, those involved in this crash on Houston’s I-45 suffered no life-threatening injuries. Photo by Adventures of KM&G-Morris on Flickr’s Creative Commons.
The vaunted “infrastructure stimulus” might be upon us, with rumored price tags (big price tags) for prospective infrastructure investments leaking out of the White House.
We’ve been here before: the 2009 Recovery Act put a lot of money into existing federal transportation programs—rather than targeting the funding for a specific purpose —in order to move money quickly. But these programs weren’t designed to solve the issue at hand: short-term job creation. So they failed to create the most new jobs as they could have.
This time around, Americans want an infrastructure package that addresses economic recovery through job creation; rebuilds crumbling roads, bridges, and transit systems; and reduces climate emissions and racial inequities. But our existing federal transportation programs aren’t built to achieve these outcomes—no matter how much more money is pumped into them. In fact, they often produce the opposite result: building new infrastructure we can’t afford to maintain, driving up emissions and creating barriers to people of color trying to get to work and essential services.
So as the White House unveils its approach to infrastructure, listen less to the price tags or the messaging and look more at specifically how they allocate the funding. For example:
If they say they’re “repairing crumbling roads and bridges” but just fund the existing transportation program that has failed to do so for decades then they’re not repairing crumbling roads and bridges.
If they say they’re investing in climate by electrifying vehicles but double down on a vehicle-only transportation system then they’re investing in climate half-heartedly — undermining the efficiencies they are getting from cars with inefficiencies and burdens from the transportation system.
If they say they’re helping communities of color but give states money to displace those communities in order to widen a road (like I-45 in Houston) or allow the construction of deadly roads that disproportionately kill Black and brown people then they’re not helping communities of color.
When it comes to infrastructure, the words often do not match the funding. We should not be fooled by that. We need to look at what they are doing with the money and hold them accountable for what they are promising.
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.
As we tried to claw our way out of the Great Recession a decade ago, Congress gave states billions in new funding for transportation capital projects in the American Recovery and Reinvestment Act, or better known as the stimulus. With a COVID-19 recession all but certain, America will need another stimulus. To help Congress and the public learn from our last attempt to create jobs and support economic recovery through infrastructure investments, our short new report provides six lessons and six recommendations from our deep experience evaluating the Recovery Act over 10 years ago.
Because the purpose of the Recovery Act was to create jobs, states were required to report how they spent that money, and how many jobs they created with it. Which means we have good data to use, based on state-reported documentation of how they spent ARRA money, and how many jobs their stimulus-funded projects created.
Did states take advantage of the flexibility given to them by Congress to invest in ways that would create the maximum number of jobs? Did Congress select programs for funding that were well-suited to the primary task of job-creation? The two biggest overall lessons gleaned from our review are:
The Recovery Act was meant to create jobs above all else, but that was not how we targeted or governed the infrastructure spending.
In an attempt to do things quickly, Congress defaulted to existing programs that were poorly tailored to the tasks at hand.
As our Repair Priorities report showed, even with the extra $26 billion for surface transportation kicked in all at once, the country’s roads still got worse, not better. That’s because our federal transportation program gives states billions each year without even the most basic requirement for them to repair what they have before building anything new. The 2009 stimulus was no different. Set free of any obligation to address their repair needs first with stimulus dollars, scores of states failed to prioritize repair with their ARRA funds, choosing new construction instead. Eleven states spent less than half of their money on repair, and nine of those states had worse roads in 2017 than in 2009.
This failure of stewardship was also a missed opportunity to have the greatest impact on creating jobs. A wide variety of other research consistently finds that on average, road repair produces 16 percent more jobs per dollar than new road construction. This makes sense considering the fact that new roadways and roadway expansions usually require right-of-way acquisition, which creates very few jobs (and no construction jobs), as well as more planning and environmental review, which also creates just a few jobs. Repair also takes care of an existing asset, saving money in the long run. Expansion creates a pricey new liability.
If Congress is interested in having the greatest impact, requiring repair with any stimulus dollars first is possibly the single best way to maximize the impact.
