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Stimulus benefits in state unclear

Officials: Created jobs, but still woes by Michael R. Wickline | June 19, 2011 at 5:29 a.m.

— About $2.5 billion of $3.3 billion awarded to Arkansas through the federal stimulus program has been spent, and leading state officials say it’s helped but hasn’t fixed the state’s economy.

Officially named the American Recovery and Reinvestment Act, the stimulus was a package of $787 billion in tax cuts and spending increases aimed at reviving the nation’s economy and saving and creating jobs.

Rejected by most Republicans in Congress, the legislation was passed less than one month into Democrat Barack Obama’s presidency amid a severe recession that began under his Republican predecessor.

Following a formula prescribed by the federal government, the state has issued reports specifying how many full-time-equivalent jobs were created or saved through stimulus spending per quarter.

Quarterly stimulus spending in Arkansas has ranged from $377 million to $214 million.

The jobs figures from stimulus spending range from a quarterly high of 4,805.58 to a low of 1,671.49.

Spending per job ranged from $190,249 to $56,180, but state officials say a lot of stimulus spending was for ongoing programs, like Medicaid and unemployment insurance, rather than creating jobs.

Spending in the first reported quarter, ending Sept. 30, 2009, was $558 million, but also included funds from that spring and used a different method of job calculation, so can’t be used for comparison.

According to the state Department of Workforce Services, the state’s unemployment rate was 6.8 percent in February 2009 when the stimulus measure became law. The state’s rate was 7.8 percent last month.

In February 2009, the state had 1,272,600 employed people and 93,600 unemployed, said Kim Friedman, a spokesman for the department. Last month, the state had 15,100 fewer employed than in February 2009 and 13,300 more unemployed than when the stimulus legislation became law, she said.

THE SPENDING

According to the state’s website at recovery.arkansas.gov, the state has spent:

About $749 million of $1.008 billion awarded to health and human-service programs, including Medicaid. The increased funding for Medicaid has been about $700 million, said Amy Webb, a spokesman for the state Department of Human Services.

About $779 million of $836 million awarded for labor programs, including $753 million of $803 million awarded for unemployment-insurance benefits.

About $509 million of $740 million awarded for education programs.

About $224 million of $364 million awarded for highway programs.

About $109 million of $131 million awarded for housing and community development.

About $45 million of $103 million awarded for energy and weatherization programs.

RATING THE EFFECT

Gov. Mike Beebe, a Democrat, said he’s “not sure” how much difference the stimulus money made in the state’s economy.

“It helped some people,” he said.

He said some road contractors have told him that it “kept their business alive during the darkest time, during the worst economic times for construction.”

“To the extent that there are Arkansas companies keeping people employed, asphalt overlays or road construction, there is anecdotal evidence that that really helped,” the governor said.

The stimulus in Arkansas “hasn’t stimulated the economy, that is for sure,” said Sen. Gilbert Baker, R-Conway, cochairman of the Legislature’s Budget Committee. “But it did give Arkansas some relief on the Medicaid front.”

Rep. Linda Tyler, D-Conway, said she hasn’t made “any firm conclusion” about thestimulus funds in Arkansas.

“Our schools have benefited from it, and a lot of our infrastructure has benefited on it,” she said. “My general feel is we have benefited from it as a state but I feel like we have toevaluate it more closely.”

Beebe said he would give the state an excellent grade for managing the funds.

“First of all, you got to separate what we had control over versus what was ordered,” he said. “There are a lot of aspects of that stimulus I would have done differently, and I didn’t like the way they did it, but we didn’t have a choice. For example, I’d have built even more highways.”

PUBLIC COMMENTS

The stimulus legislation has been a major topic of contention and the state’s website has received about 450 questions and comments about it.

“It seems to me that the Obama administration is already trying to do more than the Bush administration and other administrations have already done,” one man wrote in an e-mail in March 2009.

A woman wrote an e-mail in April 2009 wondering why so much of the funding was for “Medicaid/Human Services.”

“I know these are two of the highest demands on state budgets, but these areas do not create jobs or add to the economy (other than the need to hire low-income staff to sustain programs),” according to the e-mail. “As a taxpayer, I don’t see the benefit of these particular funds to be spent in this area.”

Jeanette Krohn, program manager in the Office of Intergovernmental Services in the Department of Finance and Administration, replied that it was passed by Congress to stimulate the economy, the state was “merely administering” the portion that was allocated to itand that the complainer “may want to contact your U.S. senator or representative.”

DEADLINES AND OVERSIGHT

Ann Purvis, administrator of the Office of Intergovernmental Services for the finance department, said the deadlines for spending stimulus money vary by program. Some allow an extension of time to spend it. A grant program primarily awarding money to law enforcement has the latest deadline that she knows about, and that’s Feb. 28, 2013, she said.

Beebe said he doubted the state would have any leftover unspent stimulus funds.

State lawmakers are going to step up their oversight of the spending. The Legislative Council last month voted to resurrect its oversight subcommittee on stimulus money. It’s to meet July 14.

Front Section, Pages 1 on 06/19/2011

Print Headline: Stimulus benefits in state unclear

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