WASTEBOOK: Boondoggle Boulevard

$76 million

New Jersey

Federal Highway Administration and Department of Housing and Urban Development

More than $341 million was spent reconstructing just 12 ½ miles of a New Jersey road on which fewer than 7,000 people live. The price tag comes to about $27.3 million per mile.

The stretch of Route 35 running between Seaside Heights and Bay Head was severely damaged by Superstorm Sandy in October 2012.

Even though the project was fast-tracked by state officials, it was finished a year behind schedule and $76 million over budget.

More than $20 million of this excess was spent to pay contractors for not working. All work was stopped during the summer of 2014, but the contractors continued to be paid.  Construction was shut down for Memorial Day weekend and then halted altogether from June 13 to September. Contractors were paid again for being idle when construction was stopped while pipes were being installed under the road. “Those numbers are mind-boggling,” says Barry LePatner, a construction contract attorney. He points out “a suspension of work shouldn’t add up to ($25 million) in labor costs.”

Government officials cannot explain how another $23 million was even spent.

State officials justify the exorbitant costs by claiming “this is not just a resurfacing job.” Instead, Route 35 was “redesigned as a state-of-the-art roadway.” This included reconstructing the roadway, landscaping to enhance medians, replacing miles of gas, sewer and water lines under the road and adding bicycle lanes on the northbound side of the road.

Anthony Attanasio, who was an assistant commissioner of the state DOT until April 2014, says the setbacks were caused, in part, because the plans for the area were inaccurate. The planners “were essentially blind to what utilities were beneath the road.”  As a result, “this created a stop-and-start pattern— contractors would dig down and find an unmarked gas pipe, then they would have to call the gas company and wait for it to inspect or replace the pipe.”

Democrat state Senator Raymond Lesniak calls the project “a boondoggle” and is urging the U.S. Department of Transportation and Congress to investigate. “The Route 35 reconstruction project is the poster child for what’s wrong with the state and federal government’s Sandy relief effort,” says Lesniak.

The high price of the project was only a bump in the road for the state, however, because most of the costs were billed to the federal government.

“Very little of the cost for the Route 35 reconstruction project will be paid by New Jersey taxpayers,” according to Steven Schapiro, a spokesman for the New Jersey Department of Transportation.

“Of the $341 million project costs, $336.3 million are expenses eligible for federal reimbursement and fall under the 80 percent (the Federal Highway Administration) will pay for, totaling $269.04 million. The State share of eligible costs, which is 20 percent, would be $67.26 million. When the $4.7 million that FHWA determined was not eligible for federal reimbursement is added in, the State share totals $71.96 million. Of that amount, NJ has been reimbursed $50.1 million by a federal Housing and Urban Development (HUD) Community Development Block Grant (CDBG) for Superstorm Sandy recovery efforts. That leaves $21.86 million for which the State is responsible. However, NJDOT expects additional reimbursement from the CDBG grant but we don’t have a figure at this time,” explains Schapiro.

And while the reconstruction is finally finished, this isn’t the end of the road for the costs associated with this project. Residents say the construction damaged their homes, including cracks in walls and ceilings. At least 36 property owners contacted the New Jersey Department of Transportation with claims related to work on Route 35. The state, however, is referring the residents to the contractor but the contractor’s insurance company has been denying liability.

For taxpayers, the reconstruction of Route 35 has been a rocky road with the cost amounting to highway robbery.

The Official Wastebook

WASTEBOOK: Government Public Relations & Advertising

$1.4 billion

Governmentwide

Nationwide

A good product sells itself.

So what does it say when more than $1.4 billion is spent every year promoting federal agencies and services but trust and confidence in the government have plummeted?

Federal contracts for advertising and public relations average nearly $1 billion a year, according to a review by the Government Accountability Office (GAO).359 Sixty percent of PR contracts are paid for by the Department of Defense (DOD).

