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Federal Stimulus Money, In Some Cases, Only Indirectly Benefits Connecticut

JOSH KOVNER

June 11, 2009

State officials are putting $70.9 million in transportation stimulus money toward the purchase of 136 new buses, but the expenditure is not expected to create any jobs in Connecticut.

That's because this isn't your grandfather's job-creation program. Unlike the days of the New Deal, the stimulus money in 2009 increasingly is being used to help companies hold on to their pre-recession workforces, rather than to add new jobs. And those companies do not even have to be in the state that receives the stimulus money.

Because the buses will not be built or outfitted in Connecticut, the question of how the expenditure will benefit the state economy takes a bit of explaining.

Buying new buses with stimulus money, including hybrids and 60-foot articulated buses that bend in the middle, will free up millions in regular state and federal funding for smaller projects — $3 million in improvements to Hartford's Union Station, for instance — and those projects will create or retain Connecticut jobs, said Michael Sanders, transit administrator for the state Department of Transportation.

Bids for the bus deal will be opened Monday. Sanders expects to see the big bus manufacturers in the mix, among them New Flyer Industries, headquartered in Winnipeg, Canada; North American Bus Industries Inc. of Anniston, Ala.; and Canada-based Nova Buses, part of the Volvo Group.

The contract will be awarded by October. The new buses will roll by October 2010.

Sanders said that Farmington-based Carrier Corp. could get some air-conditioner orders out of the deal, and Connecticut electronic-component and insurance companies could see some work, but he does not expect a lot of "Connecticut content" in the bus order.

"But you have to remember," he said, "this is a federal stimulus program to create jobs nationally."

He said that the job creation could work both ways — a stimulus-driven increase in national orders for fuel cells, for example, would benefit Connecticut's sizable group of fuel-cell manufacturers.

Sanders said that the DOT is applying for about $20 million in grant funds to do additional hybrid conversions, install fuel cells in bus garages to provide electricity and build a bus storage building. He said that the latter two projects would create or retain jobs.

This equation — putting the stimulus money up front, freeing up funding for other, potentially more job-friendly projects later — "is fine if there's money to free up," said Cheri Quickmire of Common Cause of Connecticut.

On the education front, for example, most of the state's $750 million in stimulus funds will be used to plug deficits in local budgets and save teaching jobs, and there is little money to use later to create new programs.

The DOT's two biggest stimulus-funded highway and bridge projects — the $73 million replacement of an Amtrak bridge on Route 1 in Branford and a $70 million overhaul of a section of the Merritt Parkway in Fairfield and Trumbull — are going, respectively, to J.F. White Contracting Co. of Framingham, Mass., and O&G Industries of Torrington.

Jack Carney, an executive with J.F. White, said that the company will not be hiring new workers, but that the stimulus contract helps the company retain its pre-recession workforce. David Oneglia of O&G did not return phone messages.

DOT officials said that using the stimulus money to pay for these two long-planned projects will leave money for projects that otherwise might not have been funded.

Steven Lanza, editor of the magazine The Connecticut Economy, said that in Connecticut and nationally, "the stimulus money is helping to keep us where we'd be if there was no recession. It's really been sort of a stabilizer, keeping the government sector from adding to our problems. Hopefully, it's a springboard for investments that yield private-sector returns."

Quickmire said Common Cause wants to be sure that projects financed using the "freed-up" funds have the same priorities of the stimulus program — job creation and an emphasis on sustainable energy.

Sanders said that the DOT will be looking to order both hybrid and diesel-powered buses.