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How Much of Stimi Can We See So Far? By Mike Thompson In Review’s last edition, we promised our best effort to help readers “see Stimi.” In other words, our mission is to try to track down the federal economic stimulus money approved in February, regarded by many as OUR bailout. So, let’s get right down to business with our first Stimi sighting. Despite the complaints of Republicans, $252 billion of the package is devoted to tax cuts. If you are fortunate enough to still have a regular job, and if your company’s comptroller is on the ball, you recently should have seen your payroll deduction reduced by a teeny-teeny little bit. A teeny Stimi, maybe just two or three bucks more in your paycheck. Problem is, if you are among the growing legions reduced to part-time job status, you may not have noticed at all. One week you get 25 hours, the next week 18, the next week 21. You no longer are accustomed to a fixed weekly rate of pay, so how would you identify any Diffi in your Stimi? The limit on this tax break is $400 per year for an individual and $800 for a married couple, and most folks will get far less, but still it’s a move toward President Obama’s push for a trickle-up tax policy, after so many years of trickle-down. Why aren’t you getting more of a tax break? Many aspects are geared toward special purposes, such as up to a $2,500 tax credit for sending your kid to college. A somewhat bitter irony is that the nation is so deep in debt, that the only way to issue a tax break is to borrow even more money. That means we have to pay interest (sooner or later) even on a tax break, which means the $252 billion in tax cuts will require an interest payment of about $125 billion. That sort of stymies the Stimi, doesn’t it? The Stimulus Spending Maze The remaining two-thirds of the stimulus package is supposed to be the sexy sort of stimulus that “jump starts” the laggard economy. This sum comes to $535 billion, although when you again add the interest on debt, the long-term spending cost soars to the $800 billion range. Have we seen Stimi here on the spending side? Well, yes, starting with aid to those most in need. Unemployment benefits not only have been extended in duration, but increased by $25 per week. Food stamp allocations are higher. These items do not consume such a large stimulus share as critics imagine, but they do come at a cost. There also is a lot of job preservation taking place in Stimi’s name. You may notice that the Obama Administration speaks of 3.5 million jobs “created or saved,” but the president and his teammates do not break down the number created versus the number saved. Most of the news we’ve seen and heard so far is on the “saved” side. School districts are avoiding teacher layoffs. Cities and townships and villages are using stimulus resources to keep police officers and firefighters on duty. Anyone with compassion is pleased to see people keep their jobs, but when the stimulus money runs out, the hour of doom still may arrive. We also will see Stimi at work in such basic allocations as $89,000 to the Saginaw United Way for emergency food and shelter, to be funneled through trusted groups such as The Salvation Army that often run out of funds. The Mid-Michigan Community Action Agency is getting $137,000 for a similar purpose to serve Bay, Midland, Clare, Gladwin, Osceola, and Mecosta counties. Much of Stimi Still Unseen We have just demonstrated, in the above paragraphs, that some of Stimi indeed already is visible. This does not mean we have uncovered any great revelations. Much remains to be revealed. Saginaw County Controller Marc McGill provided a nice boost when he referred us to the website, www.michigan.gov/recovery. On the home page at the bottom of the box on the left, click “interactive county map.” Then click on any of Michigan’s 83 counties, Monroe all the way up to Keweenaw, and you will see stimulus spending commitments to date. At that point, you may opt to agree or disagree with each particular line item. These numbers are evolving day by day. Four full months have passed since Congress passed the economic stimulus package in a rushed and highly partisan manner, as Rep. Dave Camp noted at the time on Review’s pages. Still, it’s unfair to say that we already should see all of Stimi. The government, for example, should not be expected to instantly create a ton of green environmental jobs. Some actions do take time. One predominant dollar item revealed at the local level is for weatherization of homes. The Saginaw County Community Action Committee (CAC) is in line for $5.4 million to insulate 793 homes, while the aforementioned Mid-Michigan Community Action Agency will get $7.5 million for 1,100 properties. An interesting note here is that a family can earn up to 200 percent of the poverty level and still qualify. That’s about $45,000 for a family of four. Obviously, there are a huge number of families in this region who would meet the guidelines, far in excess of the money allotted. Will it boil down to first come, first served? Local housing commissions, who don’t sport the best of track records, also are in line for funds. That’s $1.24 million for the Saginaw Housing Commission, $1.09 million for the Bay City Housing Commission. Other line items also could be controversial. The City of Saginaw is getting $400,000 to help pay for the resurfacing of North Woodbridge, which most definitely is needed, but other potholed streets will remain potholed. Meanwhile, another $1 million from Stimi is designated to continue the downtown streetscape from Franklin up to Janes. The eastern portion of this strip is virtually abandoned. Wouldn’t the residents, East Side and West Side alike, instead prefer for more local streets to be resurfaced? But under federal rules, stimulus money can’t be spent to fix side streets. (Meanwhile, pre-Stimi, we’re still going to waste $12 million on an I-675 exit ramp relocation.) Immediate ‘Infrastructure Jobs?’ Dream On If you are a close government watcher, you may remember talk last winter that the Stimi plan would give favor to “shovel-ready” infrastructure projects. We are informed on www.michigan.gov/recovery that things won’t be so simple. The website offers an explanation that most of the money will go for existing programs: “The vast majority of shovel-ready projects submitted to our inventory will not be eligible for state funding. That does not mean that your community should abandon these priority lists. The formula funds you receive may provide the funding needed for these projects. In addition, dozens of competitive grant opportunities are available for funding for specific projects.” In other words, good luck, schmucks. Competing for the Stimi Money One reason that we don’t yet see more of Stimi is that big chunks of money are reserved for competitive grants, with application deadlines and final decisions still pending. Bidders include not only local governments and schools and public agencies, but also private nonprofit organizations. The www.michigan.gov/recovery site invites us to punch a button for “grant opportunities.” The resulting list is staggering, with no less than 111 options in 10 categories: economic development, education and research, energy, environment, health & human services, infrastructure, jobs & job training, public safety, technology, and vibrant communities. Marc McGill in February convened a meeting of nearly 100 Saginaw County local officials, as reported at the time in Review’s pages. He emphasized a need for teamwork, aiming for county government to play a leadership role as a unifying source for progress. But alas, says McGill, various federal agencies are so separately entrenched that most grant seekers must proceed on their own. Review readers hopefully will not hold us accountable for failing to immediately explore all 111 of those competitive grant options in depth; but we did sample some of them. For example, HUD (Housing and Urban Development) nationally is getting $4 billion from Stimi for “capital and management activities.” The first $3 billion will go “into the formula,” which is government-speak for saying that all local Housing Commissions will reap increases in their regular operating funds. The remaining $1 billion is for “Capital Fund Recovery Competition Grants,” for which there will be local winners and losers. Goals include serving people with disabilities, breaking up concentrated project complexes, and adopting energy efficiency. Proposal guidelines consume 132 pages, and, get this; HUD is subtracting 5 percent ($5 million) for the cost of evaluating those proposals. Questions involve more than just sums of money. From the Department of Energy, there are completive grant funds available for coal-fired plants in one category, and for solar and wind and geothermal in other categories. This does not reflect a department that has established clear-cut energy policies. Pros and Cons of Revenue Sharing Some skeptics have suggested that the $535 billion (pre-interest) Stimi spending share should instead simply be handed back to the American people. With a population of slightly more than 300 million, this would add up to roughly $1,800 per person. A lesser-discussed option, for people who still believe in a somewhat activist government, would be to return the money to local communities as general revenue sharing, without so many strings attached. A watershed year in this regard was 1986. Saginaw City Hall’s main two sources of federal funds at the time were general revenue sharing and community development block grants. General revenue sharing had scant overhead (in other words, scant federal bureaucracy) and was spent mostly for basics, such as the police and fire departments. Block grants, then and now, were for special purposes such as housing and social programs. Saginaw at the time received roughly equal amounts, $3 million for revenue sharing and $3 million for block grants. President Reagan decided to wield his budget ax. Which did he cut? Based on his philosophy, you would think Reagan surely would have slashed the block grants and maintained the general revenue sharing. But no, Reagan instead wiped out general revenue sharing, a decision totally contrary to his viewpoint. Why??? This remains a mystery, with a prime theory being that Reagan was so distant and inattentive that he didn’t know one from the other. Imagine if Stimi were simply parcelled out to each local community across the nation, for local leaders to spend for the greatest good. On one hand, a great deal of bureaucracy would be eliminated. On the other hand, competing local forces might fight like cats and dogs; witness the battle between the Saginaw County Sheriff’s Department and the Saginaw City Police Department regarding just one stimulus chunk. Could general revenue sharing still work? Regardless, it’s something to consider. Portions of Stimi can be difficult to find (and hold accountable) in the bowels of the bureaucracy. Coming Next Issue: What About Stimi Money for Local Business Expansion? |
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