The second would be to invest heavily in transit, including repair. In this analysis we found that an ARRA dollar spent on public transportation produced 70 percent more job hours than an ARRA dollar spent on highways. Each mode showed clear differences in jobs produced per dollar: Transit preventive maintenance had by far the highest direct job-per-dollar result for transit, followed by rail car purchase and rehabilitation, infrastructure, and bus purchase and rehabilitation.
As Congress and the nation debate the next phase of stimulus, we can and should benefit from the lessons we learned from the last stimulus. Some kinds of spending create more jobs, faster, than others. Limiting spending to capital only (and leaving out operations as ARRA mostly did) not only eliminates one of the most productive forms of spending, but it also creates future costs and slows the speed of economic recovery.
We should direct federal infrastructure dollars to the types of projects that create what we need. In the face of unprecedented unemployment, that means projects which create the most jobs the fastest, and those that connect people to as much economic opportunity as possible.
This will mean public transit—especially operations and repair—and road repair.
Lessons are of little use if we don’t learn from them. We hope Congress takes note of their own history here with any potential infrastructure recovery package.
Message from the director
For those of you who were involved in implementing Recovery Act programs, engaged in advocacy on the stimulus, or worked to analyze how those billions were spent in some way, we also want to hear what you learned. Hear about the report briefly from Beth Osborne, the director of our Transportation for America program, who also has some questions for those of you who experienced the stimulus firsthand—and then share what you learned.
With the $2 trillion rescue plan approved, Congress is already eyeing another COVID-19 relief and recovery package later this month. Based in part on what we learned from the 2009 stimulus, Transportation for America contributed infrastructure proposals to Smart Growth America’s detailed recommendations for economic stabilization and recovery. We must ensure that any further stimulus empowers communities to be economically prosperous, socially equitable, and environmentally sustainable.
After passing the largest stimulus in United States history last week—$2 trillion, with $25 billion in aid for transit agencies and $1 billion for passenger rail—members of Congress know that more is needed to protect the country from the immediate and long-term impacts of COVID-19, and plan to work on another stimulus later this month.
With the economy crumbling and millions of Americans’ lives at risk, the U.S. can’t afford to waste this opportunity for relief. We can’t squander our money on programs that fail to create the most new jobs or build lasting economic prosperity. It’s critical that this funding go to investments that give all Americans the opportunity to live in places that are healthy, prosperous, and resilient.
As part of Smart Growth America, we contributed to a new short SGA report outlining 20 recommendations for any economic recovery package that will boost our economy and give Americans equitable, accessible, safe and low carbon transportation options into the future. Here’s a summary of the transportation-related recommendations —read the full list here.
Invest in projects that create the most jobs: that means maintenance, not expansion
Road or bridge repair and maintenance projects actually create more jobs than building new capacity. One reason is that with a new roadway project, a huge share of the cost goes toward buying property—an activity that has little to no stimulative or reinvestment value while also creating future liabilities (new roads) in the process. Meanwhile, maintenance projects spend money faster, are open to more kinds of workers, spend less money on equipment and more on wages, and spend less time on plans and permits. In fact, roadway maintenance creates 16 percent more jobs per dollar compared to roadway expansion.
And luckily, the U.S. is swimming with potential roadway maintenance projects, as found in our report Repair Priorities. It would be a win-win to require states to actually make progress on our repair backlog—something too few states did with 2009’s stimulus. Doing so would create the most jobs while finally addressing our “crumbling” infrastructure—instead of just using that rhetoric to approve new money that then gets spent on new roads.
Give transit and passenger rail operating support, not just capital funds
The limited federal funds that public transportation receives are only for maintenance and construction. With ridership plummeting and costs for cleaning vehicles and protecting personnel skyrocketing—as well as the fallout from a rapidly contracting economy—transit and passenger rail need operating support now more than ever.
The $25 billion for transit and $1 billion for passenger rail Congress provided in last week’s stimulus is a great start. But with TransitCenter estimating COVID-19-related losses to transit agencies between $26 and $38 billion, and Amtrak experiencing unprecedented drops in ridership, both public transportation and passenger rail will still need more. Congress should increase the amount of emergency operating funding in the next stimulus, and target transit agencies that need it the most.
