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State and Federal Transportation Leaders Challenge Report on Stimulus Job Creation

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A recent Associated Press analysis of stimulus-funded road projects and their impact on unemployment concluded that stimulus funds have had little to no affect on local unemployment numbers. A recent Associated Press analysis of stimulus-funded road projects and their impact on unemployment concluded that stimulus funds have had little to no affect on local unemployment numbers.
Rep. James Oberstar, Chairman of the House Transportation and Infrastructure Committee said the AP's analysis was flawed, and "they didn't have an understanding of the nature of construction projects." Rep. James Oberstar, Chairman of the House Transportation and Infrastructure Committee said the AP's analysis was flawed, and "they didn't have an understanding of the nature of construction projects."

By Alex Cameron, Oklahoma Impact Team

TULSA, Oklahoma -- As fierce as the debate has been over the effectiveness of the $787 billion federal stimulus package as a whole, there's been little debate as to the effectiveness of spending stimulus money on transportation projects.

It's been assumed that these projects are actually creating jobs -- until now.

A recent Associated Press analysis of stimulus-funded road projects and their impact on unemployment concluded: "The strategy of pumping (stimulus) money into counties hasn't affected local unemployment rates so far."

Not surprisingly, the report is being rejected by supporters of the American Recovery and Reinvestment Act (ARRA).

"The Associated Press is dead wrong," said Rep. James Oberstar, Chairman of the House Transportation and Infrastructure Committee.

Read the full report from the Associated Press.

During a visit to Oklahoma earlier this week, in which the Minnesota Congressman toured stimulus projects in both Tulsa and Oklahoma City, Oberstar said the AP's analysis was flawed.

"They don't have an understanding of the nature of construction projects," Oberstar said. "There are nearly 9,000 such as this underway all across the country."

But the AP study doesn't suggest that ARRA funds aren't paying for thousands of road projects; it does suggest that those projects aren't doing much, if anything, to improve the employment picture.

"Even within the construction industry", the report goes on, "there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program."

Tom Daxon, the former state auditor, former state finance director and current stimulus critic, applauded the study. Daxon said he realizes Oklahoma had little choice but to accept and spend the stimulus allotment, but said government leaders should have known it would not have any significant impact on employment.

"Most people tend to say, 'Oh, we're creating jobs,' when, in fact, you look behind it at the overall job picture...[and] you've got some subtractions going on elsewhere," Daxon said.

In the past year, just under 50,000 jobs have been lost in Oklahoma, according to the Oklahoma Employment Security Commission's November employment report. The same report says 3,200 of those have been in construction.

Still, state transportation officials said, without the stimulus, it would have been worse.

"Funding made available by the Recovery Act is having a positive affect on jobs and the economy..."

Those words were part of the statement read by Oklahoma Transportation Secretary Gary Ridley last month as he testified on Capitol Hill before Oberstar's committee.

With Oberstar his guest in Oklahoma this week, Ridley expanded on that claim:

"We've had 1.3 million labor hours worked on stimulus projects since we let them this early spring. We track that on every job," Ridley said

"The tale of truth," Rep. Oberstar chimed in, "is that, of the President's 1.4 million (stimulus) jobs announced just last week, half of the jobs are derived from this program."

Oklahoma Congresswoman Mary Fallin, (R) 5th District, sits on Oberstar's committee and joined him on the highway stimulus tour. Rep. Fallin doesn't profess to know how many jobs Oklahoma's transportation projects have created but stands behind the use of stimulus money to fund transportation projects.

"Even though I didn't support the stimulus package as a whole, I did think it was good to invest in infrastructure in our states and our cities."

Fallin's comment underscores another point made by the Associated Press investigators who authored the report -- namely, that transportation spending is "politically popular...supported even by some in the GOP who have criticized other stimulus programs."

But, as many points as the projects may score politically, the report concludes that stimulus spending scores very little economically.

"To the extent that it has a positive impact, it's a drop in the bucket," Daxon said.

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