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3 Design, Management, and Outcomes of the American Recovery and Reinvestment Act Transportation Grants T he experience of the transportation grants provided by the American Recovery and Reinvestment Act (ARRA) is the best available evidence on the functioning of a transportation stimulus program. This chapter describes the provisions and objectives of the grants, the challenges that federal and state government managers encountered in managing them, and ARRA’s impact on transportation spending and on construction employment. Alternative provisions for a transportation stimulus program that might increase benefits (i.e., stimulus impact and long-term transportation benefits) are described in Chapter 4. ARRA TRANSPORTATION PROVISIONS As Chapter 1 described, of the $831 billion in federal spending and tax relief provided by ARRA, $48.1 billion was for programs to be administered by the U.S. Department of Transportation (USDOT). Most of the USDOT-administered funds were to be disbursed as grants for capital expenditures for state and local governments (Figure 3-1). ARRA also provided federally subsidized credit through Build America Bonds, which state and local governments could use to finance transportation construction; appropriations for the U.S. Army Corps of Engineers civil works program for water projects, including navigation projects; and 2.3% 3.1% 0.2% 0.4% Highway grants to states & territories ($26.8 billion) Highways: federal lands, Indian reservations, other ($0.7 billion) Intercity passenger rail grants to states ($8.0 17.5% billion) Amtrak ($1.3 billion) Transit agency grants ($8.4 billion) 2.7% FAA facilities ($0.2 billion) 55.6% Airport grants ($1.1 billion) 16.6% TIGER competitive grants ($1.5 billion) Small shipyard grants ($0.1 billion) 1.6% Total $48.1 billion FIGURE 3-1 ARRA appropriations for USDOT-administered programs. (FAA = Federal Aviation Administration; TIGER = Transportation Investment Generating Economic Recovery.) (SOURCE: GAO 2011b, 4.) 43

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44 Transportation Investments in Response to Economic Downturns appropriations for nontransportation infrastructure. The committee’s examination was limited to the USDOT-administered programs. Administrative provisions of the transportation funds provided in ARRA are summarized below (GAO 2011b, 4–6; see also ARRA, Public Law 111- 5, February 17, 2009, Title XII). Apportionment of Funds Most ARRA transportation funds were distributed to state and local government agencies according to procedures of established federal highway, transit, and airport grant programs. All highway funds [other than highway grants in the Transportation Investment Generating Economic Recovery (TIGER) program described below] were distributed among the states according to formulas already in use in the regular federal-aid highway program that depend on highway lane miles, vehicle miles, population, and tax payments to the federal Highway Trust Fund attributable to highway users in the state. Of the $8.4 billion of transit funds, $7.65 billion was apportioned among the 152 largest urbanized areas, or among the states for use of small urbanized areas, according to formulas in the existing federal transit program that depend mainly on population; population density; and transit vehicle miles, passenger miles, and route miles. The Federal Transit Administration (FTA) awarded the remaining transit aid, $750 million designated in ARRA for the existing discretionary transit capital grant program, to projects under way that had already received grants and that FTA judged were capable of spending additional funds quickly (74 FR 89, 21843, May 11, 2009). As a corollary of following the rules of the existing federal-aid programs, ARRA grants could be used only for capital expenditures [with the exception that recipients of certain transit grants were allowed to apply up to 10 percent of the funds to operations (FTA n.d. a)]. Thirty percent of ARRA surface transportation funds apportioned to each state were to be suballocated to local governments for use on projects of the local governments’ choosing. This was larger than the share of funds in the regular federal surface transportation aid program subject to a similar substate allocation requirement [about 9 percent of authorizations in the 2005–2009 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)].1 Two newly created discretionary grant programs, high-speed rail grants and TIGER grants (called Supplemental Discretionary Grants for a National Surface Transportation System in Title XII of ARRA), were to distribute $8.0 billion and $1.5 billion, respectively (20 percent of USDOT-administered ARRA funds in total), on the basis of USDOT evaluation of applicants’ proposals. USDOT defined the criteria for judging TIGER and high-speed rail project proposals to include both long-term outcome (i.e., the transportation-related benefits of the facilities constructed) and immediate economic stimulus (74 FR 115, 28758, June 17, 2009; 74 FR 119, 29902, June 23, 2009). Because these two programs were new (the passenger rail grant administrative framework had been established in the Passenger Rail Investment and Improvement Act of 2008, enacted 4 months before ARRA), USDOT was obliged to establish procedures for awarding and overseeing grants quickly, and eligible recipients lacked experience in applying for and using them. 1 In the regular federal-aid program, the states were required to suballocate about 56 percent of surface transportation program funds, which in turn were 16 percent of all SAFETEA-LU authorizations (FHWA 2007).

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Design, Management, and Outcomes of the ARRA Transportation Grants 45 Distressed Areas Priority States were required to give priority to highway projects located in economically distressed areas, defined as areas with low per capita income or high unemployment relative to national averages or that had experienced recent major job loss from events such as a business closure or disaster. To enforce this provision, the Federal Highway Administration (FHWA) required the states to document how they had searched for distressed area projects and to report which projects were located in distressed areas (FHWA 2009a). Matching Funds Waiver No matching contribution to projects was required from recipients of most ARRA transportation grants; that is, projects could be 100 percent federally funded. This provision was the major exception to procedures of the established grant programs. For example, normally, the federal government reimburses the states for 90 percent of the cost of federal-aid projects on Interstate highways and for 80 percent of the cost of projects on other highways. Obligation and Spending Deadlines ARRA imposed deadlines on obligation of funds by transportation aid recipients. [Obligation occurs when the recipient notifies USDOT of a specific project to be funded with the federal aid and USDOT approves the project (GAO 2011b, 7).] Highway funds apportioned to states and transit funds apportioned to states or metropolitan areas that the recipients had not obligated within 1 year were to be withdrawn and redistributed by USDOT among recipients that had met the deadline. Half of funds apportioned were required to be obligated within 120 days for highways and 180 days for transit projects. Priority was to be given to highway projects that could be completed within 3 years. These short deadlines were a departure from normal practice; in the federal-aid highway program, funds apportioned to a state normally are available for use by the state for 3 to 4 years. The deadlines for the new competitive grant programs were less rigorous, presumably because these programs were seen as serving the reinvestment objective of ARRA as much as the recovery objective. Passenger rail grants were to be obligated by September 30, 2012. The ARRA appropriation for TIGER grants expired September 30, 2011 (although a new round of TIGER grants was authorized in November 2011). Maintenance of Effort The governor of a state receiving transportation grants was required to certify that the state was maintaining its expenditure of state funds at previously intended levels for the types of projects funded by the state’s ARRA grants. The intent was to ensure that ARRA increased transportation spending rather than replacing state funding (USDOT 2011, 1). States were required to report in March 2009 their planned expenditures of state funds in each of the nine programs in which ARRA appropriated funds (see Table 3-1) according to plans in effect on February 17, 2009, for the period February 17, 2009, to September 30, 2010, and then to report actual expenditures at the end of this period. The penalty for states that failed to maintain planned spending was

