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December 9th, 2008
THE DIG
What happens after the stimulus package?

U.S. mayors on December 9 called on President-elect Obama to channel infrastructure spending directly to cities rather than state governments.

The U.S. Conference of Mayors last week said 11,391 infrastructure projects worth $73.2 billion in 427 cities are waiting for federal government support. If funded, the mayors’ group said more than 800,000 jobs in 2009 and 2010 would be created.

This call comes at the same time of a similar call from the National Governors Association for a federal government investment in state infrastructure projects.

A state by state list of projects in waiting was also recently published by the American Association of State Highway and Transportation Officials – “50 states and the District of Columbia listed more than 5,000 highway projects totaling $64.3 billion that are ready to go if Congress were to include money for them in an economic stimulus plan.”

But local municipalities are wary of receiving federal dollars, once they are disbursed, through state governments. The mayors said the money for projects would most likely be delayed as 41 states are dealing with severe budget shortfalls – the money could go to fill budget gaps instead of to fund needed infrastructure projects. As a result, the impact of President-elect Obama’s proposed economic stimulus could be greatly undermined.

The State Government budget crisis is only getting worse

Minnesota recently announced that its projected $1 billion budget shortfall quadrupled to $4 billion – every publicly funded service in the state, including infrastructure, will most likely face cuts.

And in California, “in as few as nine days, nearly $5 billion worth of public works projects in the state, including schools, roads and bridges, could be halted or indefinitely delayed – leading to the loss of thousands of jobs,” the San Francisco Chronicle reports. The state, unless it resolves its budget, could actually run out of money early next year.

Oversight

But what is almost more concerning than the economic burdens of local governments throughout the country is the question of how to prioritize infrastructure projects and needs. For example, just because a road in ‘City A’ has received approval to be expanded, why should it receive federal dollars over a study on the expansion of mass transit in ‘City B?’ The road in ‘City A’ will create jobs now, but the mass transit study in ‘City B’ will provide more realistic transit options in the future?

Nick Taylor, author of “American-Made: The Enduring Legacy of the W.P.A.,” in an Op-Ed in The New York Times on Dec. 9, writes, “The plan by Barack Obama to attack unemployment by putting people to work on roads, bridges, schools and new energy projects sounds like a version of the New Deal’s Works Progress Administration. If Franklin D. Roosevelt is Mr. Obama’s model, and if the president-elect wants to avoid the disorganized hodgepodge that the financial bailout seems to be so far, then he should look to the structure created for the W.P.A. in 1935 to select the best plans for renovating the country’s outdated infrastructure.”

That structure was a three-step process:
- Infrastructure project applications were first screened by the W.P.A. (Works Progress Administration).
- Then, an advisory committee of government officials and representatives of farm groups, labor, business and the United States Conference of Mayors identified redundancy among the applications. The most cost-effective projects were given priority.
- The third step was a division that kept track of projects through their completion.

Sen. Chris Dodd (D – Conn.), similarly, wants to create a national infrastructure bank with a bipartisan board of directors, to be run by an executive appointed by the president and confirmed by the Senate.

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