Thursday, August 13, 2009

North Carolina Ambivalent On Renewable Energy

The North Carolina legislature recently passed a number of bills providing incentives for renewable energy production and development, including a five year extension of renewable energy state tax credits awaiting Governor Easley's signature. However, the North Carolina Senate also passed a bill, now on its way to the North Carolina House, which would restrict the height of wind turbines located along the state's western ridgeline to 100 feet. According to Brandon R. Blevins, wind program coordinator for the Southern Alliance for Clean Energy, this legislative measure, if passed by the House and signed into law, would ban two thirds of the on shore wind resources in the state.

House action on the ridgeline turbine restriction measure is not expected until the legislature reconvenes in the spring of 2010. Hopefully by then North Carolina environmentalists will have determined whether or not clean energy resources are more important than scenic views.

GSA Stimulus Project Resource

Our friends at have created an excellent resource for those of you trying to find out where the General Services Administration is proposing to spend the $5.5 billion in stimulus funding appropriated for construction and renovation of energy efficient courthouses, post offices, and other federal government buildings, before the cash is all spent.

Follow this link to an interactive map of the United States, and click on the flags near your location to find out where each of the 250 projects in the Federal Buildings Fund will be undertaken. The map will tell you the name of the project, the address, and how much money is allocated for the job:

Once you have this information, if you are interested in a particular project, you can get the project bidding information and details at the federal business opportunities website:

Hurry up, before your competitors beat you to the bid openings.

Saturday, August 8, 2009

Chicago Infrastructure Construction Kicks In, Demonstrating Indirect Patronage At Its Finest

Chicagoans waiting for the effects of the economic stimulus to be seen in our town were treated to a sweet beginning Friday, though it was soured somewhat by the fact that our construction season is already halfway over. Mayor Richard M. Daley and his security detail drove as far north and west as you can go and still be inside Chicago's city limits, to the scene of a road construction project extending along Milwaukee Avenue from Montrose to Gale Avenue in the Jefferson Park neighborhood, where he met with the entourage of Fifth District Congressman Michael Quigley to announce commencement of Chicago's five year, $8.4 billion city wide capital construction program.

Funded by a mixture of federal stimulus appropriations, state highway appropriations [yes, there are state highways inside the city] city bond issues and tax increment financings, this year's share of the cash will amount to about $1.7 billion for five libraries, numerous bridges, 550 blocks of street and alley resurfacing, and 150 blocks of sidewalk replacement. The total program of $8.4 billion will also include $3.9 billion for construction at O'Hare and Midway airports.

Daley selected Quigley's Fifth District as the scene of the announcement for a host of reasons: the Milwaukee Avenue project he stood in front of will put $11.3 million into the Jefferson Park neighborhood this year; Daley was also able to tout next year's $20 million in street work at the nearby six corners intersection; and Quigley's constituents are in default on more than a quarter of their home mortgages due to job losses and other financial problems. Both politicians praised the fact that the projects will not only put people back to work and make much needed infrastructure improvements in the city, but also benefit the local business community by improving local travel and parking, putting the neighborhood businesses in a better competitive position.

"Infrastructure is good for the economy and good for jobs," Daley said. "All these improvements basically strengthen economic development, jobs here in the city, and it helps businesses, especially now with so many of our residents struggling financially." Quigley echoed Mayor Daley's sentiments: "They're putting food on the table, they're improving our infrastructure, and they're making a long term economic impact for all these businesses."

Projects announced for this year include: bridge repairs at Jackson Boulevard and the Chicago River, Halsted Street and the Chicago River, and Lawrence Avenue over the Kennedy Expressway; library construction at the West Town Branch, 1615 West Chicago Avenue, Greater Grand Crossing Branch at 1008 East 73d Street, and West Humboldt Park Branch at 727 North Kedzie. Daley's political genius can be seen in the fact that these projects - jobs for community residents, new bricks, mortar and asphalt pavement on display for all citizens to see - are as usual scattered geographically among the city's 50 wards. Contracts for those listed projects where the work will not be done directly by City of Chicago Department of Transportation crews will go to bid with provisions requiring the successful bidder to employ a certain percentage of its work force from among residents of zip codes in the very wards where the work will be done. The jobs won't come from the Daley machine, but they come from the policies of Daley's Public Building Commission requiring contractors to hire local workers - and this indirect patronage is not lost on the aldermen whose wards receive the Commission's blessing for major construction work.