Another $430 million a year is spent paying the salaries of approximately 4,900 federal public relations employees. The median annual salary for government public relation staff is about $90,000. DOD also employs the largest number of public relations staff. The Department of Veterans Affairs (VA) had the largest percentage increase in public relations employees over the past decade. The number of VA PR staff grew more than nine percent from 144 employees in 2006 to 286 in 2014.

The total cost of PR activities governmentwide is higher than the $1.4 billion spent on contracts and employees, but is difficult to calculate. This is due, in part, to public relations activities not being delineated from other activities in contracts with broader purposes. “Although advertising and public relations contracts data provide an indication of the magnitude of federal spending on public relations activities, they do not capture the full scope of these activities,” says GAO.

GAO describes public relations as “an effort to develop and disseminate information to explain the activities of and the issues facing [an] organization,” which includes “issuing press releases and producing material for radio and television broadcasts.” The White House Office of Management and Budget (OMB) says “public relations” includes “community relations and those activities dedicated to maintaining the image of the governmental unit or maintaining or promoting understanding and favorable relations with the community or public at large or any segment of the public.”

Advertising consumes the largest amount of what is spent on public relations by federal agencies.

Agency Average Annual Cost

Department of Defense $626.2 million

Department of Health and Human Services $116.7 million

Department of Commerce $37.7 million

Department of Homeland Security $37.6 million

Department of Transportation $36.0 million

Department of Veterans Affairs $23.6 million

Department of Agriculture $8.8 million

Department of Justice $5.9 million

Department of State $5.8 million

Department of Labor $5.6 million

The Department of Defense spends more on public relations and advertising than any other federal agency.

Despite the high cost of these efforts, just 32 percent of Americans surveyed expressed “a favorable impression of the federal government,” according to a poll conducted by the Pew Research Center. “Currently, just 19 percent say they can trust the government always or most of the time, among the lowest levels in the past half-century. Only 20 percent would describe government programs as being well-run,” according to the Pew findings. The least popular agencies are the Department of Justice, the Department of Education, the IRS, and the VA, all of which were viewed unfavorably by a majority of those surveyed.

The GAO report was requested by Senate Budget Committee Chairman Mike Enzi who says “with increasing pressures on limited federal resources, it is crucial to know how much is spent across the federal government on public relations activities.”

Federal agencies could improve their public relations at no cost whatsoever by simply conducting themselves efficiently and effectively rather than misspending taxpayer dollars on questionable and unnecessary projects and activities that will inevitably end up in Wastebook.

The Official Wastebook

WASTEBOOK: High Speed Train Going Nowhere Fast

$3.1 billion

California

Federal Railroad Administration

Six years have chugged by since the federal government awarded billions of dollars for California’s high-speed passenger train but not a single track has been laid.

The “bullet train” promised to make the 520 mile trip from San Francisco to the Los Angeles area in less than three hours by traveling over 200 miles per hour.  But the only thing high-speed about this train is how quickly it is chew chewing taxpayer dollars.

With a price tag of nearly $100 billion, this rail system is the single largest public works project currently underway in the U.S.

Already billions of dollars over budget and years behind schedule, the only ones being taken for a ride by the train are taxpayers.

The original plan had a cost of $64 billion with passenger service beginning by 2020.  That amount jumped to $98 billion and the departure time for passengers was delayed an additional 13 years to 2033.

 The initial 118-mile track segment of rail structures was to be completed next year, but this year the Federal Railroad Administration extended the deadline to 2022.  As of May, the rail authority still had fewer than half of the parcels of land needed to construct the segment.

In February, the rail authority redirected the first segment to head north to San Jose rather than south to the San Fernando Valley.  With the new end point in an empty lot near Bakersfield, the train is being ridiculed as “a high-priced train to nowhere.”  The Bakersfield Californian editorialized, “the California High Speed Rail Authority’s new plan to drop southbound passengers at a dusty rural junction 23 miles from Bakersfield is nuttier than a pistachio orchard— which, perhaps appropriately, is what that land was destined to become.”

