Picking the Best Stimulus Projects for the Region
Communities across the country are gearing up to spend the infrastructure funding that President-elect Obama has promised as part of his economic stimulus plan. If anything close to the amounts being discussed nationally are actually distributed, the amount of money for our region would be enormous – even $25 billion nationwide could mean $200 million for southwestern Pennsylvania, and $500 billion nationally could mean as much as $4 billion for projects here.
Although public officials in southwestern Pennsylvania were criticized for not producing a long list of projects as fast as other communities did, most people don’t realize how hard it is to spend unexpected infrastructure money quickly, particularly when it’s of the magnitude being discussed now. Months or years of preparation are typically needed to get a major infrastructure project to the point where construction can start – it needs to be designed carefully (the 2007 bridge collapse in Minnesota shows what can happen if it’s not), the land where it will be built needs to be acquired, and necessary permits have to be approved. It would have been expensive and counterproductive for our counties and municipalities to undertake this kind of advance planning for a lot of projects, merely to have them sit on a shelf with only a hope of getting money to actually complete them.
It’s not likely that sending longer lists to Washington will result in more money. The federal government is not going to have the time to review thousands of applications and try to make judgments about which are more deserving of support. (Just imagine staff trying to justify to Congressmen and Senators why some other region's projects are better than theirs.) Funding will probably be distributed based on a formula, using factors such as population and unemployment. (The fact that our region has been doing relatively well in terms of employment and unemployment relative to other regions may mean that we will do a little less well than others in getting stimulus funding.)
As each day passes, more ideas for ways to spend the funding will come forward. Our real challenge will be building consensus about what the best projects are for whatever amount of money comes our way and then making sure they are implemented quickly and effectively. Here are some important issues to consider in setting priorities for funding:
Should we build new things or fix existing things? First of all, it will be very hard to build something new that isn’t already designed. Would there be enough money to build a light rail line from Downtown to the Airport or Oakland? Potentially. Could it be done in the next year or two? No -- there is no design, and the right-of-way that would be needed doesn't exist. Moreover, the stimulus package doesn’t include funding for long-term operating and maintenance costs. If we used the funding to build a new transit line, who would pay the costs of operating it? If we use the funding to build a new highway, who will pay to fix the potholes that develop after the first few winters? Pennsylvania hasn’t figured out how to pay for maintaining the roads, bridges, and transit systems it has, much less new ones. New parks, trails, and recreation facilities sound nice, but local governments then have the burden of maintaining them year after year. Conversely, using the funds to carry out maintenance projects that would have to be done anyway could help avoid property tax and fee increases or free up local funding for other needs. Moreover, it's easier to start quickly on fixing something that already exists than building something new. So even though building new things sounds more exciting, the reality is that most of the money will need to go to projects that improve existing facilities.
Should we emphasize quality or quantity? Although the goal is to create jobs, much of the money we receive will have to be used for construction materials, not wages. Using better quality, more energy-efficient materials could mean somewhat fewer construction jobs today, but lower maintenance costs in the future. It would be better in the long run for us to rebuild one mile of highway with long-lasting materials than to put temporary patches on a hundred miles of road. Moreover, although creating thousands of construction jobs in a short period of time may sound good, there are only so many people who have the skills and training to do construction work -- the retail worker who was laid off last month will not be welding a bridge beam anytime soon. When the stadiums and convention center were being built, the region had to bring in construction workers from other regions to fill all of those short-term jobs. And if every region of the country is building projects, there will likely not be enough construction workers to go around. Spending money on high-quality materials will help to preserve jobs in businesses that supply those materials, like our local steel industry.
Will projects create or retain permanent jobs in the future, as well as create temporary construction jobs? We could lose many of the jobs we already have in manufacturing and other sectors if we don’t maintain the roads, water and sewer lines, and locks and dams that our businesses depend on. So even the maintenance projects need to be prioritized based on their importance to the local economy. And using funds to build new industrial sites, small business incubators, and research facilities could help create new businesses and facilitate expansions of existing firms, creating permanent jobs and strengthening our tax base.
Finally, it will be important to think regionally in setting priorities. With this kind of money, we could accomplish some big goals. For example, a coordinated effort to repair and rebuild our region's sewage and storm drainage systems could reduce or eliminate sewage contamination in our rivers and flooding in many communities. Creating a carbon sequestration system to capture and store CO2 emissions from power plants could make our power plants more competitive and environmentally friendly. But we can’t do big projects like these if political pressures force the money to be spread across all 549 municipalities in the region. Just as workers cross municipal boundaries every day for jobs, our elected officials should work together across those same boundaries to achieve the greatest overall impact for the funding we receive.
(A shorter version of this post appeared in the Sunday, January 4 Pittsburgh Post-Gazette.)
Although public officials in southwestern Pennsylvania were criticized for not producing a long list of projects as fast as other communities did, most people don’t realize how hard it is to spend unexpected infrastructure money quickly, particularly when it’s of the magnitude being discussed now. Months or years of preparation are typically needed to get a major infrastructure project to the point where construction can start – it needs to be designed carefully (the 2007 bridge collapse in Minnesota shows what can happen if it’s not), the land where it will be built needs to be acquired, and necessary permits have to be approved. It would have been expensive and counterproductive for our counties and municipalities to undertake this kind of advance planning for a lot of projects, merely to have them sit on a shelf with only a hope of getting money to actually complete them.