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46 Transportation Investments in Response to Economic Downturns exclusion from the 2011 regular annual redistribution of unused obligation authority in the federal-aid highway program. Data Collection and Reporting Grant recipients were required to collect data and submit periodic reports on “the number of direct, on-project jobs created or sustained by the Federal funds provided . . . and, to the extent possible, the estimated indirect jobs created or sustained in the associated supplying industries” [ARRA Section 1201(c)]. Jobs were reported quarterly and measured in full-time equivalents, that is, hours worked divided by a standard number of quarterly hours in a full-time job. Recipients also were required to report on funds obligated and expended and numbers of projects begun and completed. ADMINISTRATION OF ARRA TRANSPORTATION GRANTS The following were the apparent purposes of the special rules for transportation grants that ARRA imposed: • To ensure timely distribution and expenditure of the federal funds; • To ensure that the benefit of the federal funds was not offset by reductions in recipients’ spending of their own funds, through the maintenance-of-effort requirement; • To target spending to geographic areas experiencing the greatest economic hardship, through the priority assigned to projects in distressed areas; and • To provide transparency through public reporting requirements. These are essential design objectives for a federal stimulus spending program. Timeliness is necessary for effective stimulus. Maintenance of effort is necessary to ensure that the federal grants actually lead to an increase in government purchases (also necessary to achieve the stimulus) of the kinds that Congress has determined would be most beneficial. Similarly, geographic targeting of funds may in some circumstances increase the stimulus impact [although experience with ARRA described below and with earlier public works spending programs (Vernez and Vaughan 1978, x) indicates that many of the direct hires on a construction project will not be resident in the locale of the project]. Transparency is necessary to motivate federal and state managers to use the funds consistently with Congress’s intent and to allow the ARRA programs to be evaluated so that future stimulus programs can be better designed. As noted in Chapter 1, the spending deadlines and requirements for reporting of spending and employment were recommendations of the 1986 report of the General Accounting Office (renamed the Government Accountability Office) (GAO) that identified failings in earlier federal public works stimulus spending programs (GAO 1986, 62). GAO (1986, 26) and the Economic Development Administration evaluation of public works stimulus programs (Vernez and Vaughan 1978, viii) had cautioned that the employment impact of the earlier stimulus programs would have been offset by state and local government substitution of federal funds for their own. Federal imposition of these requirements was seen as appropriate in ARRA because Congress was seeking to attain national welfare objectives, which were not necessarily consistent with the objectives of the individual jurisdictions receiving the transportation grants. The

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Design, Management, and Outcomes of the ARRA Transportation Grants 47 stimulus benefits of transportation construction tend to leak out of the state in which the stimulus occurs. For example, materials may be imported from out of state, and out-of-state contractors may be hired. If state governments received unrestricted federal grants in place of the transportation grants, their incentives would be to use them in ways that retained the benefits for state residents, perhaps for tax relief or for government purchases with greater local impact but less national stimulus impact than transportation infrastructure. Of course, arguments for the federal requirements are valid only if Congress was correct in its assessment that purchases of transportation infrastructure and equipment were the most effective use of a portion of ARRA funds, with respect to the act’s objectives. The first subsection below describes difficulties that transportation grant recipients reported in attempting to comply with ARRA’s administrative provisions. The second subsection considers how state and local government grant recipients’ responses to the program may have obscured its actual impact on transportation spending, total government spending, project selection, and spending rate. The final subsection presents summary observations on the responses of state and local governments to the transportation grants and the impact of the grants on spending and transportation construction employment. ARRA Administrative Challenges The experiences of the state and local government recipients in complying with the ARRA transportation grant rules and of USDOT in administering the rules have been described in reports by GAO (GAO 2011b), USDOT (USDOT 2011), and the USDOT Inspector General (Scovel 2011) and in the paper on implementation of ARRA commissioned by the committee (Meyer 2012), which was based on interviews with officials in 11 states. All described administrative burdens created by certain of the rules, difficulties that some states experienced in complying with the rules, concerns about the consistency of their application, and concerns about unintended consequences. The remainder of this subsection lists reported difficulties associated with each category of ARRA transportation grant administrative provision and finally gives state officials’ suggestions for alleviating the difficulties. Apportionment of Funds Most state officials interviewed for the committee affirmed that distributing ARRA funds according to procedures of established federal transportation grant programs facilitated distribution of the funds and allowed projects to be initiated quickly (Meyer 2012, 10). In distributing funds in this way, the federal government may have forgone opportunities to target funds more directly to geographical areas in which the stimulus impact would be greatest. However, the uncertain results of the ARRA distressed areas priority requirement (described below) suggest that the practical potential for geographic area targeting is limited. Some state officials argued that spending could have been faster if greater effort had been made to facilitate or relax temporarily planning and environmental review steps required under the federal-aid program (Meyer 2012, 13). State officials reported that the lapse in the regular federal highway and transit aid program in 2009 affected their ability to maintain spending during the recession (Meyer 2012, 8). In that year, the multiyear federal-aid program authorized in 2005 expired, and spending was continued through a series of temporary extensions until Congress enacted a new program in

