Behind the Headlines

Note: This is the first in a new blog series about the issues that affect the Construction Industry.

Recently, the Obama administration announced that it is making $473 million in unspent highway funds available to states, with the purpose of using the money to improve infrastructure and create jobs.

Perhaps the first question on everyone’s mind should be: Where exactly is the money coming from? The funds were originally incorporated into 4 spending bills from 2003 to 2006 that were directed towards congressional pet projects, but for one reason or another were never used. In some cases the money went unspent because there was an error in writing the bill, the project did not ultimately need the funds, or because the funds were not sufficient enough to aid in a given construction project.

That last reason raises a serious issue with the funds allocated by the White House. Earmarks often go unspent because they are just a small portion of the money needed to tackle massive projects. Much of the money offered to states went unused simply because the amount was too small to make a difference.

The money given to each state is directly tied to what each state initially did not use from their earmarked funds. For example, Alabama stands to receive the largest amount of funding at $51.1 million. At the other end of the spectrum, however, North Carolina will receive a paltry $703,634. Wyoming, with no unspent earmarks, will get no money.

On paper, almost half a million dollars may look like a lot of money.

When you consider, however, the fact that the money is divvied up among 49 states and the enormous average cost of most construction projects, the gesture seems to lose some of its luster. It’s useful, but in the end it may not do much help to address the myriad infrastructure issues facing the country.

What the country really needs is a long-term transportation bill that addresses our heavily deteriorated roads and bridges. Congress passed a two-year, $105 Billion Transportation bill earlier this year, which is a step in the right direction. However, it’s important not to underestimate the condition of our heavily-traveled transportation network. Recent estimates indicate that a bill that commits to for spending $2-$3 trillion dollars over the next decade is what is needed to address the nation’s infrastructure problems. With many roads showing their age under the wear and tear of longer than expected usage, it’s clear that we need to address these issues - in a serious manner - now rather than later.