The federal government is largely to blame for the project getting off track.

Federal funding for the bullet train comes from two separate grants: $2.25 billion from the American Recovery and Reinvestment Act, or stimulus, awarded in January 2010 and another $901 million federal grant provided in October 2010.

A September 30, 2017 deadline was set for spending the stimulus money.  The Obama Administration demanded the first segment of the railroad be built in the Central Valley believing that the less-populated farmland was the most “shovel ready.”

But construction began two years behind schedule because political, legal, logistical, environmental, and financial problems stopped the project in its tracks.  Lawsuits have hindered the acquisition of the 1,400 parcels the state is attempting “to purchase or seize through eminent domain.”

These setbacks “have forced contractors to leave equipment idle, which is likely to result in multimillion-dollar claims of losses,” according to the Los Angeles Times. “Construction experts are projecting the first 29 miles of construction alone could be as much as $400 million over budget.”

As of February, $1.1 billion of the $2.5 billion grant had been spent.  The rail authority “is accelerating its pace after a painfully slow start, with a half dozen construction crews now building overpasses, relocating utilities, and demolishing structures.”  No tracks, however, are being laid yet.

Public and private support for the train is declining, increasing the need for more government support.

The train was sold to voters, who approved a $9.95 billion bond referendum in 2008 to get the project started, with rosy projections and a stipulation that the system would operate without additional public subsidies.

Today, fewer than half of California voters—44 percent—favor building the high-speed rail system, according to a Public Policy Institute of California survey taken in March.

Despite the billions of dollars provided by the federal government, the rail system is struggling to attract capital and is $43.5 billion short.  Private investors have shown little interest in the project.  Financial support from the state has also been lagging, in part because the federal government waived the requirement for the state to make an upfront dollar-for-dollar match.  The unusual agreement allows California to spend federal dollars first before putting up any of its own money.  Money raised from state greenhouse gas fees was expected to bring in $150 million for the project this year, but only provided $2.5 million.

The Spanish construction firm Ferrovial, selected to build the train, cautioned on its winning bid application that “more than likely, the California high speed rail will require large government subsidies for years to come.”  The conclusion was based upon reviews of 111 high-speed train lines around the world.  The rail authority, however, tried to bury its tracks by deleting this warning when the proposal was posted online for the public.204

While the stimulus provided $8 billion to support high speed rail projects in the U.S., California was the only state to get aboard this gravy train.  A similar high speed passenger train that had been planned in Florida never left the station precisely because Governor Rick Scott worried such a train would take taxpayers for a ride. In 2011, he rejected $2.4 billion offered by the federal government for the project, explaining that it “would be far too costly to taxpayers and I believe the risk far outweighs the benefits.”

There is no way to get the bullet train back on track. Unless California derails it altogether, taxpayers in the state and across the country are going to be railroaded for years to come by this train wreck.

The Official Wastebook

WASTEBOOK: Whiskey Rebellion And Tea Party Served With A Twist

$825,000

Georgia, Hawaii, Kansas, Michigan, Minnesota, New Hampshire, New Jersey, and Pennsylvania

U.S. Department of Agriculture and Department of Housing and Urban Development

Taxes on tea and whiskey brewed up two of the most famous rebellions in American history: The Boston Tea Party against the British tea tax levied on American colonists and the Whiskey Rebellion against the excise tax on distilled spirits imposed by the new U.S. federal government.

In an ironic twist, two hundred years later the federal government is now serving up subsidies for tea and whiskey makers.

