No, seriously, why do they? It's not like the construction workers don't get paid their wages if they aren't given such projects, and, unless you are buying the resources from overseas, the only cost for the construction materials for the state is wages/salaries of the workers who are involved in the relevant processes.
Am I being swindled?
Idk how the USSR or it's republics did accounting, but even under socialist conditions it would be conceivably helpful to account for building construction on a per unit basis because it lets city planners evaluate the relative value of labor and resources being put into a building.
For example if you have two sites where you can build the same apartment block but one is flat ground and another is hilly or marshy ground, then it makes sense to calculate the amount of labor, additional resources, and specialized equipment you would need to level the slope or build extra foundations on the swamp.
Lots of companies and organizations also carry out internal accounting where they invisibly pretend to pay themselves and their own divisions for work because it allows management to see where money is being used and how much.
However, why make all of the relevant actions cost money?
Probably because it's a gameplay abstraction? The alternatives are to either have a full supply chain of all things your people need to live and pay them with goods, which would be really complex and not very historical, OR you hire workers and pay them even if they're sitting around but then many players see that as a sort of timer and source of unpleasant stress.
Money is just a convenient abstraction for allocated resources in either case.
Unless we are dealing with a city-state, a part of that supply chain can be situated in other cities/areas of the country. Apparently, though, we are dealing with a city-state (with no prior city), according to the responses that I am getting.
Except no (as in, not generally)? The workers get paid regardless of whether or not they are assigned on projects, and they use the money to buy goods and services from the state. What is the significance of paying them specifically with goods in this context?
Yes, you basically play as a city state. The whole premise of the game is that you are developing an independent 24x24 km square republic with no modern industry. Maybe that's not realistic, but neither are a bunch of other things in the game.