What 'Shovel Ready' Really Means

Thursday, March 12, 2009

Despite the hype over shovel-ready projects, and a list 787 transit projects that are "ready-to-go within 90 days", it's going to take well over a year before the $8.4 billion that the federal stimulus bill allocates for mass transit is actually spent.

Last week, the Federal Transit Administration put out its regulations on spending that money (PDF). They stipulate that half of the money allocated to a particular state or transit agency must be "obligated" within the next six months, and the rest of it in the following six months.

But "obligate" means simply this: that the FTA agrees that the local transit agency is planning to spend the money in an appropriate way. It does not mean that the agency has to have put the project out to bid by that point, much less that it be put under contract.

By contrast, the version of the stimulus bill put out by the House Appropriations Committee version called for transit agencies "to enter into contracts or other binding commitments" on the first half of the money within 120 days--in other words, a shorter time frame and a higher bar to meet.

But according to Congressional staffers, senators, and transit agencies, objected, saying it would be just too unrealistic, and that the agencies would end up returning too much money to the federal government, unspent. The money, the argument went, might not create jobs very quickly, but if those deadlines are too tight, it wouldn't end up creating any jobs at all.


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