$1.1 Billion Recovery Price Tag: What RI Has To Show for It
Wednesday, October 12, 2011
The state of Rhode Island has been awarded nearly $1.1 billion in contracts, grants and loans from the American Recovery and Reinvestment Act (ARRA) since 2009, spending a total of $666,370,273 on projects ranging from bridge repair and education programs all the way to tiny arts initiatives and organizations like the Boys and Girls Club.
The $787 billion economic recovery plan, signed into law by President Obama less than two months after he took office, sought to spur economic activity by creating and saving jobs and create long-term economic growth.
But critics point to the state’s 10.6 percent unemployment rate and say the plan has done little to put Rhode Islanders back to work while only serving as a temporary stopgap for fiscal problems that have only worsened over time. On a more superficial level, they also question just how much the ARRA has helped the state. The roads are still crumbling; schools are failing; and the state was still forced to address a $330 million deficit through cuts to dozens of social programs.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTDOT: Funds Have Improved Rhode Island
But Department of Transportation (DOT) Spokesman Charles St. Martin said that for more than 60 projects, the ARRA has helped address bridge repair, interstate and state road resurfacing, safety improvements, traffic signal improvements, sidewalk improvements and other important infrastructure projects. At $137,811,290, the DOT has been by far the largest recipient of funds in the state.
“The funds provided for transportation infrastructure improvements through the American Recovery and Reinvestment Act of 2009 have impacted nearly every community in Rhode Island,” St. Martin said. “The $137 million in ARRA funds supported a wide range of programs, allowing the Department to put many “ready to go” projects out on the street for construction. Most of these projects had been continually pushed forward to future years due to a lack of funding.”
Still, even St. Martin noted that transpiration funding in the state is flawed and the federal funds only served as a one-time fix.
“The Department views the ARRA program as a great shot in the arm to get backlogged projects built,” he said. “However as it was a one-time occurrence, it does not solve other important issues facing transportation funding. RIDOT continues to have more demand for projects than funding can support. As identified back in 2008 as part of the Governors Blue Ribbon Panel on Transportation and right through to the current tolling proposals, the current methods for funding transportation are inadequate and make it very challenging for the Department to maintain the state’s road and bridge infrastructure in a state of good repair.”
Langevin: Not Perfect
Congressman James Langevin, whose District has received $670,937,421 (over $250 million more than the 1st District), said the ARRA helped create millions of jobs at a time when the country was losing thousands of jobs each month.
“Following passage of the Recovery Act, our country went from losing jobs by the hundreds of thousands per month to creating jobs,” Langevin said. “ Economists from across the political spectrum have agreed that it had a positive impact, with the non-partisan Congressional Budget Office estimating that it saved or created as many as 3.3 million jobs.”
Langevin said the state benefits from dozens of projects that came from the ARRA, but he acknowledged that more work needs to be done to fix the country’s economic crisis.
“It was not perfect, but Rhode Island has experienced the benefits, including transportation and infrastructure related jobs saved through efforts like the Wickford Junction Station Project and private sector growth at companies like Alteris Renewables, which is responsible for wind turbine construction funded through the Recovery Act,” he said. “Still, our current crisis wasn’t created by any one action and no one action can solve it. We need to provide greater support of innovation, infrastructure and small businesses, and close the skills gap by preparing our workforce for available jobs.”
Who Benefited?
It wasn’t just the DOT that received millions in funds from the ARRA. The Executive office of the State received $76,377,668 in education funding, much coming from the Race to the Top funds secured last year. Additionally, the Providence School District was awarded more than $70 million in stabilization funds. Rounding out the top five recipients were the Gilbane Building Company, one of the state’s largest real estate development firms, and Brown University.
Combined, the top five recipients received nearly $400 million.
And the state has little to show for it, according to Republican State Rep. Joe Trillo, who said the state has wasted most of the money on one-time budget plugs and union jobs.
“I don’t think we have a damn thing to show for it,” he said. “I think the ship was sinking and all the money did was give us more time.”
Trillo accused the state of using hundreds of millions of dollars to close budget holes while only helping unions. He said the majority of his constituents have not benefited from the funds.
“We’re good at wasting one-time money,” Trillo said. “I think a lot of the money was to help union jobs, that’s why DOT got so much. It didn’t go to the average man on the street.”
So where would the state be without the recovery plan?
“We would have made the service cuts that needed to be made,” Trillo said. “Maybe we would have had pension reform two years ago.”
Mazze: Recovery Created Jobs
But Dr. Ed Mazze, Distinguished University Professor of Business Administration at the University of Rhode Island, said the ARRA has created thousands of jobs in the state.
“The Recovery Act funds were used in Rhode Island to create new jobs in a number of employment sectors, support existing jobs to avoid layoffs and support infrastructure projects,” he said. “Without these funds, the state would not have gained over 1,500 new jobs and in all probability would have created layoffs in areas critical to the state in safety and security and education and health care. Many of the saved jobs were at the town and city level because local government received less funding from the state.”
Mazze said without some of the improvements made from the ARRA, the state’s economy might be even worse off than it is now.
“Rhode Island has ranked at the bottom of many lists on road and bridge repair,” he said. “Some of the Recovery Act funds were used to improve the state's transportation systems and infrastructure. Without these improvements, the state's ability to attract and retain industry would be more difficult. Using any economic multiplier, it is easy to conclude that the Recovery funds not only created and kept jobs from disappearing but added to the Rhode Island economy by generating additional tax revenue from the jobs and the funds used to buy equipment and supplies used on the projects supported by the Act.”
American Jobs Act Is The Same Thing
Still, the state’s economy continues to struggle. According to URI Professor Leonard Lardaro, who ranks the economy based on a dozen indicators each month, August was the lowest performing month since January 2010.
Trillo said the stalling economy is one of the reasons the President is pushing for the American Jobs Act, which he believes will simply repeat the 2009 plan. Trillo said the state and the country cannot afford to kick the can down the road with more one time fixes.
But just as he did in 2009, Senator Jack Reed has thrown his support behind the latest proposal to reinvigorate the economy. Reed said the American Jobs Act will put Rhode Islanders back to work.
“I support the American Jobs Act because it is an effort to boost the economy and put more Rhode Islanders back to work,” he said. “It is focused on proven job creating elements that will help small businesses and working families. With all the gridlock in Washington these days it is sad but not surprising that even a strong jobs bill with bipartisan ideas would get stalled. But I remain optimistic because Rhode Islanders want Congress to act on a jobs plan.”
If you valued this article, please LIKE GoLocalProv.com on Facebook by clicking HERE.
