Spending Slashed on State, Local Construction Projects


Despite an influx of federal stimulus money, states and local governments are cutting back spending on schools, roads, offices and other construction projects, according to recent data.

Investment in infrastructure is expected to drop roughly 7 percent to $269 billion this year, according to USA Today. It is the first time that spending for state and local construction projects has declined since the Census Bureau started tracking in 1993.

The cutbacks have affected as many as 90,000 state and local governments, including cities, counties, school districts, universities and utilities. The real estate hardship, voters’ reluctance to take on more debt, falling building costs and fewer new residential subdivisions that require roads have contributed to the cuts.

The stimulus program has helped soften the blow. It will pump $135 billion into state and local construction projects over several years. The types of spending favored in the stimulus bill are booming. Airport spending is up 12%. Mass transit work is up 17%.

But the core of infrastructure spending – on schools, sewers, water plants, prisons, fire stations – has experienced sharp drops in nearly every category, according to the newspaper.

Even spending on roads is down 4% in the first four months of 2010, mostly because cities have cut back on repairs even as stimulus money has boosted new projects.

“It’s easier to postpone building a library than to lay off librarians already on staff,” Ken Simonson, chief economist at the Associated General Contractors of America, a construction industry trade group, told the newspaper. “Construction is always vulnerable when spending gets cut.”

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