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Unspent stimulus billions in Texas causing growing unease

Sheet of $100 bills by flickr user yomanimus
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Billions waiting to be spent; some programs not yet off the ground
Wednesday, May 05, 2010, 02:00PM CST
By Mark Lisheron

Burrow deep, down beneath the hundreds of billions spent and the hundreds of thousands of jobs supposedly created, and you can find the numbers that have people close to the federal stimulus, like state Rep. Jim Dunnam, concerned.

Dunnam, a Waco Democrat, is the chairman of the House Select Committee on Federal Economic Stabilization Funding, a fancy title for the public officials who are watching how $20 billion of the $787 billion American Recovery and Reinvestment Act is being spent in Texas. Dunnam has, from its passage in February 2009, been a vocal proponent of the twin goals of the act -- to get money into an ailing economy quickly and to create or retain jobs.

With those goals in mind, Dunnam used a hearing in February, as the stimulus bill reached its first anniversary, to do something quite rare. Rather than point an accusing finger at the federal government, Dunnam bit down hard on the state officials running a $326 million program to weatherize low-income homes, like a dog with a new piece of rawhide, and he wouldn't let go.

At the time, Michael Gerber, head of the Department of Housing and Community Affairs, sat before Dunnam trying to explain why, after many months, the department had spent just $3.7 million to make improvements to 47 homes. On Friday the new and improved numbers were released: $20.4 million spent and 4,074 homes weatherized, an improvement, but leaving more than $300 million left to spend and tens of thousands of homes untouched.

"That money is not getting out the door the way it should," Dunnam said after being given the new totals. "We had better ask for a progress report at our next meeting. It's disappointing to me because, at the beginning, they seemed to be the agency most on the ball."

After Dunnam has had the opportunity to review the new numbers, he will see that the Department of Housing and Community Affairs is by no means alone in facing the daunting task of spending huge sums of federal money. Dozens of state agencies and institutions of higher learning have yet to either receive or to spend any of the stimulus money they have been promised.

It is at this level, the program level, where the problems with the stimulus in Texas have revealed themselves. On the surface, according to the national figures compiled by the Recovery Accountability and Transparency Board and the state figures kept by the comptroller, overall spending appears to be where it should at the halfway point of the two-year stimulus plan.

Nationally, $321.4 billion in stimulus money out of a total of $787 billion has been spent through the end of March, the most recent reporting period, according to the website Recovery.gov. Texas has spent close to half of the $22.8 billion it was allocated, according to R.J. DeSilva, a spokesman for the comptroller.

Both the national and state totals, however, are buoyed by billions in entitlement and tax relief payments that were made in lump sums at the passage of the recovery act. In question are the programs like the Weatherization Assistance Programs across the country, which are part of $275 billion in stimulus for contracts, grants and loans for programs and projects that were supposed to do the heavy lifting of job creation. Just $97.4 billion or a little more than 35 percent of that money has gone out the federal door.

The states, however, are reporting that they have spent $61.6 billion, a nearly $36 billion gap between what the government says it sent out, leaving nearly $215 billion to spend, according to the new Recovery.gov figures.

Texas is doing far worse in the contracts category than the national average, having spent $2.9 billion out of $13.2 billion. The percentage of spending is worse than only New York among the top five recipients of contract funding through stimulus. California, the top recipient with $22.2 billion has so far spent $8.8 billion or 39.6 percent of the total.

There are some success stories so far. The Texas Department of Transportation, a department used to dealing with a multi-billion-dollar budget, is on track to receive and to spend the $2.3 billion in allotted stimulus, spokesman Chris Lippincott said. Lower labor and raw materials costs in this economy will allow the department to do perhaps hundreds of millions of dollars more in highway projects with the money it was given, Lippincott said.

Still, Lippincott said the money coming back to Texas to pay for those projects is slowed by the insistence of the federal and state governments on accountable reporting of every dollar spent. "The reality is, the pipeline is moving as fast as it can," he said. "Certainly, there has been more attention given to these funds on the federal and state levels."

For many departments, the pipeline is dry or very nearly dry. Of the 3,948 stimulus-funded projects the state of Texas reported to Recovery.gov through March, 629 or 16 percent had not yet been started and 1,823 or 46.2 percent were less than half completed. Just 757 or 19.2 percent of the projects have been completed.

Spending, large and small, is in tremendous flux. According to the comptroller's figures, updated last week, the Texas Education Agency is supposed to have received $4.8 billion. So far, it has received $1.42 billion. The University of Texas has received about $12 million of the $68 million it is supposed to receive, and is waiting on tens of millions more for more than a dozen other public state universities and schools. The state Railroad Commission, which oversees energy issues, won $12.6 million to award grants for 882 vehicles, 245 of them new propane-fueled school buses, for 40 school districts and state agencies. Not a penny of that $12.6 million has moved.

And while the money isn't being spent the controversial matter of translating that spending into jobs becomes even murkier. Texas is reporting that stimulus spending has resulted in 43,481 jobs created or retained through March 31, according to Recovery.gov. However, 29,884 or almost 70 percent of those jobs were reported for a single ZIP code - 78701 - Austin. Four of the top five and five of the top 10 ZIP codes, almost 35,000 jobs' worth, were in Austin. Houston, by contrast, made the top 10 once, with 282 jobs.

Michael Morrissey, Gov. Rick Perry's budget director and stimulus chief, who has been sharply critical of the accuracy of the Recovery.gov reporting, disavows the job numbers his own office is required to submit each quarter.

"Because of the way states are required to calculate jobs under ARRA reporting guidelines, it is impossible to tell how many jobs were 'created or retained' by the Recovery Act," Morrissey said. "The federal ARRA jobs calculation merely asks states to report jobs based on how much ARRA money was spent on salaries in a particular quarter. In this calculation, there is no consideration of whether the ARRA jobs reported were actually 'created or retained,' by ARRA. Further, cumulative ARRA jobs data is not required to be calculated or reported by ARRA recipients."  

Most agency officials have been very cautious not to give the appearance of worrying that the money won't come or won't be spent. Because they have faced criticism of their own, officials for the Department of Housing and Community Affairs have said new and tight federal regulations, paperwork and ramping up for a windfall unlike any they had seen before resulted in a paltry amount spent and a tiny number of homes weatherized.

Brooke Boston, deputy executive director for weatherization, said she believes the worst is behind the program. Boston said crews are on target to easily surpass the 4,074 homes weatherized in the quarter than ended March 31. Boston and Gerber have continued to promise the department will spend all $326 million by the March 2011 deadline.

Having the advantage of seeing the new numbers, officials in the comptroller's office were not so certain. DeSilva said it will probably take another "interesting" reporting quarter before people begin to question whether Housing and Community Affairs or any of the dozens of lagging agencies can keep their promise to the federal government.

"We took the Weatherization people to task at the last meeting. We wore them out," Dunnam said. "From my perspective, what we've got to see at the next meeting is some progress. There has to be a balance between doing it wisely and going ahead and spending the money."

 


Picture of sheet of $100 bills by flickr user yomanimus, used via the Creative Commons license.

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