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48 Transportation Investments in Response to Economic Downturns 2012. The funding uncertainty slowed project design because states cannot afford to develop projects with a low probability of construction. Consequently, the lapse in the federal-aid program probably reduced opportunities to spend ARRA funds on ready-to-construct, high-value projects. Funding uncertainty also complicated compliance with the ARRA maintenance-of-effort requirement. For the period for which each state was required to report its planned expenditures of its own funds (February 2009 to September 2010), the states’ overall capital programs were uncertain because they had not known how much (pre-ARRA) federal aid they could expect to receive. Some states reported that the required 30 percent suballocation of state grants to local governments slowed spending because local governments were less prepared to respond and that it made compliance with ARRA reporting and other requirements more difficult (Meyer 2012, 11). GAO’s analysis of spending data (see above) confirmed that the suballocated funds were spent more slowly. State officials reported confusion over award requirements for the passenger rail grant program administered by the Federal Railroad Administration (FRA) (Meyer 2012, 11). However, states appreciated the flexibility afforded through the TIGER grant program for seeking aid for a broad variety of types of transportation projects. Distressed Areas Priority GAO found “substantial variation” in how states identified distressed areas in their reporting of ARRA projects to USDOT and how states gave priority to projects in distressed areas. State officials explained to GAO that they had not received guidance on the objective of the distressed areas requirement, that is, whether the intent was to provide immediate jobs in these areas or to provide infrastructure for long-term development (GAO 2011b, 26–27). In the interviews conducted for the committee, officials in one state reported that changing federal guidance on the definition of distressed areas complicated compliance and that the requirement tended to favor projects in low-population-density areas of the state, reducing the stimulus effect of spending (Meyer 2012, 9). State officials reported to the committee that if immediate employment is the objective, conducting highway construction in distressed areas has little effect, because contractors operate statewide and their workers travel to job locations. The evaluation of the Economic Development Administration public works stimulus program of the 1970s found similarly that “the ability of a public works program to serve local cyclical needs is limited. No more than three out of ten jobs created by a public works project—including direct, indirect, and induced jobs—may be created in the labor market area in which the project is implemented” (Vernez and Vaughan 1978, x). USDOT reported that in 2009 and the first quarter of 2010, more than 60 percent of all ARRA highway projects were located wholly or partially in distressed areas (USDOT 2010a, 59). Distressed areas were identified according to state reports or according to a list of distressed counties published in 2009 by the Bureau of Labor Statistics. Because the share of population or road miles in the distressed areas is not reported, it is not possible to ascertain from the USDOT report the degree to which project selection favored these areas. GAO reported in 2010 that USDOT was overstating the fraction of spending that was in distressed areas because some states were not following the FHWA guideline for defining a distressed area (GAO 2010b, 76).

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Design, Management, and Outcomes of the ARRA Transportation Grants 49 Matching Funds Waiver Presumably, the intent of the ARRA waiver of the normal requirement that grant recipients contribute a share of the funding of each project receiving federal transportation aid was to ensure that no state or local government would be obliged to refuse the offer of extra federal aid for lack of matching funds. Neither the 2011 GAO report nor the interviews conducted by the committee examined whether the waiver was needed to ensure acceptance of federal aid or had other consequences. One rationale for the matching requirements that are a common feature of grant programs is that they are a means to add leverage to the grant, that is, to increase funding for the targeted purpose by more than the amount of the grant, or at least to discourage recipients from substituting the grant funds for their own funds. To the extent that the normal federal-aid matching requirements are effective for this purpose, the match waiver may have conflicted with the intent that ARRA funding not substitute for state and local transportation funding. Matching requirements also provide evidence that the grant recipient is committed to a project and has resources available to support it, increasing the likelihood that the project will be carried out successfully. In the highway program, where federal aid amounts to a minority of state spending, the commitment and capabilities of the states may be evident. However, state passenger rail programs generally are less well developed, and therefore the absence of a state match requirement in the ARRA rail program may have increased the risk of grants going to recipients who lacked the resources to provide adequate incidental support or to cope with contingencies like cost overruns. Obligation and Spending Deadlines GAO reported that 95 percent of USDOT-administered ARRA funds had been obligated and 63 percent spent by May 31, 2011, 27 months after enactment. Obligation and spending in the new competitive grant programs, TIGER grants and high-speed rail, had been much slower than in other programs (Table 3-1), and GAO found that obligation and spending of funds that the states suballocated to local governments for locally selected and managed highway projects were slower than for state projects (GAO 2011b, 8–11). GAO also reported that, according to the federal and state officials it interviewed, the deadlines probably affected the types of projects selected for ARRA funding and that a “tension between the purposes of the Recovery Act” (creating jobs and investing in infrastructure for long-term economic benefits) existed; that is, in some instances, projects that could meet the deadlines were selected instead of alternatives that would yield greater long-term benefits but would require more time to initiate (GAO 2011b, 28). The state interviews commissioned by the committee reinforce the GAO observations. State transportation officials reported that the deadlines were a primary factor in selecting projects for ARRA funding and that the types of projects chosen would have been different if the time constraints had been relaxed (Meyer 2012, 7–8). State officials repeatedly expressed a preference for at least partial relaxation of the stringent obligation deadlines in ARRA while acknowledging the importance of immediate job creation as one of the goals of the act (Meyer 2012, 9–12). Apparently, these state transportation officials believed that ARRA did not strike the correct balance between the two goals of immediate stimulus and long-term economic benefit from transportation improvements. This perspective would be consistent with the responsibility

