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Wednesday, Feb. 18, 2009

How the Stimulus Funds Will Aid the State

About 70,000 jobs will be saved or created in Wisconsin

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With the approval of the $789 billion American Recovery and Reinvestment Act, President Barack Obama delivered on his promise to stabilize the sagging economy he inherited from ex-President George Bush through increased investment in domestic projects and programs.

The White House estimates that the funds will create or save 3.5 million jobs in the next two years nationwide. Gov. Jim Doyle estimated that Wisconsin would receive about $3.5 billion from Washington, and the resulting programs would save or create 70,000 jobs in the state.

Linda Barth, spokeswoman for the state Office of Recovery and Reinvestment, which was established to manage the funds, said that the federal government has specified to some degree how the money will be spent in the states. “There’s a misperception that this is going to be a huge open checkbook that’s going to land on Wisconsin and we can spend it any way we want,” Barth said. “Actually, the funding flows through a lot of current programs set up with current formulas.”

She gave as examples money for education, which will be disbursed according to the current school aid formula, and funds for Medicaid, transportation projects and clean water projects, which will flow through as they always have. “There’s not a lot of discretionary spending for the state to take on a huge building project or anything,” Barth said. “It’s really, really targeted to current existing programs and will, as far as we can tell, come in through current streams.”

Even the Stimulus Opponents Would Benefit

Those spending targets would seem to put the kibosh on Milwaukee County Executive Scott Walker’s desire to “put these funds directly into the economy,” as he put it in his State of the County address on Monday. Walker proposed to suspend the county sales tax, rebate the county property tax bill for 2009 and create other funds for job-creation projects instead of utilizing the federal funds as President Obama has indicated.

In a highly criticized move, Walker refused to submit a wish list of projects to the state for the stimulus funds because he doesn’t believe that increased government investment leads to more jobs during a recession. However, Milwaukee County Board Chairman Lee Holloway submitted a list of projects totaling $512 million to the state so that the county would not fall behind the rest of the state and country.

Likewise, all Wisconsin residents will receive some benefits, even if their representatives in Washington voted against the stimulus package. All of the state’s Republican congressmen opposed the bill in the House of Representatives. Yet, according to figures released by the White House, about 8,900 jobs will be saved or created in Paul Ryan’s district, which has been hit hard by GM layoffs; 8,800 jobs will be saved in Jim Sensenbrenner’s suburban Milwaukee district, and 8,700 jobs will be saved in Tom Petri’s Fox Valley district.

Getting the Money Out Onto the Streets

Barth said that the Office of Recovery and Reinvestment would exist for about six months before the relevant state agencies take over. Barth said that about 20 staffers are still dissecting the final piece of legislation to understand how the money will come into the state and how to get the money out onto the streets. But that’s only half of the stimulus equation.

“We also have people working with all of the groups out there that we need to connect with, the local governments and labor, to make sure that when these projects go out we have workers who are ready to do it, and technical colleges to see if we need to have some quick start-up training people,” Barth said. “It’s just marshalling the forces and making sure that we’re ready when the stimulus money is here.”

She said that the Obama administration has placed strict accountability and transparency regulations on the funds, and the state will have to report back to Washington every 30 days on the use of the funds and the progress of the programs.

Transportation and Energy Programs Will Benefit

Although the White House has placed strict guidelines on how the money will be used, Barth said that private companies would most likely benefit from increased funding of transportation and energy programs. The state office is taking applications at its Web site (www.recovery.wisconsin.gov) and will assist people in applying for funds.

The program will invest $78.6 billion nationally in “green” projects to boost energy efficiency in federal buildings, funding the Green Jobs Act to train workers in energy-related jobs, investing $3.2 billion in local energy projects and boosting public transit and high-speed rail.

Barth said that there are funding opportunities for local programs that boost energy efficiency. “Perhaps if there’s a building project that doesn’t get funded through infrastructure money, it may qualify for some energy-efficiency money,” Barth said.

She added that the projects have a quick turnaround time, which is why Doyle and state leaders submitted a list of about 300 transportation projects to the state Legislature for pre-approval. Those projects are already in the pipeline but could be bumped up because of the additional funds.

“Those projects can’t move forward until the Legislature approves them,” Barth said. “When the stimulus money gets here we can get the projects started and get the money to communities right away.”

The list of Fiscal Year 2009 “advanceable projects” includes more than $297 million of transportation projects, none of which are located in Milwaukee County. I-94 projects in Racine and Kenosha counties made the list.

Although the funds are coming from the federal government, Barth said that private companies would be the primary beneficiaries. “The goal of the stimulus package is to get money into the private sector, which would be the road-building companies and construction companies, to start getting the economy moving again,” Barth said.

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