California has finally begun detailing its stimulus spending, and that means both good and bad news for builders. The good news is that billions of those dollars will go toward construction. The bad news, at least for architects, is that the majority will be going to infrastructure, not architecture, projects.
According to the state of California, the American Recovery and Reinvestment Act (ARRA) will provide the state with a total of $85 billion in funding, $35 billion in tax relief, and $50 billion from federal sources. Federal construction-related spending from that pot should total about $5 billion, with up to $4 billion more coming from California itself, according to Cliff Brewis, senior director of editorial operations at McGraw-Hill Construction/Dodge. Brewis, who has compiled a list of all funded construction projects in the state, explained that the funding leans heavily toward engineering projects over architecture projects.
Government is primarily responsible for infrastructure,and it has been underfunded for years," explained Brewis.
Back on March 11, the California Transportation Commission approved the state’s first 57 stimulus-related projects, totaling $625 million; most of them to help repair highways and bridges. The McGraw-Hill Construction/Dodge list indicates that as of March 31 California has allocated funds for a total of 447 stimulus-related construction projects, totalin $7.5 to $7.7 billion, which will be paid for by federal and state money. Highway and road paving, storm sewers, roadway lighting, new parks, bridge construction, and sidewalk construction make up about 90 percent of the projects. The remaining tenth will include schools, fire and police stations, government buildings, offices, medical clinics, airport terminals, and military installations.
That figure does not include the governor’s discretionary funds; GSA funds; and Department of Energy Funds that will soon be coming into the state as well.
The funding probably won’t hit the construction market until next year, he said. And many of California’s federal stimulus funds are still being applied for or are waiting response from the federal government, confirmed Camille Anderson, a spokesperson for Governor Arnold Schwarzenegger.
“There are many and various pots of money,” she said. “We’re still working through all the rules and regulations.” She added, “We have an immense amount of staff assigned to this. We’re going to ensure that we utilize this funding as it comes forward.”
At the end of March the state sold $6.5 billion in general obligation bonds to help pay for more public projects ranging from school construction and repair to transportation, water, and flood control. That includes $700 million for infrastructure projects that were halted this winter due to the state’s budget crisis. Meanwhile, upcoming bills in Congress that could help architects include legislation on transportation, climate change, affordable housing, education, and health care.
Regardless of what the figures work out to, stimulus money is just the beginning of the recovery, pointed out Andrew Goldberg, senior director of federal relations at the AIA. "At the end of the day, the hope is that all these efforts will generate enough economic activity to help the whole economy. Anything that helps unfreeze credit will help building get going again. In a macro sense, the overall recovery will do more to help things get moving than the stimulus.”