in Houston, Texas

Million-dollar jobs on the taxpayers' dime: Federal stimulus funds 38,000 jobs in Texas, but some cost more than $1 million apiece

Tuesday, Nov 16, 2010, 05:54PM CST
By Mark Lisheron
gold bar

You might call it the Federal Stimulus' Million Dollar Jobs Club, except that in several instances you have millions of dollars, but no jobs.

There is the $4.4 million job through the block grant at the Texas Department of Rural Affairs. Or the $2.2 million job for the upkeep of National Guard property. The Attorney General's Internet Crimes Against Children Task Force has a half-dozen $1.4 million jobs. And then there are the $23.1 million grants at the Texas Departments of Agriculture and Aging and Disability Services that produced no jobs at all.

These jobs or lack of them were the result of the $787 billion American Recovery and Reinvestment Act, passed by Congress with two goals in mind, to jolt the economy to life with rapid taxpayer spending and to create or preserve jobs.

On the second count at least, the stimulus appears to have fallen pitifully short of its goals at a substantial expense, the data compiled and kept by the state comptroller suggest. Agencies and institutions of higher education in Texas have reported spending a little less than $5 billion of stimulus money and have created 38,160 jobs, or about $130,000 a job.

UT Arlington economist Roger Meiners, who has tracked stimulus spending closely, says there is no way that jobs being added to or hired by existing agencies should cost so much to create. Unaware that large stimulus sums were spent without creating any jobs until shown the figures, Meiners says that job creation was clearly secondary to spending a lot of money.

"I had a vague suspicion that was the case, but now that I look at it, the spending is completely preposterous," Meiners says. "These aren't jobs being created from scratch, they are jobs added on the margins. What the heck are they doing with all the spending? I have no idea."

At the time the stimulus bill passed in February 2009, unemployment was 8.1 percent, the highest rate in 25 years. After peaking at about 10 percent before the end of 2009, the rate has stayed at about the current 9.6 percent for the entire year, in spite of the stimulus spending.

A closer look at spending by each agency shows wild differences in the amount of money spent and the number of jobs created. At least eight agencies have reported spending $500,000 or more for every job claimed. In the case of the Texas State Library and Archives Commission, its $883,993 per job is an estimate because more than a year after it was awarded nearly $8 million for a statewide library broadband upgrade project, nothing has been spent and none of its projected nine employees have been hired.

Perhaps most significant as the legislature convenes in January to deal with an estimated $25 billion budget shortfall, at least three-fourths of the jobs and most likely many more created by the stimulus are in the public sector, including more than 27,000 jobs in public education that must disappear when stimulus funding runs out or be subsidized by new infusions of federal or state taxpayer funds.

Roger MeinersMEINERS

Meiners calls the stimulus as a job creation program a disaster. He has challenged the claims made as recently as this summer by the White House Council of Economic Advisers projecting the stimulus will reach its goal of creating or retaining 3.5 million American jobs. The chasm between the estimates and the reported numbers as well as a full year of 9.5 percent unemployment put the lie to the guesswork, Meiners says.

"The stimulus has been a disaster. It didn't work, but that is not a surprise," Meiners says. "These job creation numbers are nonsense, but politicians routinely abuse numbers to try to create the illusion that things are better than they are."

The hard numbers have never met expectations.

Among the 3.5 million jobs the White House predicted the spending would create, 269,000 of them were supposed to come to Texans. To date, the 50 states have reported 671,067 jobs created,Recovery.gov and the state comptroller. State estimates for jobs created when all of the stimulus money has been spent in the state have varied from 49,000 to as many as 56,000 jobs, more than 210,000 jobs fewer than first projected.

Even the quarterly estimates of jobs created kept by Recovery.gov have prompted confusion and derision. In the quarter ending in June, states reported a total of 750,045 jobs created, the high point since the passage of the stimulus and nearly 80,000 more than the current figure. Nowhere on the site is an explanation for why so many stimulus jobs disappeared in a single three-month period, what kind of jobs they were or where they had been created. When he was unable to explain it, Recovery.gov spokesman Edward Pound in Washington referred Texas Watchdog to a spokesman at the White House who did not return a call requesting comment.

