Stimulus dollars put road contractors to work

RALEIGH -- ******

CORRECTION

A front-page story Sunday about the federal stimulus creating jobs in North Carolina gave an incorrect amount for the federal deficit. The deficit for the fiscal year that ended Sept. 30 was $1.4 trillion.

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Kelvin Whitehurst bought a third dump truck and hired a third driver this summer, after he landed his biggest job yet in 10 years as a highway subcontractor.

He took in $155,000 for three months of work lining up trucks to haul asphalt for a nighttime paving operation on the Interstate 440 Beltline. Whitehurst had a small piece of a $3.6 million project financed entirely with federal economic stimulus dollars.

In a tough economic year, it was just the break he needed.

"Dump-trucking was kind of hard this year," said Whitehurst, 41, ofRaleigh. "So I was really thinking about downsizing until this contract came along."

Congressional leaders and President Barack Obama talked a lot about job creation in February when they approved the American Recovery and Reinvestment Act, a three-year program of $787 billion in spending and tax cuts that will send at least $8.6 billion to North Carolina. The money is flowing into programs from home weatherization and flu shots to schools and public works.

North Carolina highway contractors are recalling workers idled last fall after a nationwide economic contraction forced a dramatic cut in highway spending. The state Department of Transportation has 110 stimulus-funded road and bridge projects worth $348 million under way, with more contracts to be awarded in the coming year.

"We've hired back maybe two or three dozen people who had been laid off, with maybe a handful of new hires," said Ricky Vick, executive vice president of Wilson-based S.T. Wooten Corp. "It's been the most difficult economic environment that I've seen in my 32 years here."

Wooten has been the low bidder for 14 DOT stimulus contracts so far -- the most won by any contractor -- worth more than $45 million. They include several Triangle paving jobs and the $14.3 million Booker Dairy Road extension in Smithfield.

"It has been a huge plus for our ability to retain very good people and keep them working," Vick said.

Value is debatable

It isn't easy to figure out how many construction jobs have been created -- and how many layoffs averted -- with stimulus money. North Carolina has lost 36,000 construction jobs in the past year, a 15percent drop, according to September employment reports.

The state received $838.8million for highway, bridge and transit projects. DOT leaders are angling for hundreds of millions more in stimulus grants for a new Inter state 85 bridge near Salisbury and a statewide rail upgrade.

State and federal officials werebusy last week turning out their first estimates of stimulus-supported jobs in all categories. A federal report covering about 7 percent of all stimulus spending said that contracts awarded directly by federal agencies had created 302 jobs in North Carolina.

A broader review, looking primarily at state agency spending, counted 24,442 stimulus jobs in North Carolina so far. Schools and Medicaid programs accounted for more than 19,000 of the total, and the tally included 248 jobs created or preserved by DOT projects.

State GOP leaders were skeptical about stimulus benefits.

"I would say the reality is the stimulus program has done nothing to create jobs," said Sen. Phil Berger of Eden, the Senate Republican leader. "We need a commitment to lower taxes and reduce mandates on businesses if we want to create jobs. That's the way we got the economy started in the 1980s."

Rep. Paul Stam of Apex, the House Republican leader, said any jobs gained now will effectively be lost when the federal government repays the money it borrowed for the stimulus program.

The federal budget deficit for the fiscal year ending Sept.30 was $1.42billion, according to U.S. Treasury figures released Friday.

Beltline repaving

Work is winding down on the $3.6million project to repave the Beltline from Wake Forest Road to Wade Avenue. It is one of three stimulus contracts won so far by Rea Contracting of Charlotte.

"We probably have about 40people working that would be at home right now if it wasn't for that stimulus project," said Ed Spencer, a Rea vice president who overseesRaleigh operations. "Without the stimulus money, there would bevery little work."

DOT reports show that Rea and its subcontractors, including Whitehurst, paid 113workers who put in at least a few hours on the Beltline job in August, their busiest month.

But most of them worked only parttime on the Beltline. In the road construction industry, equipment operators and other workers frequently divide their hours among two or three job sites in the same month.

In July and August combined, the Beltline project workers were paid an average of $15.05 an hour for a total of 7,480 hours. A standard 40-hour week adds up to an average of 347 hours in two months, so this project provided work for the equivalent of roughly 21 full-time employees.

Whitehurst did his part to spread the wealth. Even after he took on a third driver and picked up a repossessed truck for $65,000, he had more asphalt than he could handle.

He rounded up about a dozen independent truckers for the Beltline job and wrote payroll checks for $33,368 in July and August.

"I just hired on some extra guys who have trucks," Whitehurst said, "and we all pitched in to get the job done."

The recession has forced contractors and subcontractors to compete fiercely for DOT jobs, with project bids frequently coming in at less than 80 percent of the cost estimated by DOT engineers. That's a bargain for taxpayers, and it means North Carolina will get more miles of road improvements for its share of theObama stimulus.

'Dirt-cheap' bidding

But it squeezes profits for the companies that get the work. Wayne Turner of Raleigh, whose Turner Asphalt was another subcontractor on Rea's Beltline job, is less upbeat than Whitehurst.

"It's not enough money to go around," Turner said. "We're fixing to do a big layoff next month. There are somany people without work right now that people are bidding stuff dirt cheap. Maybe next year it will be better."

When Gene Conti took over as state DOT secretary in January, he warned state leaders not to look upon Obama's stimulus program as a bonanza for road building. North Carolina's share will roughly balance out an expected $900million shortfall in state and federal transportation revenues over the next three years.

That forecast is still holding. Fuel tax proceeds have stopped falling and now are running slightly above last year's level -- but still below what the state collected two years ago. Collections of the state highway use tax on car sales are down more than 20percent.

The stimulus is providing a tenuous lifeline for road builders, said Mark Foster, the DOT's chief financial officer.

"They were laying people off left and right before the stimulus came," Foster said. "It has at least temporarily stopped that.

"But really the question is what's coming afterward. If the economy doesn't pick up, what will replace that level of investment?"

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