Accelerated road projects create jobs — but for how long?

Capital News Service

LANSING — Increased road construction across the state may not help keep jobs in the state much beyond that, critics say.

The Jobs Today Initiative proposed by Gov. Jennifer Granholm in 2005 condensed the next 10 years’ worth of road construction projects into three, accelerating work and providing jobs.

The $400 million initiative came at a time when seven counties were looking to lay off road workers because of a lack in funding, said Ed Noyola, deputy director of the County Road Association of Michigan.

For every $100 million spent on road construction, 4,750 jobs are created or maintained, said Mike Nystrom of Michigan Infrastructure and Transportation Association, a construction trade association.

Yet some legislators wonder what will happen to funding in the long run.

Rep. Tom Pearce, R-Rockford, a member of the House Transportation Committee, said increased construction would support jobs for only a few years.

“My greatest concern is simply what’s going to happen in two or three years when we’ve moved so much up into one fiscal year,” Pearce said. “And does that mean that we’re setting ourselves up for not having sufficient funds for construction on roads later?”

Bill Shreck, director of communications at the Michigan Department of Transportation (MDOT), said the speeded-up program has been a success.

The initiative gives communities advances on federal grants with low-interest rates, so projects can start sooner.

To receive federal funds, local governments have to match a percentage of the grant, usually around 20-percent, he said.

The initiative also covers the 20 percent match, so local money can be put toward other projects, he said.

“We are very pleased with the way the road program is going,” Shreck said. “Local roads are having a tougher time, and this will give additional money for their system.”

Yet determining where future road money will come from after accelerated projects are finished would address only part of the budget crunch that construction projects face in upcoming years, Nystrom said.

“Yes, there was a short-term gain in jobs, a short-term gain in fixing some areas that need it, and in the end it was a short-term fix to a long-term problem,” he said. “It’s a drop in the bucket, quite honestly.”

Problems facing transportation maintenance go much deeper than accelerated funding can fix, Nystrom said. This year, the MDOT spent about $1.5 billion under its capital annual program with the help of the accelerated projects, yet by 2008 the spending will drop to $900 million, he said.

“In the end, I think the Legislature and the government have to step up and realize a complete, well-thought-out solution is needed, and it’s going to have to have a lot of different components,” Nystrom said.

Those components may include adjusting the tax on fuel, which is fixed at 19 cents per gallon, he said. When gas prices go up, consumption goes down. And when gas prices shoot up, as they did last summer, the incoming tax dollars drop, making construction funds tighter, Nystrom said.

In addition, pressures on the global level increase the cost of petroleum products essential for road projects. Prices for materials such as diesel fuel, steel and asphalt have increased an average of 23 percent per year in the last three years, compared to an average annual inflation rate of 4 percent, he said.

“There are little things all over the place that put stress on the dollars coming in,” Nystrom said. “With all these pressures, the (road) deterioration rates don’t just stop.”

Road conditions are tied closely with economic growth, and the Jobs Now Initiative only starts to address the need, he said.

“A business looking to leave Michigan — or come — looks at the transportation network,” Nystrom said.

Rep. Glenn Anderson of Westland, the top Democrat on the Transportation Committee, said coming up with additional money for road work will be a priority for lawmakers and will most likely find solution next year.

“There has to be additional revenue for our roads or else we will be in the same situation in 15 years,” Anderson said

The Jobs Today Initiative is important because good roads attract businesses, and businesses bring taxes, he added.

“The most frequent complaint we hear in Michigan is about the roads and the condition they are in,” Anderson said. “It’s something that will generate additional dollars.”

The Jobs Today Initiative has funded road projects in areas including Grand Rapids, Mt. Pleasant, Lansing and Detroit.

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