Stimulus funds jump-start construction in some areas, but long-term funding is needed for sustainable recovery.

by Therese Dunphy, Editor-in-Chief

Hungry for business, many aggregates producers are looking for opportunities created through federal highway funding, but the last six months have been a wild rollercoaster adventure, and the steepest hills may be at the end of this ride.

The American Recovery and Reinvestment Act of 2009 (ARRA) injected much-needed funds into the market, but even as it jump-started spending for many infrastructure projects, the ability of departments of transportation (DOTs) to initiate big projects may be in jeopardy. At Aggregates Manager press time, the Highway Trust Fund (HTF) is nearing a zero balance, and Congress and President Obama are clashing on the merits of immediate-versus-delayed transportation reauthorization.

A gentle hill

Passed on Feb. 17, the ARRA appropriated $64.1 billion for infrastructure investment to improve the nation’s infrastructure. Of those funds, $48.1 billion are to be administered by the Federal Highway Administration (FHWA). States eagerly lined up and all submitted their requests for funding of shovel-ready projects 10 days before the end of June when they were due.

“So far all 50 states and the territories have obligated or dedicated $16 billion dollars of their highway stimulus money to over 5,000 construction projects,” John Porcari, deputy secretary of transportation, blogged on June 26. “Of those projects, over 1,500 of them are underway — bids are being made, equipment and supplies are being purchased, contractors are hiring, and workers are working.”

Porcari wrote the post on the White House blog site in response to a June 25 USA Today article that said only a fraction of the dollars dedicated to construction spending are actually reaching the states.

Also on June 25, House Republicans serving on the Committee on Transportation and Infrastructure released a minority report detailing its views of ARRA’s impact on transportation programs during its first 120 days. The report notes that construction employment declined in most metropolitan areas from April 2008 to April 2009 and raises concerns that the Buy American language in stimulus-related regulations is driving up the cost of some construction projects while delaying others.

Even as states gobble up stimulus funds, the HTF is once-again poised to become insolvent.