Episode 28 – Stimulus and Politics

Topics: Economic Stimulus, Georgia Politics

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Episode 28 – Stimulus and Politics

Hello everyone and welcome to Talking Traffic. My name is Bill Ruhsam and I host this podcast and its sister website, talkingtraffic.org. Today is March 2nd, 2009.

Today I’m going to talk about two things, and these things are entirely my own opinion. I usually try to avoid opinionating on this podcast because it is educational rather than political, but right now the thing that everyone is talking about is the stimulus package, and that means politics. The second thing I’m going to talk about is specifically State of Georgia politics so you might want to just turn the podcast off when I switch to topic two. I won’t feel bad if you do. I promise not to include anything at the end that you’ll wish you had listened to. After all, that would be mean.

First off, the Economic Stimulus Package and what it means for transportation. Let me rephrase that. What *I* think it means for transportation. The big ticket items are these: 26.725 Billion dollars for Highway Infrastructure Investment, 8 Billion dollars for Rail, 6.8 Billion dollars for transit. There are plenty of others. The dollars going into the highway transportation pot are being distributed according to the normal federal dollar formulas that I’ve described in previous podcasts although if you want a review, go to talkingtraffic.org and check out my blog post of February 25th. These dollars are being assigned to the now-famous-euphemism, the Shovel Ready Project. Basically, the money needs to be assigned to a project and the contract let within 120 days of 21 days after February 17th. February 17th is the day the bill was signed into law and the 21 days is what the law requires for a timeframe for the moneies to be apportioned to the states. Anyway, after 120 days, the mean old secretary of transportation will descend like a valkyrie and steal 50% of what hasn’t been assigned, less the amount already under contract. So the way I read the law, as long as a state can get 50% of the money under work, they can hold on to the rest for later projects for up to one year, at which point they lose the rest. So by February 16th, 2010, they’d better have spent their allotment, or it’s gone and will be reassigned to other states. Let me emphasize that I’m glossing over a lot of the details of this bill. If you want, you can read it for yourself at the link in the show notes. I recommend it if you want to get a headache or go to sleep.

That 120 day and 365 day deadline is the shovel-ready aspect of the apportionment. And it’s the way that they have ensured that only small and/or mediocre projects will be let. Why? Because you can’t get a quote/unquote “good” project out the door in 365 days. “Good” projects almost always have impacts to people’s property and the environment. Getting environmental clearance and acquiring all of the right of way from individual property owners does not happen quickly. Even under the best circumstances, it can take from 6 months to three years. This means that only “good” projects that happen to already be in the right of way acquisition phase or don’t have much right or way to acquire are going to come in on time. And furthermore, any project that is already in the r/w acquisition phase is probably already fully funded! How else would they be buying right of way? So, the only projects that will probably end up being funded by the stimulus package are small projects that don’t acquire right of way or impact the environment, or projects that have been cleared and are sitting on a shelf somewhere. Except, the concept of a “good” project being shelved is generally a fairy tale. The reason plans are shelved is because no one could drum up the funding or because it was rates as infeasible. This means that it wasn’t a very good project to begin with. But now it will get funded and probably have minimal return outside of the people who are employed while construction is under way. The small projects that will be funded are those that can be designed and cleared and contracted within the year. Those are probably safety projects, like installing guardrail or improving sight distance, or intersection projects where all work can be done within the existing right of way.

Now, I’m sure there are counterexamples to the doom-and-gloom that I’m portraying. However, I’ve talked to a lot of consultant colleagues here in GA, and I just don’t see how GA is going to manage to spend their share of the money without basically throwing a lot of it at useless contracts. I hope that I am proven wrong.

