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I-Team: State Taking Money Back From Earmarked Projects

BOSTON (CBS) - For months, drivers have been maneuvering around the traffic barrels that have blocked off a main route through East Milton Square.

An inconvenience for sure, but according to the owner of one local business, it's the first step in a desperately needed redesign of the square.

"We want to improve parking for customer convenience and of course to hopefully create some jobs," explained Paul Maduri, owner of Fitness Unlimited.

Everything was all set; the government promised nearly $1 million for the project years ago, an earmark is what they call it. But now that money is gone, taken by the state and spent somewhere else. Milton's city planner was stunned when he got the news. "[I] ran to the selectman's office to drop them bomb,' Bill Clark said.

Secretary of Transportation, Richard Davey, is making no apologies.

"Behind this desk, we had to make a call. We were not going to lose those funds back to Washington," he said.

The state also took back $1.5 million promised to Marlborough for a road construction project. The City of Boston also lost $1.5 million for the Rutherford Ave project.

"This is unprecedented. I've never seen it happen this way," said Congressman Mike Capuano who fought for the federal dollars for the Rutherford Ave project.

To say that he is unhappy is an understatement.

"The next time they want to work with more or the City of Boston on something, not that I won't do it, it's just that I will do it probably with one eye kind of watching them to make sure they don't use the money for some other purpose," he said.

In total, the state took back 13 million dollars for earmarked projects. The order came from the White House. President Obama wanted the money spent by the end of the year in order to create construction jobs. Those projects were moving too slowly, according to Davey. "We took those dollars from these three projects and gave them to projects we knew could be done by the end of the year," he said.

But all that money didn't necessarily create local construction jobs. The entire $13 Million went to the Regional Transit Authority. Half of the money was spent on buses nowhere near Capuano's district.

According to Davey, time was a critical issue. "This again was about teeing up projects that were ready to go, that were 'shovel ready'", he said.

Capuano doesn't get it. He says there are no shovels in the ground or jobs created in buying buses that aren't even made in Massachusetts. "The City of Boston today has shovels in the ground at some place in the city. That's where the money was intended and that's where the money should have gone," He said.

The bottom line: these communities are out their money. Capuano is confident Boston will find the money for Rutherford Ave. The Marlborough project is dead. And if the people of Milton want a new square, they may have to pay for it themselves.

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