The U.S. Department of Agriculture (USDA) Value-Added Producer Grants program awarded $390,000 to tea makers and $145,000 to whiskey producers this year. These include:

• $195,400 to Yaupon Tea Company in Georgia to expand the market for tea sales;

• $193,335 to help Mauna Kea Tea in Hawaii to “develop new green tea products and improve marketing”;

• $49,750 to Driftless Spirits in Minnesota “to market and brand organic, kosher grain to glass whiskey”;

• $58,056 to Canterbury Spirits in New Hampshire “to produce and market farmstead distilled spirits (including brandy, gin and whiskey) made from farm grown apples and rye”; and

• $38,000 to Marr Grange in New Jersey to “study the feasibility of establishing an onfarm distillery to process specialty grains, including rye, to create distilled craft whiskey.”

In addition, an ongoing study examining “flavor development in distilled spirits” at Michigan State University is being funded by the USDA National Institute of Food and Agriculture. The project summary points out the “economic potential for artisan distilling is quite high,” specifically noting the product provides “substantial public source of funds through both State and Federal excise taxes and mark-ups.” A study published as a result of this USDA-funded research examines how “to reduce the operating and investment costs of the production of high proof spirits.”

One certain way is to stop charging these projects to the tab of taxpayers.

USDA is not the only federal agency in the whiskey business.

A $100,000 “job creation” Community Development Block Grant (CDBG) from the Department of Housing and Urban Development (HUD) is “financing” the distilling equipment for a new distillery in Norristown, Pennsylvania. Five Saints Distilling and International Spirits LLC, a “grain to glass” distillery in which all of the distilling process is performed on site, opened this summer. Five Saints serves white whiskey, savory gin, vodka, and a blood orange liqueur with plans to add rum, rye whiskey and bourbon to the menu.

A $190,650 HUD grant “awarded under the commercial rehabilitation category of CDBG funding” helped transform the former city hall of Dodge City, Kansas, into a distillery. Boot Hill Distillery, opened the summer of 2016, produces white whiskey as well as vodka and gin with plans to eventually sell bourbon.

This reverse tea party/whiskey rebellion is unnecessary since there is growing consumer demand for both beverages. Sales of American whiskeys is “booming in the U.S. and abroad,” according to the Distilled Spirits Council, which marked “the sixth straight year of increasing market share” in 2015.  Tea is the most popular beverage in the world after water. The wholesale value of tea sold in the U.S. exceeds $10 billion a year, according to the Tea Association of the USA, with the Beverage Marketing Corporation projecting continued market growth for tea over the next five years.

Just as Americans protested taxes on tea and whiskey more than 200 years ago, subsiding the beverages today is still not the taxpayers’ cup of tea.

The Official Wastebook

WASTEBOOK: Drooling Monkeys and the Evolution of Saliva

$817,000

New York

National Institutes of Health

Drool from monkeys, gorillas, orangutans, macaques, and humans was compared in an attempt to gain “insights into evolution of saliva.”

The study was funded, in part, from two National Institutes of Health (NIH) grants totaling $817,000 to the State University of New York at Buffalo (UB).

DNA samples of saliva from the primates were purchased and then analyzed using polymerase chain reaction (PCR).  PCR is a technique that copies and amplifies small segments of DNA to conduct molecular and genetic analyses.

The research specifically focused on the salivary mucin-7 (MUC7) gene, that “tells the body how to create a salivary protein of the same name.”  This protein, “which is long and thin, forms the backbone of a bottlebrush shaped molecule that helps to give spit its slimy, sticky consistency.”

The analysis found the instructions within the MUC7 gene “for building important components of the bottlebrush were repeated multiple times” in each of the five primate species studied.   Gorillas had the fewest copies of this information (4-5), while African green monkeys had the most (11-12). Humans fell somewhere in between, with 5-6.”