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50 Transportation Investments in Response to Economic Downturns of these officials, which is to develop and maintain the transportation network rather than to manage macroeconomic cycles. Maintenance of Effort GAO (2011b, 24–26), USDOT (2010b; 2011) and Meyer (2012, 9–10) documented the difficulties that USDOT and the states experienced in interpreting, administering, and complying with ARRA’s maintenance-of-effort requirement. Terms in the act such as “state funding” and “types of projects that are funded by the [ARRA] appropriation” required definition. The states and the federal government ordinarily plan and track obligations of funds for transportation rather than expenditures, which were the measure of the ARRA maintenance-of-effort requirement. During 2009 and 2010, USDOT repeatedly revised its guidance on maintenance of effort concerning the definitions of planned and actual expenditures (GAO 2011b, 25). Some states objected that the requirement was not consistently applied across states and that USDOT interpretations sometimes were unnecessarily rigid. States that failed to comply sometimes objected that they were penalized for factors beyond their control, in particular, declines in dedicated transportation revenue during the recession (Meyer 2012, 9–10). The funding uncertainty caused by the 2009 lapse in the regular federal-aid program further complicated compliance with the ARRA maintenance-of-effort requirement. For the time period for which each state was required to report its planned expenditures of its own funds (February 2009 to September 2010), the states’ overall capital programs were uncertain because they had not known how much (pre-ARRA) federal aid they could expect to receive. In a 2010 report to Congress on ARRA, USDOT summarized its experience with defining and enforcing the maintenance-of-effort requirement and obstacles that hindered states’ good-faith effort to comply. USDOT concluded that “it is difficult to craft and apply a quantitative measure that works well across multiple transportation programs involving a large number of grantees with differing organizational, financial, and legal structures. . . . [A] pass-fail [maintenance-of-effort] standard like that found in §1201 [of ARRA] may not be well suited to USDOT modal programs, because of the myriad factors that affect whether and when State funds are expended on a transportation project” (USDOT 2010b, 4). This conclusion appears to be based primarily on concern for fairness to the states (i.e., that a state not be penalized for factors beyond its control) rather than on an assessment of the requirement’s effectiveness in ensuring that federal grants translated into increased total spending. In a 2011 report, USDOT concluded that requirements in any future stimulus legislation should be modified to simplify defining and tracking maintenance of effort (USDOT 2011, 12) but did not propose specific modifications. USDOT reported that by November 2010, 29 states and the District of Columbia had demonstrated that their spending had complied with the maintenance-of-effort requirement and that spending by 21 states had fallen short (USDOT 2011, 2–3). Buy America Requirement Section 1605 of ARRA provided that “none of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.” The requirement was to be applied “in a manner consistent with United States obligations under international agreements,” and the act

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Design, Management, and Outcomes of the ARRA Transportation Grants 51 allowed federal department heads to waive the requirement if no U.S. source existed or if it would increase projects costs by more than 25 percent. States were already required to use U.S.- produced iron and steel in federal-aid highway projects, but the ARRA requirement applied more broadly. GAO identified the requirement as a potential source of delay in the ARRA high-speed rail program (GAO 2010a, 20). Data Collection and Reporting GAO initially observed numerous difficulties of grant recipients in complying with ARRA jobs reporting requirements and of federal agencies in providing guidance and concluded that the reports were of unknown validity (GAO 2009, 40). However, by 2011, GAO found that reporting had improved and concluded that it was “generally satisfied with the stability of the data quality” (GAO 2011b, 21). Beyond these administrative difficulties, GAO emphasized that the jobs reports do not indicate the overall employment impact of ARRA. They cover only a minority of ARRA spending, do not include reporting or estimates of employment by suppliers of the projects or programs receiving the grants or of employment resulting when the workers directly employed spend their wages in the community, and do not take into account how recipients would have behaved if they had not received the grants. Consequently, “the recipient reports are not estimates of the impact of the Recovery Act, although they do provide a real-time window on the results of Recovery Act spending” (GAO 2009, 42). The state officials interviewed for this study endorsed the principle of transparency, but some objected to the burden, which they regarded as excessive, of mandatory reporting to multiple federal agencies with differing reporting requirements (Meyer 2012, 9, 24–25). States were required to report on ARRA-funded activities to USDOT, to the Recovery Accountability and Transparency Board (created by ARRA to monitor funds), and to the House Transportation and Infrastructure Committee. Also related to transparency and accountability is the GAO finding that the potential long-term transportation benefits of ARRA-funded projects are unknown because the states lack data and methods for making such assessments. GAO recommended that USDOT determine the data and measures that would be needed to assess the long-term benefits (GAO 2011b, 15–16). Obviously, such an improvement in evaluation capabilities would be of value not only in administration of special programs like ARRA but also in all federal, state, and local transportation activities. State Views on Improving Administration Frequently mentioned preferences of state transportation officials interviewed for the committee concerning the administration of a transportation stimulus spending program included the following (Meyer 2012, 12–13): 1. Select projects on the basis of greatest economic impact; do not artificially constrain the selection with requirements for economically depressed designation and geographic balance. 2. Eliminate unnecessarily burdensome federal reporting requirements, especially duplicative reporting to multiple federal agencies.

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52 Transportation Investments in Response to Economic Downturns 3. Allow flexibility in reallocating federal grant funds, for example, if a project encounters an unforeseen obstacle or bids come in under the estimate. 4. Allow a longer period of time for projects that will have a strong economic impact but that cannot be implemented in a short time frame. 5. Relax the process requirements if the goal is to get projects implemented quickly. The Transportation Improvement Program–State Transportation Improvement Program planning requirements, environmental impact, and cultural resource requirements were pointed to in particular as constraints in getting the right projects implemented. 6. Make engineering design eligible for stimulus dollars, which will allow projects that might not be implemented in the short time frame to be expedited as part of the normal investment program. It is to be understood that state officials’ preferences must be weighed against the nationwide objectives that the federal program was intended to achieve. Effect of Grant Rules on ARRA Outcomes The GAO and USDOT reviews did not attempt to evaluate quantitatively the effect of the administrative rules on recipients’ behavior or on the overall outcome of the ARRA transportation program. The program’s structure and rules affected its success in achieving the two intended outcomes of immediate economic stimulus and long-term economic benefit from the transportation assets purchased. The outcomes depend on how ARRA affected governments’ total spending, total transportation spending, and transportation spending priorities. Conceivably, altering ARRA rules could have resulted in a mix of projects with greater stimulus benefits (e.g., by accelerating construction) or greater long-term transportation benefits (e.g., by allowing projects that were difficult to fund under ARRA rules), or both. Historically, states have managed their participation in federal transportation aid programs with the goal of maximizing the grant funds received and complying with the letter of the federal regulations, while at the same time minimizing the degree to which the federal rules divert them from their own transportation and spending priorities (TRB 1987, 51–54). The new transportation grants in ARRA created incentives for the states to • Reduce the amount of their own funds devoted to transportation (fiscal substitution), to free funds to satisfy higher state priorities; • Designate as ARRA-funded already programmed or anticipated projects that could be undertaken quickly, to satisfy the timeliness requirement of ARRA; and • Divert administrative, engineering, and other resources to the start-up of ARRA projects and away from projects, including normal federal-aid projects, that were subject to more lenient deadlines, also to satisfy the timeliness requirements. These likely state responses complicate the task of determining the net impact of ARRA on total transportation spending, on total government spending, on the projects selected for funding, or on the acceleration of spending. ARRA’s maintenance-of-effort requirement was intended to prevent fiscal substitution, but as described above, maintenance of effort proved difficult to define and measure. Moreover, the receipt of the ARRA transportation grants may have discouraged state actions to maintain

