"Shovel-Ready" Stimulus Projects and "Earmarks"

Budget earmarks have gotten a lot of unwanted attention and have uniformly been equated with fiscal evils. Earmarks are provisions in legislation assigning funds to local entities or states for specific projects. They amount to evading the normal process where funds are first directed to federal executive agencies which in turn channels cash to the states and local agencies through a complex and lengthy grant process.
Earmarks have gained an extremely corrupt image because it is an example of congressional abuse of taxpayer money. It bumps favored projects to the front of the line where all the other projects are waiting. It also takes money out of the pot that the projects in line are waiting for. As an example of their toxic nature, earmarking has been explicitly banished from last year’s stimulus package (American Recovery and Reinvestment Act of 2009).
But that doesn’t mean there are not traces of earmarking in qualifying “shovel-ready” projects.  In fact, many projects would not be shovel-ready had it not been for earmarking.

Federal transportation funds are distributed to the states largely by formulas based on a state’s payments into the highway trust fund, the number of lane miles and vehicle miles traveled. States then select which projects will be funded. Congress can and does take funds out of the formula process and “earmarks” them for specific projects. Project sponsors, including cities and counties request earmark funding for their projects that are not selected by the state or county agency in the regular programming cycle so they can keep cranking out the reports and studies that keep them in the process. Since gas tax and other sources are never enough to fund all projects the states would like to advance, the earmarks tend to dilute the limited funds even further. But those earmarks can also keep projects in the process long enough to become and remain shovel-ready.
A project’s low priority in the state’s eyes does not mean it lacks merit.  Technical criteria such as arithmetic formulas give the impression of objectivity, but don’t always produce equitable or fair results. A good example is the method by which gas taxes are distributed back to the counties.  All motorists know that it is collected on the basis of the number of gallons purchased and in the case of heavy trucks, by their weight. But it is distributed back to the counties based on lane miles and vehicle miles driven, but not on vehicle weight. The freeways in Los Angeles County show the scars from heavy trucks serving the Ports of Long Beach and Los Angeles, but the formula does not appropriately compensate the region for their wear and tear.
Metropolitan Planning Organizations – part of the national network of regional transportation planning agencies - often propose congestion reducing/energy saving mass transit systems, but state transportation departments are traditionally highway-oriented. That leaning tends to favor highway projects.  Without some assurance of funding from federal and state entities, rail projects might have to be removed from regional transportation plans if it were not for earmarks. All of the current proposed Los Angeles area rail projects, both light and high-speed, have included “earmarks” in their survival strategy with varying degrees of success.
While earmarks may be the source of cash that keeps a project shovel-ready, they also tend to reflect political clout benefiting better off communities as well as construction companies and unions that are, incidentally, among the least racially integrated parts of the economy.