Those of us here over at DOT want to set the record straight when it comes to whether or not Recovery Act money is getting out to states and putting people back to work. There are reports in the press, specifically in Thursday’s USA Today, that say only a fraction of stimulus dollars dedicated for construction projects is reaching states. This simply isn’t true.
So far all 50 states and the territories have obligated or dedicated $16 billion dollars of their highway stimulus money to over 5,000 construction projects. Of those projects, over 1,500 of them are underway – bids are being made, equipment and supplies are being purchased, contractors are hiring and workers are working.
The USA Today story said states have only received "$132 million from the stimulus package out of $27.5 billion earmarked for road construction funding." This is false and shows a misunderstanding of the way states get federal money for highway projects. Let me explain.
We fund highway projects through a reimbursement process, meaning states send us bills for highway work as it’s getting done. For example let’s say Virginia obligated or dedicated $200,000 of its Recovery dollars to resurface several miles of a road. Once Virginia awards a bid and the work gets underway the contractor will send the state a bill periodically for the work as it progresses. The state pays the bill then turns to us for reimbursement (which in government speak is referred to as an outlay) – in many cases they get the funds the same day.
This might sound like a funny way of doing business and we get lots of reporters who ask "why not just cut the state a check for the amount of money it will take to get the job done?" To do that would be a huge waste of taxpayer money! What if that $200,000 road resurfacing job wound up coming in under budget by $50,000? Our rigorous system of reimbursement protects taxpayer dollars because we can watch the money that is being spent. If money is wasted, the states won’t get reimbursed by us.
The $132 million figure mentioned in USA Today is an inaccurate total of how much we’ve reimbursed states for Recovery funded construction projects – our reimbursements are higher than that. But relying on those figures in no way accurately describes what is happening out in the states.
Whenever a state obligates or dedicates their Recovery dollars to a project that means it is green-lighted. States can start advertising the project and soliciting bids and once a bid is awarded contractors can buy supplies, bring workers on board and start breaking ground. It could be weeks before the reimbursement process starts so those outlays are in no way an indicator of how much money is getting to states, how much work is being done or how many people are working.
The $16 billion obligated to thousands of highway projects is the true measure of how much highway money is reaching states. There is still a lot of hard work left to do, but we here at DOT are incredibly proud of how fast, efficiently and transparently Recovery dollars are getting out the door.
John D. Porcari is the Deputy Secretary of Transportation. As Deputy Secretary, Porcari serves as the Department’s chief operating officer with responsibility for the day-to-day operations of 10 modal administrations and the work of more than 55,000 DOT employees nationwide and overseas.