Iowa turning stimulus road funds around quickly

The U.S. House Transportation and Infrastructure Committee has been keeping track of how states are spending the stimulus funds allocated for roads. On September 2 the committee released a report ranking the states according to how much of the American Recovery and Reinvestment Act funding for highways and bridges had been put to work as of July 31. This pdf file contains the state rankings.

Iowa ranked second overall, having put 75 percent of its stimulus road funds to work by the end of July. Join me after the jump for more details from the report and analysis.  

Of approximately $358 million Iowa received for highway and bridge projects, 85.1 percent was under contract and 74.9 percent was for projects already underway as of July 31. That’s more than double the national average. Nationwide, about 40 percent of the stimulus road money was under contract and 32 percent funding construction that had already begun by the end of the July. Only 11 states had put even 50 percent of their stimulus road funds to work by that time.

Governor Chet Culver said in a statement,

“The Iowa Department of Transportation and our local transportation officials have been great partners in implementing the federal recovery program to improve our highways and bridges in Iowa. By moving quickly in using these funds, the DOT has accelerated several projects that will contribute to rebuilding and improving our state’s infrastructure,” said Governor Culver. “As a result, more Iowans are employed doing this important work as dozens of key projects around the state have been accelerated.”

Speaking to the Des Moines Register,

Scott Newhard, vice president of the Associated General Contractors of Iowa, said the federal stimulus program has had an overwhelming positive impact on the state’s road construction industry.

“This has meant that a lot of people have had good-paying jobs who would not have been able to come back to work this summer,” Newhard said.

Slightly more than $1 billion was spent on city, county and state road construction projects for the 12 months ending June 30, which was a record, Newhard said. The next closest year for Iowa road spending was the 2006 budget year, when $678 million was spent, he added.

This page on the official site for American Recovery and Reinvestment Act funding in Iowa has more detail on how the stimulus money is being used.

Earlier this summer, a report from Smart Growth America showed that Iowa is wisely spending more than 90 percent of the stimulus road funds on repairing existing infrastructure rather than new road construction. This “fix-it first” approach makes economic sense:

While adding new roads or road capacity is often necessary, repair projects have been shown to provide greater benefits in the long run. Road and bridge repairs produce more jobs because more of the budget is typically devoted to salaries instead of equipment and land acquisition.

The I-JOBS infrastructure bonding program is also supporting road and bridge repairs this summer, which has probably helped Iowa put its federal stimulus funds to work quickly. In July $45 million from the I-JOBS program was awarded to Iowa cities and counties for road projects. Click here for more links on how the I-JOBS money is being spent.

Yesterday’s report from the House Transportation and Infrastructure Committee doesn’t explain why some states have allocated their stimulus money faster than others. The states near the bottom of the list, which haven’t even spent 20 percent of their stimulus road funds yet, may be hoarding the cash to help support their 2010 budgets. That wasn’t the intended purpose of the stimulus.

Unlike many other states, Iowa has also fully utilized the stimulus funds available for unemployment benefits, helping thousands of people make ends meet. Extending unemployment benefits generates more economic activity (“bang for the buck”) than tax cuts or most forms of government spending.

The stimulus bill wasn’t perfect, but Iowa officials deserve credit for getting the recovery funds into the economy quickly.

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