Infrastructure

On page 6 of this issue, there is an article on the progress of the American Recovery and Reinvestment Act of 2009 (ARRA) in the year since President Obama signed it. The bill was supposed to provide stimulus to the U.S. economy by providing jobs, especially in the construction sector by rebuilding America’s infrastructure. Nearly $81 billion was designated for infrastructure work, $26.6 billion for highway work alone. For those in C&D recycling, as well as everyone else in the construction industry, it looked like this could work out well in a down time when so many were experiencing down revenues and having to lay off employees. Getting these projects going would get people back to work.

But an interesting report from the FMI Corp., Raleigh, N.C., says in reality states have used the money from ARRA for short-term road projects they could get the qualifying federal funds for and then diverted their own roadwork funds to other parts of their budget. This was done because the recession has negatively affected tax revenues where how in debt most states are always appear in today’s headlines. “The real effect is that ARRA has been used as a crutch to perform vital upgrades, and state financial woes merely postponed until tomorrow…The artificial assumption that never-ending emergency funds can be procured and applied to standard public works continues to be perpetuated by state and federal officials,” says the report titled, Trafficking Stimulus: Highway Funds Won’t Fill Infrastructural Shortfall. (www.fminet.com)

The program started out well, as more than 6,000 projects were completed or almost completed in the first year. FMI says experts agreed it helped states from going into deeper debt by getting vital projects finished. But as the contract deadline passes in September 2010, the prediction is that the impact of ARRA will fade. “If Congress does not intervene, FMI foresees a dramatic drop-off in highway construction spending and other infrastructure-type projects once the stimulus wave passes. In fact, the situation may become even more dire if a successor to the current highway bill (SAFETEA-LU) does not pass, or if the level of funding in the bill remains the same or less.” Congressional help would be in the form of a new highway bill that would increase current spending.

But the states’ continuing budget crisis will still cause problems for all infrastructure work, says FMI. “States have been operating hand to mouth on federal stimulus money, though the intent of the funds was to stimulate economic expansion. When the supplementary funds run out, sustained budgetary strife at a state level will again put the overall economy at risk.”

There is real economic impact from using stimulus money to rebuild America’s infrastructure. Not only will people have jobs to perform these projects, but it will also improve the country’s international competitiveness in the long run, which the United States will need to compete against rising powers such as India and China. So for bang for the buck, nothing will beat both short term and long term economic stimulus than putting funding into all types of infrastructure. For C&D recyclers, this will provide more markets for the end products.

William Turley
C&D World Associate Publisher & Editor
CMRA Executive Director
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