The quarterly reporting requirement makes it impossible for the average person to learn how many jobs their stimulus tax dollars are paying for, said Kara Belew, a budget specialist who helps oversee the stimulus in Gov. Rick Perry's office. Mike Morrissey, the governor's budget director, has repeatedly been critical of the changes in the guidelines made by the Office of Management and Budget that encourage state agencies to tote up hours worked and count them as jobs even if the jobs were done by people already employed.

"Jobs reported on Recovery.gov are not accurate, are not cumulative, are not comparable over time and do not represent created or retained jobs," Belew says. "You can't answer the basic question about jobs created because Recovery.gov does not count jobs cumulatively."

stimulus chart

COSTLY STIMULUS JOBS IN HIGHER ED; MOST JOBS IN PUBLIC SECTOR

The most requirement-laden spending bill in history included no requirement that a certain number of jobs be created for a specific amount spent. A close examination of spending reported by the agencies and universities in Texas shows that many grants were made based on overall need rather than keeping people in the workforce.

This is particularly true in the stimulus grants awarded to schools of higher learning and university medical centers for research, eight of which created one job or less for the money they spent. The University of Texas' M.D. Anderson Cancer Center in Houston received 92 grants valued at more than $60 million. The center has spent $19.9 million of that total, more than $1 million apiece for the 19.85 jobs it claims.

The Texas State Technical College System has spent nearly $1 million for each of the four jobs created for conservation research. Texas A&M University-Corpus Christi has spent $554,463 and has so far produced less than half a job job. Almost all the money has been spent on equipment, not people, university spokesman Marshall Collins, says. "The bottom line is that equipment grants do not generate jobs immediately."

Without an accounting agency by agency, it is impossible to say exactly how many stimulus jobs employ people in the private sector. The two biggest employers of private contract workers, the Texas Department of Transportation, claiming 3,611 roadwork  jobs, and the Department of Housing and Community Affairs, with 943 jobs to make low-income homes energy efficient, credit the Recovery Act with keeping workers from being laid off.

The Department of Transportation, however, has no way of calculating the number of stimulus jobs because there is no such thing as a strictly stimulus road project, just a blending of several federal funding sources, DOT spokesman Chris Lippincott says.

"I can tell you we've heard from contractors who say they're happy the stimulus came along -- otherwise they'd be laying off people," Lippincott says. "What happens when the stimulus is gone, I don't know."

Beyond the question of the value of the stimulus as a jobs engine, there is Lippincott's question of what is going to happen to the jobs when the ARRA funding runs out. The Texas Workforce Commission provides what may be a preview.

The commission reports it has spent roughly $272 million of its more than $418 million in stimulus grants and created 382 jobs, or $711,000 a job. That jobs figure, however, no longer includes the 20,000 young adults hired for temporary jobs in the summers of 2009 and 2010.

The summer jobs plan was never intended to and did not have the funding to put people to work permanently, although the Workforce Commission counted the hours worked as 5,000 full-time employees until the money ran out, Ann Hatchitt, director of communications for the Workforce Commission, said.

Among the employees remaining on the Workforce Commission's payroll are 325 employment services specialists, people Hatchitt says have been trained to help other people find and keep a job. She also does not know what will happen to these new state workers when the money runs out.

Nor can anyone explain what is to be done at the Texas Education Agency, where grants totaling $5.5 billion, $2.5 billion of it spent, are so far responsible for the employment of 27,161 teachers, counselors, librarians, tutors and support staff across the state. Suzanne Marchman, a spokeswoman for the agency, says there have been no contingency plans for the new hires.

"As for what will happen to the employees when the funds go away, there's just really no way to know at this point," Marchman says. "For the (full-time employees), it may depend on what comes out of this upcoming legislative session on funding issues."

Texas Watchdog tried to pose that question to Rep. Rob Eissler, R-The Woodlands, chairman of the House Public Education Committee, and Rep. Scott Hochberg, D-Houston, chairman of the education subcommittee of the House Appropriations Committee. Eissler did not return the message left at his office. 
Hochberg sent a message by Blackberry saying he was unavailable.

Contact Mark Lisheron at 512-891-8303 or mark@texaswatchdog.org.

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Photo of gold bar and coins by flickr user BullionVault, used via a Creative Commons license. Photo of Roger Meiners from UT Arlington website.

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