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Design, Management, and Outcomes of the ARRA Transportation Grants 53 transportation spending through borrowing or other new sources of funds. Therefore, the effect of the ARRA maintenance-of-effort requirement is uncertain. Diversion of a part of ARRA transportation funding to other purposes would not necessarily indicate bad faith on the part of the states, since recipients had no certain means of determining what their spending priorities would have been in the absence of the grant. It also would not necessarily diminish the stimulus impact, depending on how the freed-up funds were used. (If the ultimate effect were additional state spending for any purpose or lower taxes, there would be a stimulus impact.) There is empirical evidence that, historically, increases in federal highway aid distributed to the states have not led to equal increases in state highway spending. The structure of federal highway grants does not give the federal government strong leverage over state spending priorities. The state or local matching share is small (10 or 20 percent for most projects), and the total federal aid for which a state is eligible in a time period is capped. As long as a state plans more highway capital spending from its own funds than the minimum needed to match available federal aid, it can qualify for all federal aid for which it is eligible without greatly altering its governmentwide expenditure levels, priorities, or taxes from those that would have prevailed in the absence of the federal aid (GAO 2004; Gramlich 1990; TRB 2006, 174–175). GAO estimated in 2004 that the states had used roughly half of increases in federal highway aid since 1982 to substitute for state and local highway funding (GAO 2004, 3). Because ARRA grants required no state match, federal leverage over state transportation spending through ARRA may have been weaker than in the normal federal-aid program. The GAO estimate applies to changes in the established multiyear federal-aid programs. In the case of a short-duration grant program like ARRA, the structure of state transportation funding presents an obstacle to substitution. Most state transportation spending is funded by revenue from dedicated tax sources. Some states’ laws provide for emergency diversion of these funds, but overall, the trust fund arrangement likely hinders fiscal substitution in response to a short-term extraordinary grant program. ARRA project data show that pavement improvement was the most common ARRA project type, because such projects easily satisfy the ARRA timeliness requirements. However, state officials reported that the states identified as ARRA funded some projects that already had been programmed, or would have been programmed, within the ARRA spending deadline, freeing the federal aid and state funds that had been dedicated to those projects to be used for other purposes. Thus, even if a state reported that it spent all its ARRA funds on resurfacing, the net effect of the grants could have been to increase spending on other kinds of projects as well as on resurfacing. USDOT recognized that a state could blunt the effect of ARRA’s timeliness requirements by relabeling projects in this way. It instructed the states that it would allow them to convert already programmed, fully state-funded highway projects to ARRA projects only if the state funds freed were then used for other highway projects that met the ARRA timeliness requirements and that already-approved regular federal-aid projects (with shared federal and state funding) could not be converted to ARRA projects (with 100 percent federal funding) (FHWA 2009b). However, resurfacing is programmed on a short cycle, and rather than relabeling projects, a state could attain the same result by reducing the amount of state-funded resurfacing programmed in the period after receipt of ARRA funds. GAO found in 2010 that obligations and reimbursements in the regular federal-aid highway program had slowed since enactment of ARRA. At the end of the third quarter of fiscal 2010 (June 30), $19.7 billion of regular federal-aid highway funds available to the states

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66 Transportation Investments in Response to Economic Downturns 30000 25000 $ millions 20000 15000 10000 5000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 State taxes and fees devoted to highways, other than user revenue State bond proceeds devoted to highways FIGURE 3-10 State taxes and fees devoted to highways, other than user revenues; and state bond proceeds devoted to highways, 2002–2010. NOTE: State taxes and fees devoted to highways other than user revenue include (a) general fund appropriations for highways and (b) revenue dedicated by law to highways from taxes other than highway user taxes. (SOURCE: FHWA various years, Table HF-10.) Transit Spending Transit capital expenditures, in current dollars, grew strongly in the period 2005–2008, but the trend flattened in 2008–2010, according to transit agency financial data reported by the American Public Transportation Association (APTA) (Figure 3-11). ARRA provided $8.4 billion for transit (see Figure 3-1), all but minor amounts of which was to support capital expenditures. Apparently most of these funds are not yet reflected in the APTA 2009 and 2010 capital funding data. The 2-year total of federal funding for transit capital spending in 2009–2010 was $3.3 billion greater than it would have been if the 2006–2007 level had prevailed, and federal capital assistance had been on an increasing trend before enactment of ARRA. Funding for transit operation in current dollars also grew during 2008–2010, but more slowly than earlier in the decade. Increases in funding from fare collections and from federal assistance offset a small decline in state and local government operating assistance (Figure 3-12).

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Design, Management, and Outcomes of the ARRA Transportation Grants 67 20,000 18,000 16,000 14,000 12,000 $ millions 10,000 8,000 6,000 4,000 2,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 transit agency generated local and state assistance federal assistance total FIGURE 3-11 Public transit capital funding sources, 2002–2010. NOTE: Transit agency– generated capital funding includes funds from fares and other agency earnings, proceeds of bonds issued by the agency, and revenue from taxes imposed by the transit agency. (SOURCE: APTA 2012, Table 58.) Cyclical Behavior of State and Local Government Transportation Spending The data presented above are insufficient to reveal any cyclical pattern in transportation spending. Analyses of the correlation of government spending with the business cycle over longer time periods have found that state and local government spending, excluding public assistance programs that are designed to increase spending during recessions, is procyclical; that is, spending tends to accelerate in response to expansion of the general economy and to decelerate in response to recessions. State government expenditures during 1960–2006 other than safety-net programs (e.g., Medicaid and public assistance) tracked the business cycle with about a 1-year lag, with deviations in state spending from the long-term trend nearly proportional to deviations in personal income (Clemens and Miran 2012, 48–49). Total state and local government capital spending in 1977–2008 was procyclical but lagged the business cycle by 1 to 2 years (GAO 2011c, 16). Noncapital highway spending by state and local governments also was procyclical in 1977–2008, with a more immediate response to the business cycle (GAO 2011c, 19, 47). GAO 2011c did not examine highway capital spending or transit spending as separate categories. The long-term trend in these periods was growth in transportation spending and in total state and local government capital spending; the typical response to recessions was slower growth in spending rather than absolute declines.

