Public Projects to See Funding Cuts
By CHRIS CZIBORR
Hope for the best but prepare for the worst.
That’s what officials at engineering and architectural companies are saying about Gov. Arnold Schwarzenegger’s tough talk on cutting state funding for public works projects,especially transportation.
Schwarzenegger’s planned cuts to Southland transportation projects alone could top $3.4 billion and include nixing $178 million to widen the Garden Grove (22) Freeway.
As part of those cuts, Schwarzenegger wants to use more than $1 billion in gasoline tax revenue to help tackle the state’s $14 billion budget deficit. That money had been earmarked for transportation projects. The budget is due in June.
“We’re monitoring the situation,it’s potentially something that could affect our business in a negative way, at least in the short term,” said Don Caskey, a senior vice president at the Costa Mesa office of Fort Worth, Texas-based architecture and engineering company Carter & Burgess Inc.
The looming cuts come after a heady run for public works projects. The past few years have seen a slew of city, school, road and other projects that were planned before the economic downturn took its toll on governments.
The good news: Orange County water projects, which rely heavily on federal money, aren’t in danger.
President Bush’s budget proposal includes continued or added funding for several projects, including the Orange County Water District’s Ground Water Replenishment project and the Santa Ana River project.
But transportation projects, which rely heavily on state funding, aren’t likely to fare as well. Some projects could wind up getting delayed or scrapped until the state budget crisis gets resolved.
“Transportation work is just going away for the next year to 18 months, apart from only a very select few projects,” said Douglas Reinhart, division executive vice president at the Irvine office of Pasadena-based engineering company Tetra Tech Inc.
The widening of the 22 Freeway stands to survive but will be broken into three stages. That should help the Orange County Transportation Authority deal with a loss of state money for the $438 million project.
“It will be a scaled down version because there is no state money,” Reinhart said.
While roads stand to take a hit, other transportation projects are strong, according to Thomas Peters, senior vice president and regional manager at the Santa Ana office of Denver-based engineering company CH2M Hill Cos.
“We’re actually pretty optimistic about the transportation situation over the long term,ports and airports work and other aspects of transportation business are still strong,” he said.
The big hope for engineers and architects is that the rebounding private sector will supplant waning state work.
“Real estate development work is going real strong, and as long as interest rates stay strong that’ll help,” Reinhart said. “We’re looking to look for those projects and clients that are going to have the money to spend to make up losses in public works contracts.”
Other public works projects won’t go away, according to Caskey of Carter & Burgess.
“There are still a number of public projects, especially K-12 work,” he said. “Community college work around the state will continue to go, and we’re working on some hospital projects that are state-funded that need to happen and at this point have not been affected.”
Besides, Caskey said, things aren’t as bad as they were for engineers and architects in the early 1990s.
“On average, about 40% of design and construction work in the early 1990s went away,” he said. “So it was far greater an impact than anything I think we’re looking at now. We have to take our medicine on the public sector side so the state can get its economic house back in order. We’ll be a lot stronger for it.”