Expand transit and passenger rail
An economic stimulus is a rare and powerful opportunity to invest in the infrastructure that has the most potential to reduce our carbon emissions, increase access to opportunities, and make our country more equitable. But the focus of any stimulus package should be creating the most jobs per dollar, and capital funding for transit and rail creates far more jobs than road projects, according to research on the 2009 stimulus.
Public dollars devoted to making capital improvements to public transportation systems also support thousands of manufacturing jobs, in communities small and large, in nearly every state across the country. Every $1 billion invested in public transit creates more than 50,000 jobs and economic returns of $3.7 billion over 20 years. The supply chain for public transportation touches every corner of the country and employs thousands of Americans who produce tracks, seats, windows, communications equipment, wheels, and everything else in between.
T4America has other specific recommendations for how to increase funding for expanding transit and passenger rail—including increasing the federal share of projects to 80 percent (the same as roadways). You can check those out here.
Final thoughts
Infrastructure will be an obvious topic for any stimulus, but we need a more comprehensive solution. Smart Growth America’s proposals for housing and community development are focused on the highest-returning investments that can also give more Americans a shot at opportunity. Check out the full list here, and stay tuned for ways that you can help us get these recommendations to Capitol Hill. To get updates, subscribe to T4America’s email list and follow us on Twitter.
Smart transportation spending can create jobs today and grow our economy tomorrow, according to a new report from Smart Growth America, adding a new entry to their excellent work evaluating the transportation spending in the stimulus.
The report, “Recent Lessons from the Stimulus: Transportation Funding and Job Creation”, analyzes whether states made the best use of transportation dollars in the American Recovery and Reinvestment Act. The analysis comes two years after passage of the Recovery Act doled out $26.6 billion in flexible transportation funds to the states.
The findings are pretty simple to summarize:
According to data sent by the states to Congress, the states that created the most jobs invested in public transportation and projects that maintained and repaired existing roads and bridges. The states that ranked poorly predominantly spent their funds building new roads and bridges.
Historically, investments in public transportation have generated 31 percent more jobs per dollar than new construction of roads and bridges. However, SGA’s findings show that the payoff was even larger in Recovery Act spending, with public transportation projects producing 70 percent more jobs per dollar than road projects.
Newsweek’s David A. Graham covered the report’s release yesterday and noted:
Today the unemployment rate is hovering above 9 percent — better than it would have been without the stimulus, most experts agree, but still painfully high. Why didn’t we get more for our money?
While liberals and conservatives alike blame the stimulus itself — It wasn’t big enough! It was never going to work! — the problem may have more to do with how the money was spent. It’s not enough just to inject money into infrastructure, because not all transportation funding is created equal — or at least, it doesn’t create jobs at an equal rate. As any infrastructure policy wonk can tell you, money spent on fixing up existing systems or building mass transit delivers more jobs, and faster, than building new highways.
SGA also released findings from a November poll (pdf) that found that 91 percent of voters feel maintaining and repairing our roads and bridges should be the top or a high priority for state spending on transportation programs, and 68 percent believe that improving and expanding public transportation options should be the top or a high priority.
According to the report’s state-by-state rankings, seven states and the District of Columbia spent 100 percent of their Recovery Act flexible transportation funds to preserve existing roads and bridges, and ranked among the top states. The states included: Vermont, Maine, New Jersey, South Dakota, Connecticut, Rhode Island and North Dakota. Among other findings:
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.
“SGA’s analysis aligns closely with what the American people say they want: fix what we have, provide an array of transportation options and make sure our streets are safe for everyone,” noted Transportation for America Director James Corless. “Congress ought to listen to the American people and embrace the kind of investments we need by passing a comprehensive transportation bill that prepares us for the 21st century. Absent action, we will lose needed jobs today and opportunity tomorrow.”
SGA has a more detailed write-up and full download of the report available here, and you can read Newsweek’s coverage here.