It’s not likely that sending longer lists to Washington will result in more money. The federal government is not going to have the time to review thousands of applications and try to make judgments about which are more deserving of support. (Just imagine staff trying to justify to Congressmen and Senators why some other region's projects are better than theirs.) Funding will probably be distributed based on a formula, using factors such as population and unemployment. (The fact that our region has been doing relatively well in terms of employment and unemployment relative to other regions may mean that we will do a little less well than others in getting stimulus funding.)
As each day passes, more ideas for ways to spend the funding will come forward. Our real challenge will be building consensus about what the best projects are for whatever amount of money comes our way and then making sure they are implemented quickly and effectively. Here are some important issues to consider in setting priorities for funding:
Should we build new things or fix existing things? First of all, it will be very hard to build something new that isn’t already designed. Would there be enough money to build a light rail line from Downtown to the Airport or Oakland? Potentially. Could it be done in the next year or two? No -- there is no design, and the right-of-way that would be needed doesn't exist. Moreover, the stimulus package doesn’t include funding for long-term operating and maintenance costs. If we used the funding to build a new transit line, who would pay the costs of operating it? If we use the funding to build a new highway, who will pay to fix the potholes that develop after the first few winters? Pennsylvania hasn’t figured out how to pay for maintaining the roads, bridges, and transit systems it has, much less new ones. New parks, trails, and recreation facilities sound nice, but local governments then have the burden of maintaining them year after year. Conversely, using the funds to carry out maintenance projects that would have to be done anyway could help avoid property tax and fee increases or free up local funding for other needs. Moreover, it's easier to start quickly on fixing something that already exists than building something new. So even though building new things sounds more exciting, the reality is that most of the money will need to go to projects that improve existing facilities.
Should we emphasize quality or quantity? Although the goal is to create jobs, much of the money we receive will have to be used for construction materials, not wages. Using better quality, more energy-efficient materials could mean somewhat fewer construction jobs today, but lower maintenance costs in the future. It would be better in the long run for us to rebuild one mile of highway with long-lasting materials than to put temporary patches on a hundred miles of road. Moreover, although creating thousands of construction jobs in a short period of time may sound good, there are only so many people who have the skills and training to do construction work -- the retail worker who was laid off last month will not be welding a bridge beam anytime soon. When the stadiums and convention center were being built, the region had to bring in construction workers from other regions to fill all of those short-term jobs. And if every region of the country is building projects, there will likely not be enough construction workers to go around. Spending money on high-quality materials will help to preserve jobs in businesses that supply those materials, like our local steel industry.
Will projects create or retain permanent jobs in the future, as well as create temporary construction jobs? We could lose many of the jobs we already have in manufacturing and other sectors if we don’t maintain the roads, water and sewer lines, and locks and dams that our businesses depend on. So even the maintenance projects need to be prioritized based on their importance to the local economy. And using funds to build new industrial sites, small business incubators, and research facilities could help create new businesses and facilitate expansions of existing firms, creating permanent jobs and strengthening our tax base.
Finally, it will be important to think regionally in setting priorities. With this kind of money, we could accomplish some big goals. For example, a coordinated effort to repair and rebuild our region's sewage and storm drainage systems could reduce or eliminate sewage contamination in our rivers and flooding in many communities. Creating a carbon sequestration system to capture and store CO2 emissions from power plants could make our power plants more competitive and environmentally friendly. But we can’t do big projects like these if political pressures force the money to be spread across all 549 municipalities in the region. Just as workers cross municipal boundaries every day for jobs, our elected officials should work together across those same boundaries to achieve the greatest overall impact for the funding we receive.
(A shorter version of this post appeared in the Sunday, January 4 Pittsburgh Post-Gazette.)
posted by Harold D. Miller at 8:24 AM
2 Comments:
Would there be enough money to build a light rail line from Downtown to the Airport?
Light rail to our near empty and dead airport would be one of the biggest wastes of infrastructure spending. Having ridden the trains to airports in regions such as Chicago or Philly, where hardly anyone took the train to the airport, if we are going to spend $1 billion or more on light rail expansion the most logical thing to do is complete the spine line. Unlike the light rail to the airport, the studies for the Oakland to downtown connection have already been done, the costs and alternatives have already been published, the only thing left to do is decide on the best route and how far to extend it. When you combine the Oakland-to-downtown light rail with a few of the other regional passenger rail projects that are being studied, our public transportation and opportunities for TOD will be looking very promising.
I have read Jan Lauer's report on CCS. While and I would support a CCS demonstration plant in the region if the federal government ever decides to restart FutreGen. I used to think FutureGen was really the future of power generation until I started hearing about the cost of CCS, and the uncertainties and difficulties in securing the storage of all of the sequestered C02. Right now the cost of a CCS system, at $30 to $80 per ton of sequestered CO2 (DOE's estimate), is far too expensive, and it doesn't look like the cost will be coming down anytime soon.
The billions it would take to build an CCS system that actually does what it is supposed to do would be better off spent on proven clean technologies like baseload solar, wind, or geothermal. Yes, we have an abundance of coal in this region, which is why most public officials in the area are pushing this myth known as clean coal, but the US also has enough solar, wind, and geothermal capacity to meet our growing electricity demand.
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