Tuesday, June 09, 2009
N.M. Stimulus Projects: Not So 'Shovel-Ready'
By Dan Boyd
Journal Capitol Bureau
SANTA FE New Mexico's slice of the $787 billion federal stimulus-money pie might not be as groundbreaking as expected.
The "public face" of the stimulus effort has been a worker in a hard hat, employed on a federally backed infrastructure project, The Associated Press reported nationally. But reviews of spending in New Mexico and around the country show that the phrase "shovel-ready" to describe the focus of stimulus projects probably has been overused.
In fact, in New Mexico and around the country, social spending, not construction, is in line to be the biggest winner in the ambitious federal effort to spark a sluggish economy.
Less than 10 percent of New Mexico's estimated $3 billion in stimulus money is slated to be used for highway construction. Only 12 percent will be spent repairing dams, building water treatment systems and undertaking other capital projects.
Nearly half of New Mexico's stimulus dollars about 46 percent will be spent on Medicaid and education.
Former Gov. Toney Anaya, who heads New Mexico's stimulus-focused Office of Recovery and Reinvestment, said he's not surprised by the breakdown of the stimulus spending which is determined by federal formulas.
"Those were easy ways to get the monies out and into the states," Anaya said in a recent interview, referring to spending on existing programs such as Medicaid and public schools.
Public education and Medicaid are in line to receive the largest chunks of money in New Mexico a combined total of more than $1.2 billion over the next two years.
Other "social" recipients, including an increase in unemployment benefits, more food for food banks and tuition assistance for college students, make up an additional $569.3 million of the state's share.
New Mexico transportation projects, in comparison, are slated to receive about $296.7 million.
Nationally, most of the roughly $300 billion going directly to the states is being funneled through existing government programs for health care, education, unemployment benefits, food stamps and other social services, The Associated Press reported.
"We all talked about 'shovel-ready' since September and assumed it was a whole lot of paving and building when, in fact, that's not the case," Chris Whatley, Washington director of the Council of State Governments, told the AP.
President Obama on Monday defended the administration's effort in light of growing unemployment figures nationally and Republican criticism of the stimulus spending as a big government program that won't do much in the long run for economic recovery.
Obama, even though he said the administration has done a lot to spark recovery in a short amount of time, vowed to speed up stimulus funding for public works projects this summer.
"Our ultimate goal is making sure that the average family out there mom working, dad working that they are able to pay their bills, feel some job security, make their mortgage payments," the president said.
But the administration also has called its aim "creating or saving" jobs.
How much of an impact Obama's recovery program has on the pace of job losses is still up for debate, the AP reports.
Obama has claimed that as many as 150,000 jobs have been saved or created by his stimulus plan so far, even as government reports have shown that the economy has lost more than 1.6 million jobs since Congress approved funding for the program in February, according to the AP.
Obama initially offered his stimulus plan as a way to put people back to work, a promise that 3.5 million jobs would be saved or created. The administration's predictions that unemployment would rise no higher than 8 percent already have been shattered. The current rate is 9.4 percent.
In New Mexico, there has been little change in unemployment numbers between February and the end of April, the latest period for which data are available: 5.4 percent to 5.8 percent.
Anaya defended the effectiveness of appropriating stimulus dollars to education, Medicaid and other social programs, saying the influx of federal dollars is already saving jobs statewide.
"Had it not been for those funds, school boards right now would be in emergency session trying to determine who gets laid off come July 1," Anaya told the Journal. "You have to look across the landscape at all jobs, not just construction jobs."
In New Mexico, the federal government estimates that 22,000 jobs will be created or saved because of the stimulus program, and Anaya said preserving jobs might actually be more important than creating new jobs, because it usually takes time to fill new positions.
The stimulus program's emphasis on speedy application of the dollars also has drawn criticism in some quarters.
Paul Gessing, president of the Rio Grande Foundation, an Albuquerque-based organization that favors free markets and limited government, said the decision not to focus on big-picture infrastructure projects could diminish the stimulus program's effectiveness in creating jobs and spurring the economy.
"It's a real troubling issue for us," Gessing said. "It doesn't seem like a lot of the spending was ever going to be as effective as portrayed."