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68 Transportation Investments in Response to Economic Downturns 45,000 40,000 35,000 30,000 $ millions 25,000 20,000 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 passenger fares & other agency earnings state & local tax revenue & bond proceeds federal funds total FIGURE 3-12 Public transit operating funding sources, 2002–2010. (SOURCE: APTA 2012, Table 63.) The procyclical pattern in state and local government spending may have several undesirable consequences. It may amplify the magnitude of business-cycle fluctuations. Funding cutbacks will delay completion and likely increase the costs of long-term capital projects in progress. As noted above, construction prices generally are higher during expansions. Unless the slowdown in spending during a recession matches a decline in use of transportation facilities, customer service will suffer. Some of the features of transportation programs may have tended to dampen business cycle fluctuations in spending in the past. The federal and state trust funds, reliance on dedicated revenues, and the multiyear predictability (until recent years) of the federal-aid program have been sources of stability. The spending data presented above suggest that, during and after the 2007–2009 recession, the federal and state actions to maintain funding may have more than offset the historical tendency for spending to slow during a recession. Employment on ARRA Projects ARRA required grant recipients to submit periodic reports to the federal government on the number of jobs directly supported by the grant funds. For construction projects, such jobs included employees of contractors and subcontractors, but not employees of suppliers to contractors. The recipient jobs reports are compiled by the Recovery Accountability and Transparency Board, a body created by ARRA. The direct jobs supported as reported by recipients of USDOT grants peaked at 67,000 full-time-equivalents in the 2010 third quarter (Figure 3-13) (i.e., 67,000 person quarters of full- time employment during the quarter). Jobs supported declined to 18,000 by the 2012 second quarter, 27 percent of the peak.

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Design, Management, and Outcomes of the ARRA Transportation Grants 69 70,000 person-quarters of employment 60,000 50,000 40,000 30,000 20,000 10,000 - FIGURE 3-13 Direct jobs supported by USDOT-administered ARRA grants, quarterly, 2009:Q4–2012:Q2. (SOURCE: Recovery Accountability and Transparency Board 2012b.) For comparison, direct jobs supported by all ARRA spending subject to the recipient jobs reporting requirement peaked at 750,000 in the 2010 second quarter and declined to 152,000 (20 percent of the peak) in the 2012 second quarter (Figure 3-14). About a fifth of the total of spending and tax reductions provided by ARRA was subject to the reporting requirement (CBO 2012, 4). As Chapter 1 explained, the grant recipient jobs reports are not a good indicator of the overall employment impact of ARRA because they cover only a minority of ARRA spending and do not reflect secondary effects of the spending. The jobs reports are useful as an indication of the timeliness of spending in the various grant programs funded by ARRA. 800,000 person- quarters of employment 700,000 600,000 500,000 400,000 300,000 200,000 100,000 - All reported DOT FIGURE 3-14 Direct jobs supported by all ARRA spending subject to the recipient jobs reporting requirement and by USDOT-administered ARRA grants, quarterly, 2009:Q4–2012:Q2. (SOURCE: Recovery Accountability and Transparency Board 2012c, 2012b.)

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70 Transportation Investments in Response to Economic Downturns The federal budget cost per direct job supported was $318,000 per person year of employment (for the 2009 fourth quarter through the 2012 first quarter) in USDOT-administered ARRA programs. In all ARRA programs for which recipient reporting of employment is required, the cost was $162,000 (for the 2009 fourth quarter through the 2012 second quarter) (Recovery Accountability and Transparency Board 2012a, 2012b, 2012c; CEA 2011). The relatively high cost per job reported for the ARRA transportation programs does not show that these programs were less cost-effective than the others; employment by suppliers to the projects is not known, and public benefits of the facilities constructed offset the cost to the government. Supplier employment may be substantial for highway construction projects that require large quantities of materials. Total Highway Construction and Maintenance Employment In Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES) survey data, employment in the month of May in the highway, street, and bridge construction industry peaked in 2006 at 361,000 and fell to to 297,000 in 2010, a decline of 18 percent. For comparison, BLS-reported employment in the entire construction industry declined 26 percent in the period. Highway maintenance employment (nearly all government employees) rose 4 percent in the same period, from 139,000 to 144,000. Employment in transportation construction other than highway construction is not identifiable in the published BLS industry employment statistics. (It would be included within the “other heavy and civil engineering construction” industry.) BLS explains that “the OES methodology . . . makes it difficult to use OES data for comparisons across short time periods” and that it “does not encourage the use of OES data for time-series analysis” because the share of total employment reported for an industry or occupation is estimated as a moving average of results of surveys of six semiannual panels of establishments collected over 3 years. Therefore, for example, a sudden and permanent step increase in an industry’s share of total employment would appear in the reported employment estimates as a gradual change over 3 years. In the BLS estimates, employment in the highway, street, and bridge construction industry declined monotonically for 5 years (from May 2006 through May 2011); therefore, the estimates are evidence of an actual decline. It is not evident how the declining trend in the BLS highway construction employment data are to be reconciled with the USDOT data on highway spending, which show current dollar highway spending growing through 2010 (while the FHWA highway construction cost index was falling). One possible source of the difference may be declining employment in privately funded road construction connected with housing construction (which would be reflected in the Census data but not in the USDOT data). Summary Observations The stimulus impact of the ARRA transportation programs depends first of all on how the ARRA funds affected total spending and employment in public transportation construction and operation. The change in total spending was not necessarily equal to the ARRA funds spent. Recipients may have substituted ARRA funds for funds from other sources, and the effort of qualifying for and spending the ARRA funds diverted personnel or other agency resources away from other projects (or, conceivably, the new federal funds may have attracted additional state and local government resources to transportation and away from other uses). Moreover, the long-