Friday, August 7, 2009

Will Health Care Reform Create Second Class Employees?

According to Center on Budget and Policy Priorities Executive Director Robert Greenstein, the Senate Finance Committee healthcare bill, which Max Baucus expects to finally publish to the public sometime soon, will include a mandate on employers to provide health coverage to employees, or pay the government an amount equal to the government subsidy under the public or co-op plan for every employee who qualifies for subsidies because of family income below 300% of the federal poverty level. Wade Henderson of the Leadership Conference of Civil Rights points to a powerful unintended consequence of such a mandate - the bill would encourage discrimination against just those people health care reform is supposed to help.

The proposal would create two classes of employees: class one, workers who have family coverage under the health plan a parent or spouse gets from a different employer; class two, single parents and low wage employees for which the employer would have to pay the subsidy amount to the government. So the "pay-for" which is supposed to reduce government health care costs below the trillion dollar mark will drive the poor and minorities reform is supposed to help out of the work force, to be replaced by the spouses and children of middle class or rich people who have health insurance through the employer of a primary breadwinner. Why hire an impoverished single mom to work as a flagger on your highway construction project, and pay the government fine for not giving her health insurance for herself and her kids, when you could give the same job to a college kid whose dad or mom already has family coverage from a job that pays him or her six figures? The danger signal is on the road either way.

These are the kinds of monumental mistakes that will get made in the headlong rush to push any kind of "health care reform" through a Congress feeling the need to act now or forget it, rather than giving careful consideration to all the social and economic effects of every provision in legislation numbering over a thousand pages long. No wonder angry citizens are getting on the bus to ride from one politician's town hall meeting to another, venting their frustration with elected representatives who seem to put political expedience above the real needs of the constituents they serve.

Wednesday, August 5, 2009

Stimulus Spending Transparency: Illinois' Website Ranks Dead Last

President Obama promised that ordinary citizens would be able to easily find out, on line, who would be getting the $787 billion dollars in tax money appropriated to stimulate our economy in the American Recovery and Reinvestment Act, commonly known as the economic stimulus legislation. Efforts to make that dream come true, however, have become a nightmare, especially in Illinois.

Under the terms of the ARRA, each state has established an internet site citizens can visit to search for information about the stimulus money being spent in their state. A recent study on the effectiveness of these web sites in actually making information available to the general public demonstrates, however, that all 50 of them fall far short of what is possible or even reasonable in terms of making spending information available, and we should not be surprised to learn that among the 50 states, the Illinois website is the worst of all.

The recently released study by an organization known as "Good Jobs First" can be found by following this link:

The study rated each state's web information sites on a scale of 0 to 100. Separate ratings were given to each state respecting the information available for all stimulus programs on the state's main ARRA website, and the state's particular site or page for highway construction projects. Illinois received a rating of zero in both categories, making it far and away the worst state of all in terms of the lack of public information about stimulus spending, though Illinois is getting more money than any other state out of the total $787 billion.

Only four states scored above 50 points on both ratings, and the average overall score is 28.2, with a slightly higher average of 37.8 for the road construction information. Nearly all the sites fell down in terms of showing where within the state the money is being spent, or whether the spending locations coincide with regions of high unemployment or mortgage foreclosure rates. Only 18 states report how many jobs highway projects have created, and only four provide job creation data for other spending initiatives. No one really knows whether or not the economic stimulus legislation is in fact stimulating the economy or creating jobs.

The Good Jobs First report itself misses the mark in one important regard. While complaining that few of the websites even name the general contractors receiving construction projects paid for with stimulus funds, none of the sites discloses which subcontractors and material suppliers are getting the money. This level of reporting would be simple to achieve. In order to get paid on a construction project, every state requires the contractor to submit a sworn statement and lien waivers showing how much of the money the general contractor kept for itself, and how much got paid to every subcontractor and material supplier on the project. Merely by posting .pdf copies of these documents on state websites, citizens interested in the progress and efficiency of any particular project could quickly drill down to a complete list of every business that was paid any money for labor or materials on the project.

Furthermore, neither the bureaucrats nor the contractors on the project would have to write up a single document they are not already required to prepare. As far as I can tell all this information is already required to be public under the freedom of information laws in every state anyway, so no one's toes get stepped on, and no one has to do any extra work. Just run the sworn statements and lien waivers through a scanner every month, and post them on the website. Nobody even has to spend money on stamps. Mission accomplished.

