State transportation officials are confident that a provision of the federal stimulus act that requires transportation spending to focus on economically distressed areas won't prevent Arizona's three biggest population centers from qualifying for hundreds of millions of dollars in highway funds.

Arizona is eligible for about $522 million in transportation money under the American Recovery and Reinvestment Act (ARRA), $350 million of which goes directly to the state for use on highway repairs and upgrades. Stimulus-funded projects are expected to provide work for about 35,000 people.

But the ARRA stipulates that one of the criteria states must consider when allocating the funds is whether a county qualifies as an economically distressed area, or EDA. Under the definition of EDA that is included in the stimulus act, 12 of Arizona's 15 counties qualify as economically distressed. But the three that don't are Maricopa, Pima and Coconino counties, which together are home to more than 80 percent of the state's population.

The federal government isn't using the EDA requirement as a make-or-break factor in determining whether to approve states' transportation project proposals. But at a recent meeting of the state Transportation Board, the board and Arizona Department of Transportation officials said the language in the act is unclear, and expressed concern that proposed projects in those three counties, which account for more than half of the $350 million, could be rejected because the federal government does not consider them to be economically distressed.

"We're going to have to work out exactly what those criteria are," ADOT Director John Halikowski said at the board meeting, echoing the concerns of numerous other state and county-level officials. "I'm not sure that we're going to get any more guidance from the federal government."

In order to qualify as an EDA under the federal definition, a county must have per-capita income that is 80 percent or less of the national average, and must have an unemployment rate at least 1 percent higher than the U.S. average. None of Arizona's three most populous counties meet those criteria.

But the Federal Highway Works Administration (FHWA), which is overseeing the implementation of federal transportation funds under the stimulus plan, said the EDA requirement isn't necessary for a project to receive federal approval. And ADOT officials said the three counties in question may qualify under more recent economic data than that used by the federal government, and it's possible the counties would qualify as EDAs under other criteria.

According to ADOT, the U.S. Department of Commerce has determined that an area that has experienced, or is about to experience, special needs due to recent economic problems could qualify as an EDA. ADOT said the data used by the federal government is two years out of date and did not take into account recent or expected problems arising from the high numbers of foreclosures and job losses in Maricopa, Pima and Coconino counties.

ADOT has identified nearly two-dozen communities within the three counties that qualify as EDAs because of high poverty and unemployment rates, the agency said.

"The updated data reinforces confidence by both FHWA and ADOT that all shovel-ready projects meet the eligible criteria for economic recovery funding. This includes projects in Maricopa, Pima and Coconino counties," ADOT spokeswoman Laura Douglas wrote in an e-mail to the ~Arizona Capitol Times~. "All of our projects are located in economically distressed areas throughout the state."

FHWA spokesman Doug Hecox said the ARRA doesn't require an area to be a federally designated EDA in order to qualify for stimulus money – but it certainly helps. Hecox said the language of the stimulus bill requires states to give priority consideration to economically distressed areas when apportioning the highway funds, but that stimulus money will still be available to areas that don't qualify as EDAs.

The requirement essentially gives the FHWA oversight over the projects, so the agency has the option of rejecting proposals if it believes a state is ignoring EDAs in favor of more economically robust population centers. Those population centers often get the lion's share of federal highway funds while rural areas are sometimes overlooked due to their smaller populations and lower traffic levels, Hecox said.

Focusing on the more heavily trafficked population centers is not necessarily a bad thing, Hecox said, but if rural areas run the risk of falling behind if they are overlooked.

"States, over the past decades … have largely been investing in the areas with the highest amounts of traffic. It's not wrong. That's a perfectly sensible approach, and it's a very common one," Hecox said. "But that's the whole point of the ARRA is to address some of these outlying areas that simply have been overlooked for too long."

Hecox said the FHWA would not necessarily reject a project just because it is in a non-EDA, such as Maricopa or Pima counties. But the agency wants states to show that they have considered localized economic conditions when allocating the funds.

"There's some general guidelines, but it's the sort of thing where the federal government has had a history of trying, at least recently, to not micromanage state decisions," Hecox said. "We like the states to tell us what their priorities are, and we like to try to empower them and give them the resources they need, because ultimately they know their road systems better than we do.

"There are some rules on what is not admissible. … They're fairly broad, and that's sort of in the spirit of making sure that states have the freedom to make good decisions on their own."

Yuma Mayor Larry Nelson, for one, is hoping that more of the stimulus money is directed toward economically distressed areas such as Yuma County. At the Transportation Board meeting, Nelson said he was disappointed that only one project had been approved for Yuma, despite having an unemployment rate of about 20 percent.

A widening project on U.S. Highway 95/16^th Street is the only highway project in Yuma County slated to receive stimulus money. The list approved by the board included $11.5 million for the project, though Nelson said it is expected to cost nearly $20 million.

Nelson said state transportation officials should have been more cognizant of Yuma's need for economic stimulus when allocating the federal money, and said that a highway widening project such as the U.S. 95 proposal would employ significantly more people than road resurfacing projects that were approved for Maricopa and Pima counties.

"I don't think the state is doing due diligence," Nelson said. "If you look at the majority of those projects … a huge number of them are resurfacing. How many jobs does resurfacing create versus a street widening or roadway extension?

"Sounds to me like they want to do ADOT's ongoing maintenance work with it, instead of applying it to what it was for, and that's stimulus, put people to work. And I think that ought to be the litmus test – is it putting people to work and how many people are going to work?"

At the time it approved the list, the board said it would consider revisions during its March 13 meeting. Nelson said he expected Yuma to end up with more funding than had previously been approved. If that does not happen, however, he said he might request federal intervention.

"I think we're going to suggest to them that they need to look at it," Nelson said. "I'm there to protect my citizens, and if I think they're getting wronged, I'm going to say something."

Under a 10-year-old formula called the Casa Grande Resolves, 37 percent of the funding w
ill be spent in Maricopa County, while 13 percent will go to Pima County. The other 50 percent will be divided between Arizona's other 13 counties.

Gov. Jan Brewer will likely be briefed on the proposals in the week after the board's March 13 meeting, at which point she may provide additional input on the projects, according to Brewer spokesman Paul Senseman. Brewer must approve the final list, and Senseman said the governor is taking the EDA criteria into consideration.

"It's definitely a concern. In fact, she'd been traveling to some of the other counties this week. But yes, those will receive their due concern, no question," Senseman said.