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Design, Management, and Outcomes of the ARRA Transportation Grants 71 term transportation benefit of the ARRA transportation spending does not necessarily depend solely on the benefits of the projects that were designated as ARRA funded, because grant recipients may have designated some already planned projects to receive ARRA funds, freeing funds previously designated for those projects for other uses. These uncertainties with regard to the ultimate effects of the ARRA transportation grants on state and local government spending are not indications that the grants were ineffective, either as stimulus or in their contribution to transportation infrastructure. To the extent that any diverted grants supported other spending or prevented tax increases by financially strapped states and localities, the funds would still have a stimulative effect. Funds retained in transportation programs contributed to infrastructure development, even if the projects ultimately gaining funding did not meet all ARRA special requirements. However, to assess the ultimate impact of the ARRA grants, modeling would be required to isolate the effects of the grants on transportation spending and on total state and local government spending. The trends presented above nonetheless suggest some limited conclusions about the functioning and impact of the ARRA transportation programs. Obligations and Expenditures of ARRA Funds • Essentially all state and local government grant recipients met the statutory deadlines for obligation of ARRA transportation funds apportioned to them. • The rate of expenditure of ARRA transportation funds was somewhat slower than the average rate for all ARRA funds. Part of the difference is attributable to slow spending in the two new transportation competitive grant programs, the TIGER grants and intercity passenger rail. The competitive grant programs may be regarded as the component of the ARRA transportation programs that was aimed at reinvestment rather than primarily at stimulus. However, the competitive grant programs were subject to short deadlines, implying a stimulus objective. The state interviews conducted for the committee (Meyer 2012) suggest that state officials’ preferred means of balancing short-term stimulus and long-term transportation benefits would have been to allow grant recipients greater flexibility with respect to deadlines in all the ARRA transportation programs. • The ARRA deadlines apparently affected the types of capital expenditures selected to receive ARRA funds. The share of ARRA highway funds applied to pavement improvement projects was greater than the share of such projects in the normal federal-aid program. Similarly, the share of ARRA transit funds devoted to bus capital expenditures was greater than such expenditures’ average share of all transit capital spending in recent years. However, the data presented above do not clearly show whether total transportation agency expenditures on these categories (pavement and buses) increased by as much as the ARRA funds applied to them, compared with the expenditures that would have occurred in the absence of ARRA. • Requirements for recipients to comply with new administrative rules to obtain stimulus funds were not conducive to timely spending. New rules were applied not only in the new discretionary grant programs but also with regard to record keeping, maintenance of effort, the buy-American requirement, and other ARRA provisions. The need for federal agencies to promulgate new rules and for recipients to comply probably retarded the start of some ARRA- funded projects and may have contributed to the slowdown in spending of regular federal transportation aid funds during the ARRA program. The administrative requirements were intended to serve legitimate needs for federal oversight and public accountability. However, the

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72 Transportation Investments in Response to Economic Downturns ARRA experience suggests ways the requirements could be streamlined in any future stimulus program, as Chapter 4 will propose. Most important, if rules were in place in advance of enactment of a stimulus spending program, administrative delay and uncertainty could be reduced. Total Transportation Spending • State and local governments were able to maintain growth in highway spending throughout the recession despite flat or declining user tax revenue by means of three sources of funds: increases in state and local government bond issues, ARRA highway funds, and the extraordinary transfers from the federal general fund to the Highway Trust fund in 2008, 2009, and 2010 that allowed the regular federal-aid program to continue normal operation. These trend data alone do not indicate the amount by which highway spending was greater in the period compared with the spending that would have occurred in the absence of ARRA. • According to GAO, obligations and reimbursements in the regular federal-aid highway program slowed in the period in which state and local governments were occupied in obligating their ARRA highway funds. This capacity constraint on state and local governments’ ability to process federal aid muted the stimulus effect of ARRA. • The trends for transit construction and operations spending are similar to those for highways: spending growth (in current dollars) was sustained during the recession not only by ARRA funds but also by increased state and local government support and increased funding through the regular federal-aid program. Spending growth slowed in 2010, but capital spending remained at an elevated level compared with earlier in the decade. • Historically, state and local governments’ total capital spending and noncapital highway spending have been procyclical, tending to accelerate when the economy is expanding and decelerate in response to recessions. The extraordinary transportation funding provided by the federal and state governments in 2008–2010 appears to have offset the spending slowdown that would have been expected on the basis of the historical pattern. ARRA-Supported and Total Highway Construction Employment • The grant recipient–reported jobs supported by ARRA projects indicate the timing of spending, but the relationship of these data to the actual direct employment impact of ARRA transportation spending is unclear. To the extent that any of the jobs supported were in regions or in occupations with relatively low unemployment, the recipient-reported jobs data will tend to overstate the direct actual employment impact. However, such figures show only direct jobs, not the jobs at suppliers or in the broader economy that the spending may support. • The federal expenditure per person year of work directly supported by ARRA spending was higher for projects in USDOT-administered programs ($318,000 per person year) than the average in all ARRA programs for which grant recipient jobs reporting was required ($162,000 per person year). This difference does not indicate that public benefits necessarily would have been increased by shifting ARRA funds from transportation to other programs, because the jobs reports do not include employment by suppliers to the ARRA-supported projects and because the expenditure per job measure does not take into account the long-term benefits of the supported projects.

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Design, Management, and Outcomes of the ARRA Transportation Grants 73 • BLS highway construction and maintenance employment during the 2007–2009 recession appears to be inconsistent with the trend in highway spending in the period reported by USDOT. The committee did not determine the origin of the discrepancy. Many ARRA transportation construction projects would have been carried out at a later date if the ARRA funding had not been received. In some circumstances, this would be a favorable feature of the use of transportation aid as stimulus—the net budget cost of the stimulus is less than if stimulus spending is for purchases that would never occur in normal times, and spending during the recession gives government the advantage of lower prices. If the accelerated projects would have been carried out during a future period of full employment, there is no loss of stimulus impact. However, if projects are brought forward from a later time in which high unemployment will still prevail, the net stimulus effect is diminished. Transportation spending may have been reduced in 2011 and 2012, when unemployment was still high, because ARRA funding had accelerated projects that would have been completed in those years. REFERENCES Abbreviations APTA American Public Transportation Association CBO Congressional Budget Office CEA Council of Economic Advisers FHWA Federal Highway Administration FRA Federal Railroad Administration FRB Federal Reserve Bank FTA Federal Transit Administration GAO General Accounting Office or Government Accountability Office TRB Transportation Research Board USDOT U.S. Department of Transportation APTA. 2012. Public Transportation Fact Book 2010: Appendix A: Historical Tables. APTA. Various years. Public Transportation Fact Book. (Annual.) CBO. 2011. Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from April 2011 Through June 2011. Aug. CBO. 2012. Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2011 Through December 2011. Feb. CEA. 2011. The Economic Impact of the American Recovery and Reinvestment Act of 2009: Eighth Quarterly Report. Dec. 9. CEA. 2013. The Economic Impact of the American Recovery and Reinvestment Act of 2009: Ninth Quarterly Report. Feb. 1. Clemens, J., and S. Miran. 2012. Fiscal Policy Multipliers on Subnational Government Spending. American Economic Journal: Economic Policy, Vol. 4, No. 2, May, pp. 46–68. Coibion, O., Y. Gorodnichenko, and D. Koustas. 2013. Amerisclerosis? The Puzzle of Rising U.S. Unemployment Persistence. Final conference draft to be presented at the fall 2013 Brookings Panel on Economic Activity. Sept. 9. Committee on Transportation and Infrastructure. 2011. The American Recovery and Reinvestment Act of 2009 Transportation and Infrastructure Provisions Implementation Status as of June 30, 2011. U.S. House of Representatives, Aug. 9.

