State launches into transportation projects with stimulus money

Originally published in the Baltimore Sun

Michael Dresser | Baltimore Sun Staff Writer Aug 25, 2009

The $610 million in federal money allocated to Maryland transportation projects, which began trickling into the state's economy this spring, is now flowing steadily - resurfacing roads, upgrading transit facilities and boosting demand for contractors from Western Maryland to the Eastern Shore.

Although many question the stimulus program's impact - in a recent Gallup Poll 57 percent of Americans said it was not working - in the short term there is little doubt that the Obama administration's effort is creating and preserving construction jobs in Maryland.

Without the federal stimulus money that's financing road resurfacing projects on the Eastern Shore, David C. Bramble says, his paving company would have no work.

"The people I work with would be in trouble. We'd all be in the unemployment line," said Bramble, president of Chestertown-based David A. Bramble Inc.

Work has started on 50 highway projects worth more than $168 million across the state, and roughly the same amount is in the pipeline. The pace of the work is increasing; 20 road projects began in July, compared with nine each in May and June. On the transit side, projects worth $33 million have started and almost $100 million in work has been given the green light.

The heaviest spending has been on road-resurfacing. Most have been modest projects of $5 million or less, but Baltimore received $11 million for a much-needed resurfacing of Northern Parkway from Falls Road to Park Heights Avenue.

Transit projects have ranged from rebuilding the crumbling platform of the Laurel MARC station - a $2.1 million job that was used as a backdrop for a visit by Vice President Joe Biden - to the purchase of hybrid buses for localities.

Maryland's acting transportation secretary, Beverly Swaim-Staley, is pleased with the progress so far. "The good news about this is we were able to put these projects back on the street quickly. I think we met our goals."

Some contractors complain that the federal money is simply keeping the industry on life support while the state diverts transportation money to other purposes. And questions remain about what will happen when the money runs out next year. One leading Maryland economist warns of a "double-dip recession" if the stimulus expires before private sector demand revives.

For now, however, some contractors are relieved the funding is keeping the bulldozers running at a time when state and other federal transportation funds are scarce because of falling revenue.

According to the Maryland Department of Transportation, Maryland's stimulus money is expected to support as many as 17,000 jobs in the state. About 100 of those jobs are with P. Flanigan & Sons and its subcontractors, acording to company president Pierce Flanigan IV. He said the stimulus program is financing his company's $4.6 repaving contract to resurface Interstate 83 just south of the Pennsylvania line as well as two repaving jobs at BWI Marshall Airport - one of them a $36 million giant that is partly funded through the federal program.

"They're a significant part of our construction program for this year. There's no doubt it's preserving jobs," he said. "In terms of employment, we're at the same point we were last year."

In addition to highway work, Flanigan's Baltimore-based company also recycles asphalt and concrete to use in its projects and sell to other contractors. He said the asphalt recycling plant on Monroe Street is running two shifts, with one of them devoted to producing material for the I-83 project.

Each shift employs five or six workers, said Bill Adams, manager of Flanigan's sprawling West Baltimore asphalt and concrete producing complex. Heavily Democratic Maryland was one of the first states to pounce on federal dollars when they became available after President Obama won passage of the American Recovery and Reinvestment Act in February. In March it became the first state to get a project started - repaving a stretch of New Hampshire Avenue in Montgomery County - at a time when some governors were balking at accepting federal funds.

That $2.1 million job, according to the state transportation department, is now 30 percent complete. A handful of resurfacing and guardrail projects in Western Maryland have been finished, and a half-dozen jobs on the Eastern Shore (including several of Bramble's contracts) are more than halfway done.

Many more have just begun or are in the pipeline - with the bulk of the money yet to be spent.

"The stimulus package is about to have significant impact on construction over the next six to nine months," said economist Anirban Basu, chief executive of Sage Policy Group.

Basu, whose firm has been tracking construction spending on behalf of the Associated Builders and Contractors, said Maryland has been "particularly aggressive" in deploying the federal money for Main Street projects.

"Maryland was never ambivalent about the stimulus dollars. The more dollars, the better," he said.

Christopher Summers, president of the conservative Maryland Public Policy Institute, said the stimulus, which he opposes as "welfare to the states," will at least let the state catch up on much-needed road repairs.

But he doubts the spending will have much impact on the recession. "I don't think it's going to create new jobs per se."

Whether the stimulus will pull Maryland out of its economic downturn has yet to be seen, but there's little doubt that it will leave the state's motorists with smoother driving services.

"There's no lack of good projects out there," said Bramble, whose company is gearing up to begin work on widening a stretch of Route 404 -- the main road to the Delaware beaches - after Labor Day.

State Highway Administrator Neil J. Pedersen said stimulus money has been focused on road resurfacing because such projects took the biggest hit when Maryland deferred about $2 billion in work last year as a result of plunging revenues. Little stimulus money is going to bridge rehabilitation because the state gave those projects priority when making its cuts, he said.

Basu said his worry is that when the stimulus money begins to dry up in about a year, private sector demand may not have rebounded. The result, he said, could be a "double-dip recession" in which growth falters again in 2011-2012.

Swaim-Staley said the state's transportation program is in good shape through fiscal 2010, which ends June 30. "Once we get into fiscal year 2011, we're going to be back where we were."

Maintaining momentum on Maryland transportation projects depends mainly on whether Congress and the Obama administration can reach an agreement on a new six-year federal transportation bill, she said.

"If they don't, we're going to have problems."

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