With economic trouble buffeting many states' budgets, governors and legislators are asking Congress and the incoming Obama administration for tens of billions of dollars in federal aid in what they hope will be a new economic-stimulus bill. The states' request could include up to $136 billion for highways and other infrastructure projects.
President-elect Barack Obama has said that a new stimulus measure would be his first order of business after he takes office. House Speaker Nancy Pelosi (D-Calif.) has said key committee chairmen are working on a stimulus package that will be larger than a $61-billion plan the chamber approved in September. Obama and Pelosi also have spoken about the need to include public works spending in that legislation.
Pennsylvania Gov. Edward Rendell (D) said in a Dec. 1 press conference that states are asking for three types of federal assistance: aid for individuals, including an extension on unemployment insurance benefits and additional spending for food stamps; countercyclical funding, including more than $20 billion for medical assistance; and spending on public works.
Infrastructure funding is "the most important part" of the plan, says Rendell, who is chairing the National Governors Association this year. He says that there is more than $136 billion worth of infrastructure project that are "ready to go," meaning that their contracts for the work can be let within 180 days.
In a meeting earlier in the day with Pelosi, Rendell said he asked the Speaker to attach a "use-it-or-lose it" provision to infrastructure funding that would be in a new stimulus bill. That language would ensure that states would have to spend their shares of the new stimulus money quickly and not simply hold it the money in their transportation accounts, he said.
Critics have argued that funding for public works projects takes too long to act as an effective economic stimulus. But North Carolina House Speaker Joe Hackney said, "The states can move quickly to put this money on the ground." Hackney, who also is president of the National Council of State Legislatures, says public works spending "is such a win-win."
Rendell added that many of the projects that are ready to go are reconstruction jobs that are the quickest to get under way. Moreover, he says many jobs already have gone through the sometimes-lengthy environmental clearances. Rendell also said, "There's no reason that we have to give "X" amount of months for a bid. This is an emergency. We can have a two-week bid requirement if we want."
He noted, "They are not small projects. We're not talking about potholes here or curbside repaving here. We're talking about major reconstruction."
Rendell estimated that "well over 70%" of the $136 billion would go for highways and other transportation projects. The rest would include water and sewer facilities, port expansions and levee projects. He also wants to see some of the money go for renewable energy projects.
NGA reports that 20 states have trimmed their fiscal year 2009 budgets by a total of $7.6 billion and 30 states have identified an additional $30 billion in shortfalls.
Obama is scheduled to meet with many of the nation's governors in Philadelphia on Dec. 2.