U.S. Senator Dick Durbin speaks in Normal, Illinois on the site of the new multi-modal transportation hub. Photo courtesy of the Bloomington Pantagraph.
Just over two months after T4 America Director James Corless visited Normal, Illinois, that same town of 45,000 broke ground on a new transportation hub that promises to spur the economy and facilitate the creation of good-paying jobs. The center will serve Amtrak, city and interstate buses and taxis and will be open for business within two years. Illinois Senator Dick Durbin and Normal Mayor Chris Koons were among the participants in the first ceremonial shoveling of dirt.
The project will put 300 people to work building Amtrak’s railroad cars, and create immediate construction jobs. Ronn Moorehead, the president of the Bloomington-Normal Trades and Labor Assembly told the Bloomington Pantagraph that 70 to 80 percent of construction worker’s pay is spent in his or her community.
Federal Transit Administrator Peter Rogoff was also on hand for the festivities, and Transportation Secretary Ray LaHood blogged about it today, pointing out that the hub is being funded by the American Recovery and Reinvestment Act signed by President Obama in early 2009.
Debbie Halvorson and Tim Johnson, both members of Congress representing Illinois, and State Rep. Dan Brady also played a crucial role in getting the project off the ground.
Congratulations to Normal on moving forward with a great project to improve transit access, create jobs and grow the local economy.
T4 Director James Corless speaks in Normal, Illinois on the site of the new multi-modal transportation hub. Photo courtesy of the Bloomington Pantagraph.
Last week, Transportation for America Director James Corless (right) was in Normal, Illinois, a town of 45,000 and recipient of a $22 million grant for a new city transportation hub, touting the project as a model for smarter federal transportation spending in the next six-year transportation bill.
The TIGER grant program, created in the American Recovery and Reinvestment Act of 2009, doled out merit-based federal funding for projects that merge transportation with economic development, the environment and other criteria. This new multimodal transportation center in Normal received a $22 million grant from the first round of TIGER grants earlier this year, helping to bring Amtrak trains, city buses, regional buses and taxis all in one centrally located building.
Normal Mayor Chris Koos said making uptown accessible for walking, biking and public transit was a key goal of the redevelopment effort, allowing more residents a place where they could live, eat and shop. The project also played a crucial role in attracting the Marriott Hotel and conference center, both walking distance from the site.
Other elected officials were just as effusive, with State Representative Dan Brady, a Bloomington Republican, calling the project a “shot in the arm for the economy.”
James joined 25 local stakeholders, including Representative Brady and Mayor Koos, at a press conference last week to demonstrate local support for the transportation hub. Attendees included local labor leaders and representatives from the McLean County Chamber of Commerce, Amtrak and the Bloomington Normal Economic Development Council. Staff members for Illinois Governor Pat Quinn and local Congresswoman Debbie Halvorson were also on hand.
“We think the transportation bill needs momentum and vision,” Corless told the participants. ”The reason we are here today is because we think that what Normal is doing is exactly that type of vision and kind of momentum that will give the transportation bill the kick in the pants it really needs.”
Normal should be the new “norm” for smaller cities, a example of livable and sustainable development resulting in real job creation and investment from businesses both large and small. Mayor Koos himself has been owner and operator of Vitesse Cycle Shop/Often Running in Uptown Normal since 1979. Normal’s leadership demonstrates to smaller cities that focusing on increased transportation options, investing in their town and city cores and expanding biking and walking can improve quality of life.
“We celebrate this type of spending,” said Brian Imus, state director of Illinois PIRG. “The multimodal center is an example of how to invest in a smart way.”
He added, “the next federal (transportation reauthorization) bill should encourage similar projects.” Transportation for America agrees, and is working toward a new bill that makes these types of transit hubs more easily funded and ready to move.
If projects like Normal’s can truly become the norm, that would be progress indeed.
UPDATED: We have some photos from the event on our Flickr page, and you can watch this short video of James Corless’ remarks at the event. Apologies for the quality of the audio, which is fairly quiet.
