‘Horizontal’ Stimulus Funds Draw Political Criticism

At a recent legislative breakfast state Rep. Carolyn Dykema, D-Holliston, said she’s frustrated that there has not been more stimulus money for construction of new buildings, or so-called “vertical construction” projects.

It’s been a common theme for some legislators since the $787 billion American Recovery and Reinvestment Act passed last year.

“All these horizontal projects [like roads and bridges], they don’t create the types of jobs that vertical construction would,” Dykema said at the Corridor Nine Area Chamber of Commerce event.

Long Road

Of course, those in the horizontal construction business take issue with those assumptions, including James Reger, president of P.J. Keating Co. in Lunenburg.

Reger’s paving company completed two stimulus-funded projects last year and is set to do a third this year totaling about $14 million.

Not only did the federal funds mean that Reger didn’t have to lay off 10 workers that he otherwise would have, but the subcontractors he worked with – the truck drivers, asphalt suppliers, designers, engineers and painters – all had work too because of the funding.

“The ripple effect goes a long way,” he said. “I can tell you, we’re all happy to have the business.”

According to the state’s stimulus tracking web site, through the end of 2009, Massachusetts has been awarded almost $300 million for transportation projects, of which about $200 million has been committed and about $38 million has been spent.

By comparison, about $240 million has been allocated for housing, some of which is for new construction. Of that money for housing, $180 million has been committed and $28 million of it was spent at the end of last year.

Overall, $4.3 billion has been awarded to the state.

So why hasn’t more money been allocated to “vertical” construction projects?

Jeffrey Simon has been heading the state’s office of recovery and reinvestment and said all stimulus funding has come with strings attached to it.

“That’s a question you’d have to ask Congress,” he said. Furthermore, he said some “vertical” construction projects have been funded. About $10 million was recently allocated to upgrade waste water treatment centers in Framingham and Westborough.

State Rep. James McGovern, D-Worcester, said while the federal government passed the legislation, it was up to the states to allocate the money. But, he defended the use of stimulus funds on transportation projects. Roads and bridges around the state are in poor condition and need to be replaced, he said. Plus, road and bridge projects can begin quickly after funding is identified for them.

Reger agrees. He said once funding is secured for a project his company can begin work within eight business days.

McGovern said part of the rationale behind allocating the money was to spend it quickly to stimulate economic activity. Constructing roads and bridges has done that, he said.

State Sen. Karen Spilka is on the joint committee of federal stimulus oversight. She said it’s a tough issue.

There’s a philosophical question about if the government should be paying for direct construction of buildings for use by the private sector. Traditionally, she argues, it has been government’s role to create the infrastructure necessary to allow for private investments. “There’s only a finite amount of stimulus dollars,” she said. “On one hand the argument could be made that if you build it they will come.”