States' choices delay impact of stimulus funds

WASHINGTON — Federal stimulus money to fix America's highways is stuck in the slow lane in some states, including a few that are suffering from some of the nation's highest unemployment rates.

In California, for example, where the 12.4 percent unemployment rate is the third worst in the country, officials are rolling their highway money out far more gradually. As a result, the Golden State is far behind other states in the percentage of projects it has started.

More than a year and a half after Congress passed a massive plan to stimulate the economy and get Americans working, California has yet to start 41 percent of its highway projects, according to a McClatchy analysis of the most recent federal data.

While some states have put their money to work quickly, others chose projects that have been slower to produce jobs, and so the nation is far from fulfilling President Obama's prediction that the highway stimulus dollars would create or save 150,000 jobs by the end of this year.

So far, according to an analysis of White House data, the highway stimulus spending has produced about 92,000 jobs. While administration officials said last week that the highway program is "on track" to meet its goals, a Department of Transportation stimulus update report found that the program had spent less than it was expected to.

"The highway building was oversold as a short-term jobs creator," said Dan Seiver, a professor of finance at San Diego State University. "I think it is a good way to spend money. But given how capital-intensive road building is, it doesn't generate an enormous number of jobs quickly."

"If you really wanted to have a highway project that is intended to maximize employment, then build the highway with picks and shovels," he added.

Liz Oxhorn, a White House spokeswoman for the stimulus program, said the highway funding is doing what it's supposed to do.

"The more than 14,000 Recovery Act transportation projects nationwide are putting Americans to work across the country just as we said they would," she said. "We stand by our estimates."

Pitching a new plan

Obama is now pitching a $50 billion transportation spending program, saying in a speech in Milwaukee earlier this month that he'd like to create an infrastructure bank that will "create jobs immediately," as well as "make our economy hum over the long haul."

That also was the intent of the 2009 American Recovery and Reinvestment Act, the so-called stimulus bill that's pumping more than $800 billion into the U.S. economy through a mixture of tax cuts and spending programs.

The bill included about $27 billion to help the Federal Highway Administration fix the nation's roads. The money passed from the federal government to the states, which then decided what projects they wanted to fund.

When the Government Accountability Office recently examined the spending rates in several states, it found that those that emphasized quick-to-start projects already had spent a far larger share of their money than those that didn't. Illinois, Iowa, Kansas and Mississippi, the GAO said, all had rates above 65 percent.

California, by contrast, had spent 26 percent of its highway money, one of the lowest rates studied by the GAO. Beyond that, Federal Highway Administration data show that 404 of California's 981 projects, or 41 percent, have yet to be started. California will be getting $2.5 billion in highway stimulus funds, more than any other state.

Only Virginia has a higher percentage of projects it hasn't started — 52 percent — federal figures show. A spokesman for Virginia transportation officials said the state looked for projects that would have a long-term impact on the state, and that the collaborative process meant it was "several months before we began choosing projects."

Some other states were delayed by their decisions to tackle certain kinds of projects.

Paving is simplest

Among the easiest highway projects to roll out involve resurfacing pavement. It doesn't require extensive environment clearances, it's simple to design and can be bid quickly.

Yet Florida, which has the fifth-highest unemployment rate in the nation at 11.7 percent, chose to use only 12 percent of its highway money for such projects. That's about half the national average, and far lower than Iowa and Illinois, which used about 60 percent of their funds for such jobs, according to a 2009 GAO report.

Nevertheless, the Obama administration consistently has trumpeted the highway program with optimistic jobs estimates.

In April 2009, Obama spoke at a Department of Transportation event celebrating the stimulus program's 2,000th highway project. He talked about the remarkable effort, and detailed how "quickly, efficiently, and responsibly those investments have been made."

"By the end of next year, our investments in highway projects alone will create or save 150,000 jobs," Obama said. "I want to repeat that: 150,000 jobs, most of them in the private sector."

What did he mean? The White House explained last week that he meant all direct and indirect jobs — in other words, jobs that are created both by hiring road workers and the impact the money has supporting other businesses.

Even by that measure, however, a review of the most recent White House job estimates, based on spending through June 30, shows that highway projects have created about 92,000 jobs.