The researchers then simulated evolutionary changes in the composition of the saliva gene over 11 million years from a common ancestor.  They assumed “every 1 million year [sic], there is a random gain or loss of 0.5/1.0/1.5/2.0 copies for Orangutan and the common ancestor of Human, Chimpanzee and Gorilla separately. At 8 million years ago, the common ancestor of Human and Chimpanzee separated from Gorilla and they started the copy number gain and loss simulation separately. The same simulation continues to 5 million years ago that Human and Chimpanzee separated from each other, and start their copy number gain/loss process independently until present. We simulated this process 1,000 times for 4 different copy-number-change rates (0.5/1.0/1.5/2.0 copies per million year), and for each simulation, calculated the variation of final state of simulated copy numbers for Human, Chimpanzee, Gorilla and Orangutan. The observed copy number state in present is Human 5 or 6 copies, Chimpanzee 5 copies, Gorilla 4 or 5 copies, and Orangutan 6 or 7 copies.”

So what does that all mean?

“This diversity in humans and other primates is ‘fodder for rapid evolution,’” the scientists write in a study published in Scientific Reports.  It is “unusual for members of a single species to have varying numbers of tandem repeats,” which are “short strings of DNA found multiple times inside the gene.”

The researchers speculate that by “having numerous copies of the repeated instructions likely conferred an evolutionary advantage to primates— possibly by enhancing important traits of saliva such as its lubricity.”

The authors of the study do caution that “gene predictions, especially for genes that have repeat content as in MUC7, may be error prone.”

As sticky as the subject may be, saliva does serve important functions. Other studies— including some conducted at UB— have examined the importance of saliva for human health. While the findings of those efforts may lead to exciting scientific breakthroughs, this particular study is nothing to drool over.

The Official Wastebook

WASTEBOOK: Government Cheese

$21.8 million

Nationwide

U.S. Department of Agriculture

There is more surplus cheese stored in refrigerated warehouses in the U.S. than at any time since the records were first taken 100 years ago, according to the U.S. Department of Agriculture (USDA).  Cheese sales in some parts of the country are “lagging behind production rates, causing stocks to accumulate,” the USDA notes.  As a result, some cheese makers are even “cutting back” on manufacturing to “manage large inventories.”

Despite this growing mountain of cheese, the federal government is subsidizing more companies to get into cheese making and buying the leftover cheese.

At one point, the surplus of cheese and other dairy products held by the government had a market value of $3 billion and was so large it took 500 warehouses and five giant storage caves carved out of limestone to store it all.

This year, approximately 11 million pounds of the surplus cheese valued at $20 million was acquired.  USDA says the move is in response to “requests from Congress” and advocacy groups for the industry.  The Department says the purchase is “assisting the stalled marketplace for dairy producers whose revenues have dropped 35 percent over the past two years.”

Despite these unfavorable conditions, USDA spent $1.8 billion to subsidize 16 new cheese making ventures this year through the Value Added Producer Grant program.

Burnett Dairy Cooperative of Grantsburg, Wisconsin, received the largest slice.  The co-op is spending the $250,000 grant “to help expand the sales of meat infused string cheese.”  Zesty Teriyaki, Hot Pepper Beef and Pepperoni Pizza are among the mozzarella string cheese snacks blended with meats currently offered by Burnett Dairy. The new product, which is string cheese with a beef stick in the center, is being developed with meat snack maker Jack Link’s.  “They came together and decided this was something there was a market for,” says Jeff Hudson, the Business Programs Director for the USDA Rural Development Agency in Stevens Point.  Hudson cautions “the purpose of the grant is not to give out ‘free money.”  That statement has more holes in it than a slice of Swiss cheese.

USDA also paid out more than $11 million in financial assistance to dairy producers enrolled in the Margin Protection Program (MPP) for Dairy.  This was the largest pay out since the program established in 2014 to provides financial assistance “when the margin – the difference between the price of milk and feed costs falls below the coverage level” for dairy producers.

Even some dairy farmers are criticizing the federal government’s cheesy policies. “Farmers are not encouraged to produce less and they feel the only way they can help make ends meet and get all of their bills taken care of at the end of the month is to produce more milk, which in turn ends up hurting them in the end,” laments Darin Von Ruden, a dairy farmer and president of the Wisconsin Farmers Union.

Government cheese really grates on taxpayers.

The Official Wastebook