When Gov. Martin O'Malley announced the award of a $2 million contract to replace the deck of a bridge over the Capital Beltway in Prince George's County this month, it signaled the end of a yearlong rollout of projects financed by the economic stimulus program launched by President Barack Obama.
But the party isn't over. The economic impact of the $317 million in Maryland highway spending financed by the stimulus is expected to linger through next year and into 2012. State officials hope the flow of money will taper off just as transportation revenue begins to bounce back from years of recession that have forced severe cutbacks in construction.
Friday, Obama will travel to Columbus, Ohio, for the groundbreaking of the 10,000th stimulus road project. And while economists and politicians might debate the merits of the stimulus for decades to come, it's hard to deny the impact on Maryland's infrastructure or on industries that depend on transportation dollars.
Many state roads are smoother and transit buses are newer than they otherwise would have been. The Liberty Road bridge over the Beltway is being replaced and the main road to the Delaware beaches, Route 404, is being widened.
"I don't know how we'd keep our noses above water without the stimulus," said Jim Ross, president of the Maryland Transportation Builders and Materials Association.
According to O'Malley, Maryland's highway-related stimulus spending alone has accounted for about 3,500 jobs on 116 projects in Baltimore and every county in the state. That money flowed at a time when the state's own spending was reduced to a trickle by steep drops in revenue from such sources as titling taxes and vehicle registrations.
It wasn't enough to make up for the revenue loss that has drained the state's Transportation Trust Fund during the recession. According to the Maryland Department of Transportation, stimulus funds other than competitive grants replaced only 30 percent of the roughly $2 billion in transportation projects that had to be cut from the state's capital program.
Apart from grants, stimulus funding on transportation amounts to $638 million, including transit and other projects as well as highways. Another large portion has come in the form of $101 million won in competitive grants for projects including improvements at BWI Marshall Airport, the port of Baltimore and water taxi facilities in the Inner Harbor.
Transportation money represents just a small part of the stimulus "pie." Much of the state's $4.2 billion share of the $787 billion federal American Recovery and Reinvestment Act went for tax credits, aid to education, health programs and weatherization. Transportation infrastructure spending, while highly visible and politically popular, represents less than 20 cents of every dollar of stimulus money flowing into Maryland.
According to federal data, Maryland has not been especially quick to spend most of the federal dollars directed its way under the stimulus program. Of all the money administered by state government, only about 28 percent has gone out the door
But transportation has been an exception. The nation's first highway project awarded under the stimulus last year was a resurfacing job in Montgomery County. And Maryland was the ninth state to fully commit its highway funds, according to the state transportation department.
The timely awards could have a downside, however, if the funds run out before the economy picks up enough to generate the revenues needed to replenish the Transportation Trust Fund.
Ross said some companies are already beginning to feel the pinch as projects wind up without new ones in the pipeline. What work is out there, he said, is dominated by two projects — the Intercounty Connector and the Express Toll Lanes being added to Interstate 95 north and east of Baltimore — both funded largely by tolls.
"As an industry, we're suffering a bit," he said.
But Maryland Transportation Secretary Beverly Swaim-Staley said that while some of the small paving jobs have been completed, there are still plenty of jobs being created by stimulus dollars.
"The work that's going out in the tail end, it's the larger projects that will take the longest," she said. One example is the $30 million Liberty Road bridge replacement, which is expected to take until late 2012 to complete.
For the first time in a couple of years, she said, there are signs of a pickup in the revenues that fund transportation projects. For instance, vehicle titling tax revenue — hurt by the recession's impact on car sales — was up 10 percent in March, 12 percent in April and 23 percent in May from the previous year's figures. Vehicle registration revenue tends to follow, the secretary said. Meanwhile, toll collections from commercial vehicles are also rebounding.
"We are definitely on all our fronts seeing early indications of a [recovering] economy and growth in all the business sectors we look at," Swaim-Staley said. She expressed optimism that revenues will exceed current estimates in the fiscal year that starts July 1.
If the stimulus can fill the gap in projects between the worst of the recession and the rebound in revenues, Swaim-Staley said, "it will have done what we need it do."
But Ross expressed concern that the stimulus well may run dry before new streams of money start flowing. "It's still pretty thin pickings out there for highway construction."
To keep money flowing into infrastructure, Congress should move forward on a new, six-year transportation authorization bill, Swaim-Staley and Ross say. The last one expired last year, and federal transportation programs have been operating on short-term extensions — with little substantial new investment — since late last year.
David Goldberg, communications director of Transportation For America, said it's unlikely a long-term extension will pass this year. And even next year, he said, Congress will face a gap of at least $150 billion between desired spending levels and available revenues at a time when few legislators are willing to talk about a gas tax increase.
Goldberg, whose group advocates for increased infrastructure investment, said there's a real concern that the legislation could stall, forcing Congress to pass a series of short-term extensions that make it impossible for states to plan long-term investments just as stimulus money is running out.
"Then we'll see this attrition of the construction capacity, and when we do wake up and decide we have to make the necessary investments to preserve our infrastructure and expand it for a larger population, we will find we have diminished capacity and it make take us several years to ramp up," he said.
Major highway projects financed with stimulus funds:
•Baltimore Beltway, Liberty Road bridge replacement, Baltimore County, $30 million
Capital Beltway, Potomac River to Interstate 270 resurfacing, Montgomery County, $11.5 million
Interstate highway lighting, area-wide, $11.1 million
Northern Parkway, Park Heights Ave. to Falls Road rehabilitation, Baltimore, $10.9 million
Orleans St., Wolfe St. to Central Ave. rehabilitation, Baltimore, $10.9 million