The transportation portion of the House stimulus package contains more than $43 billion for the Department of Transportation, including $3 billion for airports, $30 billion for highways and bridges, $9 billion for transit, and $1.1 billion for intercity rail and Amtrak.

Though there is some agreement among economists that spending on transportation infrastructure will help stimulate the economy, there are specific concerns Taxpayers for Common Sense has about the transportation section of the House’s proposed stimulus bill.

First, estimates of job creation related to this section are far higher than what will actually come to pass. For a long time, propponents of increased transportation spending have used a highly optimistic Department of Transportation figure that every billion dollars invested in transportation results in 47,000 jobs. This is one of those “if it sounds too good” numbers that paints a far rosier picture than reality can support. The number is likely half of that, at best.

The House bill also raises serious questions about how these dollars will be allocated. There is nothing in this legislation that outlines the types of projects on which the money should be spent. Instead of stipulating that this money goes to “fix it first” projects to help bring our highways and bridges up to standard, this bill leaves it largely up to the states to decide how the money will be spent.

In addition, this bill continues the pattern of short-changing metropolitan areas in the distribution of transportation dollars. Of the $30 billion for highways, less than one-quarter ($7.4 billion) is handed directly to cities or metropolitan areas. This is troubling considering the importance our cities play in driving the nation’s economic health. The remaining funds are left in the control of the state Department’s of Transportation. 

Perhaps more concerning is that this bill contains a requirement that the remaining funds be distributed with higher priority given to projects in areas with low per capita income or higher-than-average unemployment:

That in selecting projects to be funded, recipients shall give priority to projects that can award contracts within 120 days of enactment of this Act, are included in an approved Statewide Transportation Improvement Program (STIP) and/or Metropolitan Transportation Improvement Program (TIP), are projected for completion within a three year time frame, and are located in economically distressed areas as defined by section 301 of the Public Works and Economic Development Act of 1965, as amended (42 U.S.C. 3161) (emphasis added).

The Public Works and Economic Development Act of 1965 defines an economically distressed area as one that has per capita income of 80 percent or less than the national average; an unemployment rate over the past two years that is at least one percent greater than the national average; and/or is determined by the Secretary as having experienced or is about to experience a special need.

The problem here is two-fold. On one hand, this is no basis upon which we should be making transportation decisions. The greatest need and the greatest benefit should be the primary metric through which we make our transportation decisions. On the other hand, there is no stipulation that the jobs come from struggling areas, just that the projects be constructed there. There is little guarantee that this will even help eradicate the poverty or employ the unemployed in the nation’s poorest counties or areas.

Another provision that is likely to distort the decision making process is that there is no local match required on any of the money provided in the stimulus bill. Normally, state or local beneficiaries of federal transportation dollars are required to put up some of their own money. This helps ensure that only the best projects are chosen and funded. When the federal government pays for 100% of a project, however, that assurance is stripped away. Any old project will do, as long as the check can be cashed. This stimulus bill is likely to result in the dusting off of hundreds of projects that had previously been shelved because they fell too low on the local priority list.

The stimulus bill will dramatically increase the level of federal investment in our transportation infrastructure. But this bill raises significant concerns about how these dollars will be spent and whether there will be long term benefits from this massive infusion of cash. Before this bill is finalized, Congress needs to ensure that dollars flow to the projects that will have the greatest transportation benefit, that we spend this money to fix our existing infrastructure before building new, and that these dollars do not supplant sound decision-making on the state and local level.