This sort of reporting would be especially valuable in letting people know how much money, altogether, general contractors and trade contractor who work on projects all around the country are getting out of the $787 billion appropriations bonanza. It's easy, yet no state is doing this. And, Illinois is putting out less useful information than anyone else. Surprise, surprise.

Slowing Down Stimulus: It Isn't The Money, It's The People

Government agencies, both state and federal, have finalized plans for spending the billions of stimulus dollars appropriated in the American Recovery and Reinvestment Act, but in numerous cases only as little as 1% of the cash has actually been spent by the government and deposited in individual or corporate bank accounts, thereby flowing back into the economic activity of the country. As a result, in the construction industry north of the Mason Dixon line, thousands of stimulus projects won't see notices to proceed until next spring.

The reason: cash was appropriated for bricks and mortar, or concrete and rebar, but not for the federal and state bureaucrats needed to process the paperwork and cut the checks. In the inimitable words of Caltrans Deputy Program Manager Earl Sealberg: "If we go any faster, we're going to be breaking people." So reality comes crashing down on the optimism of the Obama administration - it actually does take more man hours to spend a trillion dollars than it does to spend a few billion in the same time period.

Tuesday, August 4, 2009

Highway Robbery: Part Two

Just before returning to their home districts for a five week August recess, Representatives in the House passed legislation taking $2 billion out of the stimulus money appropriated for renewable energy construction, and turned the cash over to the "cash for clunkers" program which ran out of money after only one week of operation. If, as expected, the Senate passes the House measure before Senate adjournment Friday, this means the CARS program has received $3 billion total appropriations - $2 billion stolen from the construction industry.

The robbery doesn't end with the funds shifting measure, however. Every legislative action this session, it seems, has unintended consequences, and this bill ends up stealing another billion dollars from the construction industry. Three billion dollars for clunkers divided by the maximum rebate of $4,500 per car means 666,667 gas guzzlers will be taken off the roads. According to Senators Diane Feinstein and Susan Collins, the mileage difference between the clunkers traded in and the new fuel efficient cars purchased with assistance of these rebates averages 9.6 miles per gallon. If the average car owner drives 12,000 miles per year, the clunker tradeins represent 8 billion miles driven per year. Divide that by the fuel savings of 9.6 mpg and it represents 833,333,333 gallons of motor fuel not pumped every year.

Today's federal motor fuel tax rate is 18.4 cents per gallon. Multiply that number by the 834 million gallons less fuel sold per year, and the annual revenue loss to the federal Highway Trust Fund will equal $153.3 million. That is a loss to the Highway Trust Fund of $920 million over the typical six year reauthorization. Given the fact that not every clunker traded in qualifies for the largest rebate of $4,500, it looks like cash for clunkers actually steals at least $3 billion from the construction industry. Ouch!

Transportation Secretary Ray LaHood is pushing for senate passage of the House "Robin Hood" bill unaltered so cash for clunkers can continue spending the construction industry's cash. Feinstein and Collins both predict the Senate will pass this measure. In the long run, what will happen to the auto industry when there are no roads left to drive on?

"Award-Fee" Incentive Contracting Under Fire

A hearing yesterday held by Senator Thomas Carper's Financial Management Subcommittee of the Senate Homeland Security and Governmental Affairs Committee took procurement officials of NASA, and the Health and Human Services, Homeland Security, Defense and Energy Departments to task for "rolling over" incentive awards under federal contracts, allowing contractors to be paid bonuses for performance goals they did not meet. Pushing the performance bonuses from one month to the next permits contractors to collect bonuses for months of poor performance if they "catch up" later on in fulfilling their contracts.

Jeffrey Zients of OMB and John Hutton of GAO agreed that "rolling over" bonus fees should only be permitted in the most extraordinary of situations, while Carper and Senator Tom Coburn wondered why the practice should ever be permitted. No wonder our government is going broke!

Climate Change Debate Sullied By Forgeries

Congressional recess discussion of pending climate change bills will undoubtedly be highlighted by the fact that a prominent 17th Street lobbying firm in Washington, D.C. apparently sent forged letters purporting to be from two Virginia civil rights groups to Congressman Tom Perriello, Congressman Chris Carney and Congressman Kathy Dahlkemper, and advocating opposition to the pending legislation in the House. House Global Warming Chairman Edward Markey has launched an investigation into the forgeries, and Bonner's business practices. Bonner has said the forgeries were created by a temporary employee who has already been fired.