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74 Transportation Investments in Response to Economic Downturns Dodaro, G. 2011. Meeting the Fiscal and Performance Challenges Facing Government. Government Accountability Office, June 15. FHWA. 1997. Highway Statistics Summary to 1995. FHWA. 2007. Fact Sheets for Highway Provisions in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Oct. 25. FHWA. 2009a. FHWA Supplemental Guidance on the Determination of Economically Distressed Areas Under the Recovery Act. Aug. 24. http://www.fhwa.dot.gov/economicrecovery/guidancedistressed.htm. FHWA. 2009b. Questions and Answers on American Recovery and Reinvestment Act of 2009 (ARRA) Issues Raised by State DOTs. Revised Nov. 11. http://www.fhwa.dot.gov/economicrecovery/qandas.htm#a2). FHWA. 2012. Highway Statistics 2010. FHWA. 2013a. Construction Cost Trends for Highways. Jan. http://www.fhwa.dot.gov/policyinformation/nhcci.cfm. FHWA. 2013b. Highway Statistics 2011. Jan. FHWA. Various years. Highway Statistics. (Annual.) FRA. n.d. HSIPR Project Funding. Accessed Sept. 10, 2012. http://www.fra.dot.gov/rpd/HSIPR/ProjectFunding.aspx. FRB Minneapolis. 2013. The Recession and Recovery in Perspective. Updated Aug. 2. http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/. FTA. n.d. a. ARRA Operating Assistance. Accessed Sept. 28, 2012. http://www.fta.dot.gov/about/12350_10399.html. FTA. n.d. b. ARRA Statistical Summary. Accessed Sept. 13, 2012. http://www.fta.dot.gov/about/12350_14246.html. GAO. 1986. Emergency Jobs Act of 1983: Funds Spent Slowly, Few Jobs Created. Dec. GAO. 2004. Federal-Aid Highways: Trends, Effect on State Spending, and Options for Future Program Design. Aug. GAO. 2009. Recovery Act: Recipient Reported Jobs Data Provide Some Insight into Use of Recovery Act Funding, but Data Quality and Reporting Issues Need Attention. Nov. GAO. 2010a. High Speed Rail: Learning from Service Start-Ups, Prospects for Increased Industry Investment, and Federal Oversight Plans. June. GAO. 2010b. Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States’ and Localities’ Uses of Funds. Sept. GAO. 2011a. GAO Releases Most Recent Report on the Recovery Act. http://www.gao.gov/recovery/. Accessed Sept. 16, 2011. GAO. 2011b. Recovery Act: Funding Used for Transportation Infrastructure Projects, but Some Requirements Proved Challenging. June. GAO. 2011c. State and Local Governments: Knowledge of Past Recessions Can Inform Future Federal Fiscal Assistance. March. Gramlich, E. 1990. How Should Public Infrastructure Be Financed? In Is There a Shortfall in Public Capital Investment? (A. Munnell, ed.), Federal Reserve Bank of Boston, Boston, Mass. Mendez, V. 2010. Notice: Subject: Implementation of the 1-Year Redistribution of Highway Infrastructure Investment Funds Pursuant to the American Recovery and Reinvestment Act of 2009. March 17. http://www.fhwa.dot.gov/legsregs/directives/notices/n4510721.htm. Meyer, M. 2012. Impact of Program Implementation on the Effectiveness of the American Recovery and Reinvestment Act: The Case of Transportation. Paper commissioned by the committee, May 24. Recovery Accountability and Transparency Board. 2012a. Contract, Grant and Loan Programs. Accessed May 29. http://www.recovery.gov/Transparency/fundingoverview/Pages/contractsgrantsloans- details.aspx.

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Design, Management, and Outcomes of the ARRA Transportation Grants 75 Recovery Accountability and Transparency Board. 2012b. Department of Transportation Estimated Jobs by Quarter. Updated Sept. 19. http://www.recovery.gov/Pages/textview.aspx?data=AgencyInfoFundedJobs&AGENCY_CODE=69. Recovery Accountability and Transparency Board. 2012c. Jobs Summary—National. Updated Sept. 19. http://www.recovery.gov/Transparency/RecipientReportedData/Pages/JobSummary.aspx. Scovel, C. L., III. 2011. Statement of the Honorable Calvin L. Scovel III, Inspector General, U.S. Department of Transportation, Before the Committee on Transportation and Infrastructure, United States House of Representatives: Ensuring ARRA Funds Are Spent Appropriately to Maximize Program Goals. May 4. TRB. 1987. Special Report 214: Designing Safer Roads: Practices for Resurfacing, Restoration, and Rehabilitation. National Research Council, Washington, D.C. TRB. 2006. Special Report 285: The Fuel Tax and Alternatives for Transportation Funding. National Academies, Washington, D.C. U.S. Census Bureau. 2013. Annual Survey of State Government Finances. Revised Aug. 22. http://www.census.gov/govs/state/. USDOT. 2010a. American Recovery and Reinvestment Act of 2009: Agency and Program Plans Update Second Quarter 2010. USDOT. 2010b. Recovery Act §1201 Maintenance of Effort Provision: Preliminary Report on Implementation and Results. Nov. USDOT. 2011. Recovery Act §1201 Maintenance of Effort (MOE) Provision: Preliminary Report on Implementation and Results. Jan. 27. Vernez, G., and R. Vaughan. 1978. Assessment of Countercyclical Public Works and Public Service Employment Programs. Rand Corporation, Sept.

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