The second item on today’s agenda is the brouhaha going on in the Georgia legislative and executive branches. In case you don’t live in Georgia, let me sum up what’s been going on for the past few years. First off, Governor Purdue decided to implement the “Fast Forward” program which tried to construct 18 years of road projects in only six. This was to be accomplished by borrowing against future federal monies, not yet acquired. That was in 2004. At the time, this was a perfectly all right thing to do, and you won’t hear me criticizing it. Unfortunately, it was a gamble (sorry, an Investment) that did not work out. Things started to slide. Keep in mind that we’re still talking about times prior to the housing collapse and credit crunch. So, 2006 rolls around and people are complaining that things aren’t getting done at the Georgia Department of Transportation. The then-current GDOT commissioner resigned and was replaced by a new one, Dr. Gena Evans. Dr. Evans’ emplacement at the top job for GDOT was controversial from the start, largely for political reasons rather than anyone’s argument about her competency. That was in 2007. Dr. Evans kicked off a massive audit of every part of the agency, her intention being to root out inefficiency and get things going again. One of the things her audits turned up was that there were a large number of projects “on the books” but not very many that were active. I think the numbers were about 9000 projects but only 1500 or so were funded and being worked on. During this time, the Georgia Legislature was tackling the problem that transportation funding in Georgia was about 1.3 billion dollars per year short. To compare, the annual budget for Roadway projects is about 2 billion. That’s a large discrepancy and led to a brand new program in mid 2008 called the Project Prioritization Process. This process froze most new contracts and halted the progress of projects that were under way. The intention was to use an objective metric to prioritize every project that was on the books and only keep those that made sense. Then came the housing crisis and the credit crunch. Projected tax revenues for transportation funding plummeted even further. Now we’re in 2009. The governor is cutting a deal with the lieutenant governor and the speaker of the Georgia house to steal all of the transportation funding from GDOT and give it to a brand new entity which will be layered on top of the existing bureaucratic structure. this entity will comprise persons appointed (not elected!) by the Governor, the Lieutenant Governor, and the Speaker. This entity will control every dime that is spent on transportation in Georgia with the exception of 10% which is being tossed, bone-like, to the legislature.

I think that this is a horrible idea. Both as an engineer and as a tax-paying citizen.

For one thing, this is such an obvious power grab and money-grubbing arrangement that it is insulting to see it play out. The 10% reserve for the legislature is a transparent sop to politicians who want to be able to throw money at their districts. For another, this change in funding authority places too much power in the hands of the Governor. The Governor will appoint 5 of 11 members of the new entity. The Governor’s picks are not subject to ratification, unlike the 6 picks by the lieutenant governor and the Speaker. Finally, and what bugs me the most about this, and indicates what a stupid idea this is, all members of the new entity serve “at the pleasure of the appointing officer.” That’s a quote.
So, instead of an elected board overseeing the department of transportation, you have an appointed entity, subject to immediate recall, dominated by the governor’s picks. Oh, by the way, the Governor also gets to pick the Secretary of Transportation, who is to implement the entity’s policies. And from 8 years of Bush governance, we know how policies can be mangled by the “interpretation” of the implementing agency.
Of course, this hasn’t passed the legislature yet. There’s still a lot of wrangling to do. It just came out of the senate subcommittee and his heading for the floor. I hope my representatives will not let this abortion pass through. I’m not advocating for the un-changing nature of the GDOT; It has its own issues that need to be fixed. However, this proposal by the governor is a power grab and nothing else. If you’re in Georgia, I urge you to contact your legislators and tell them that this is not an acceptable bill.

Ahhh. That’s it. I’m done. Next episode will be about more straight factual information. Thanks for listening to me ramble on about politics. Maybe I can make it an entire episode to read the U.S. Code 23 to you that has to do with funding apportionments!

SEC. 120. (a) For fiscal year 2008, the Secretary of Transportation shall–
(1) not distribute from the obligation limitation for Federal-aid highways amounts authorized for administrative expenses and programs by section 104(a) of title 23, United States Code; programs funded from the administrative takedown authorized by section 104(a)(1) of title 23, United States Code (as in effect on the date before the date of enactment of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users); the highway use tax evasion program; the programs, projects and activities funded by the set aside authorized by section 129 of this Act; the Bureau of Transportation Statistics; and additional obligation limitation provided in this Act for the purpose of section 144(e) of title 23, United States Code;

This episode of talking traffic is released under a creative commons 3.0 attribution not commercial no derivatives license. Feel free to inject it into your next transportation stimulus bill, but please make sure you don’t alter it, and that you credit me and TalkingTraffic.org. If you have questions or comments, you can send an email to bill at TalkingTraffic.org, or just leave a comment on the show notes. The music you hear is by Five Star Fall, and can be found at Magnatune.com.

Until next time, have a good week, and stay on top of your legislators.

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