Stimulus Funds Move Unevenly
This story appears in the June 15 print edition of Transport Topics.
Federal funds to stimulate highway projects are moving in fits and starts through the bureaucratic funding pipeline, delivering new work for some fleets while others get no benefit from the $26.7 billion economic recovery effort.
Truckers, contractors and experts described that pattern as the pace of work picked up and states rushed to meet a June 30 deadline for obligating money to specific projects.
“We are just now getting into the serious construction season,” said William Buechner, chief economist for the American Road & Transportation Builders Association. “A lot of the projects should be starting right now.”
“It’s pretty impressive that the states have done as much as they have in barely three months,” Buechner added, saying the states’ pace of spending stimulus money is twice as fast as a typical federal highway grant.
Wilson Whitehurst, president of liquid asphalt hauler Whitehurst Transport, based in Richmond, Va., concurred.
“During the second half of the summer, I expect to be pretty busy,” he told Transport Topics on June 10. “Quite a bit of work has been let in the past month. None of it has started yet. We are glad to have the work. ”
Calling the money “a Band-Aid,” Whitehurst said stimulus funds are simply replacing a shortfall in state transportation funding resulting from legislative gridlock.
However, Richard Thompson, president of a trucking company located less than 100 miles west in Concord, Va., disagreed.
“It [stimulus money] was supposed to be for shovel-ready projects,” said Thompson, who heads dump-truck operator Thompson Trucking Inc. “The city of Lynchburg sent in $150 million to $200 million in projects. They didn’t get a dime.”
“There is no work here to bid on,” he said. “Ninety-nine percent of the money went to Northern Virginia, Tidewater [the Norfolk area] and Richmond. They are blessed with the lowest unemployment rates. There is 15 to 20 percent unemployment in Lynchburg and Danville. If you are going to create opportunities, obviously you should create them where the unemployment is.”
Others also were disappointed.
“We haven’t seen any trickle-down from the stimulus,” said Jack Riley, president of flatbed carrier Cardinal Transport Inc., Coal City, Ill. “We should be doing beams, concrete reinforcement, rails, things like that. From what we are told, general contractors haven’t seen hardly any business.”
Riley said he didn’t expect business to improve.
“If [highway] work hasn’t started yet, it is going to be too late for this season,” he explained. His business has improved in other areas, such as home and garden shipments and building materials moved to Houston.
Farther west in Illinois, truckers should receive about $1.2 million, or 10%, of the revenue from two bridge and resurfacing jobs on interstate highways, said Jim Hayne, president of General Constructors Inc., Bettendorf, Iowa.
He told TT the work, which just began, added 40,000 more man-hours for his firm, not counting the five trucking companies providing materials for the jobs.
In the West, Donald Laskey, president of Laskey-Clifton Corp., Reedsport, Ore., said in a June 5 conference call that he won a $5 million asphalt job despite mounting bid competition.
Despite mixed experiences, Kenneth Simonson, chief economist of the Associated General Contractors of America, a trade group, told TT, “Stimulus will be the best thing that happens to construction, and construction-dependent trucking firms, in 2009 and 2010,” because it boosts economic activity.
However, not much has been done so far.
Contractors and their vendors, such as truckers, received just $65 million as of May 31, or $1 for every $410 that is in the program.
The mixed picture also appeared in stimulus program statistics. Wyoming assigned 98% as of May 31, while Ohio was at 20%.
Scott Varner, spokesman for the Ohio Department of Transportation, said the state moved more slowly because it solicited comments from communities and individual citizens before beginning the typical two- or three-month cycle of receiving bids and awarding project contracts.
Ohio so far has awarded 17 out of 201 contracts.
Ohio’s first project began June 8 in the Cleveland area where Great Lakes Construction Co. of Hinckley, Ohio, won a $1.8 million contract to repair a bridge.
Other states moved faster, including nearby Pennsylvania, whose first job started May 1.
New England states had a head start because their 10-year transportation plan was in place when stimulus money was awarded. Missouri and Iowa also had project lists ready when money was awarded.
