Govs’ Q & A: Spending the Stimulus

With billions of dollars flowing into states from the stimulus package, Stateline.org asked governors attending the National Governors Association winter meeting Feb. 21-23 how it feels to be in the hot seat in charge of making sure the money is well-spent.

Some governors are worried about picking the right projects so they won’t be stuck with holes in their budgets when the money runs out. Others complain that the feds have attached so many strings they won’t be able to spend the funds quickly enough.

This is part one of a series featuring governors’ responses to questions asked during the NGA winter meeting. Tomorrow, Statelines.org will feature responses about avoiding deficits following the stimulus.

 

What is the greatest challenge or
worry in ensuring the stimulus money
is well-spent in your state?

 

 

 

Here are responses of 21 governors:

 

“Part of it, frankly, is just making sure we understand the rules. Part of it is very straightforward. The Medicaid’s pretty straightforward. Some of it, like education, is not. In some cases, the rules are not even written. What all of us want to do, as governors, is make sure we get every dollar our states are potentially eligible for.”

– Delaware Gov. Jack Markell (D)

 

“Just that it is well-spent. We’ve met with our agency heads for a number of weeks now to be prepared for that. We began last August with an accelerated Florida program that really is a natural dovetail into what’s happening now on the federal level. We’re prepared and we’re ready.”

– Florida Gov. Charlie Crist (R)

 

Hawaii Gov. Linda Lingle (R)

“I think the biggest challenge right now for the governors in all the states is how the money is actually going to flow into the states. And the truth is, after talking with several Cabinet secretaries … they don’t really know yet in many cases, because some of them are formula-based cases, but some of them are competitive grants. They are simply not set up at this time to deal with the amount of requests that will come in. They don’t have the staffs for it.”

“I want to do no harm in the future … We’re looking at our $1 billion that seems to be our share, we’re looking at whatever we do with that money, in two years it doesn’t cause an automatic general tax increase. So we want this time, number 1, to provide whatever service, whether its education or human services, we want to be able to provide that service to the citizens but also use that time to inform the citizens that this is going to go away in two years, so start building an alternative lifestyle for the recipient of those services.”

 

“The key is doing everything we can to make it work as quickly as possible. On Tuesday, when the president signed the bill, my Department of Transportation awarded 19 bridge and road projects for $56 million. That’s the expectation across Iowa and across America, that we’re going to get to work, we’re going to turn this economy around, we’re going to stimulate the economy and create jobs. In one case, a contractor was able to hire 10 people he had laid off the week before because he got one of these 19 projects. That’s a great thing.”

Illinois Gov. Pat Quinn (D)

“We want to make sure that we do it quickly and properly, to have meritorious projects that really make a difference, not only in the short run but in the long run. We’re talking about investing in construction that will be a foundation for economic growth for generations. So we’ve got to be prudent in terms of picking the projects, but they have to be ready to go right now. We want to put people to work right this time and hopefully keep them working for as long as possible.”

 

Michigan Gov. Jennifer Granholm (D)

“It’s critical that the money has to be used for one-time purposes. You cannot use it for operations, you can’t use it to create a new program unless it is of limited duration and everyone knows it. The expectations have to be played very carefully. You have to tell the schools, you’re getting a lot of money, but you can’t use it just to fund ongoing operations, you have to use it for one-time expenses that perhaps will reduce your costs in the long term, like IT. That’s what’s so critical about this: making sure people who receive the money understand that it’s one time, that that money is not going to be here in two years when the next budget is proposed. And use it wisely.”

 

“The federal government has attached so many conditions, strings, limits on the use of the money that it’s not going to allow us to be as creative or reform-minded or as flexible as we would have liked, and that’s disappointing. It wouldn’t have been the bill I would have crafted, but it is now the law so we have the responsibility to implement it and we’ll do our best to do that.”

 

“You have to manage the money in such a way that when the federal money runs out, you haven’t increased program spending in recurring expenditures beyond what’s going to be available in recurring revenues when the federal money is gone. I do compliment the Obama administration that they spread this money out over three fiscal years (in terms of Medicaid) and two fiscal years for most of it. That does make it easier to manage the money.”

 

“Getting people back to work and, plus, making a transformation to a new economy. This is not just a Band-Aid on a problem. This is an opportunity to transform our economy. I believe that one of the important stools of the future of this economy is workers and worker training.”

“We do have some flexibility with some of these dollars, but there are such backlogs for highway and bridge projects, for transmission lines and pipelines, (and) inefficient schools, that every single governor has five projects for every dollar that there’s a project for.”

“First we want to make sure that we use it for long-term benefit focused on one-time costs because, understand, it’s one-time money – so that we don’t get into a situation where we increase ongoing expenses. The second is making sure that we have good tracking, reporting and accountability so that people see how it’s being used and can value the benefit.”

Ohio Gov. Ted Strickland (D)

“Transparency. These resources should and must be spent in a way that is totally transparent, so that the Congress and the administration understands how they’re being spent and so the citizens within our individual states know what criteria is being used to evaluate projects and fully understand the process involved in those decisions. I think if we are transparent in the way these resources are used and are willing to be held accountable as governors, the stimulus will produce positive results.”

 

“The balance between making sure it’s done quickly so it has the needed impact and at the same time done effectively… Someone said to me, ‘This could be a governor’s nightmare because we’re going to have to report on each and every project we undertake.’ Well, we welcome the challenge.”

 

South Carolina Gov. Mark Sanford (R)

“Are there things that create a [budget] hole two years from now wherein if you take the money, all of a sudden you create another constituency for a government service, but how are you going to fund that service two years from now? Are there strings attached from the standpoint of other things that would have to be added?…We’re going to do what frankly didn’t happen on the House and Senate side, which is to go through (the law) with a fine-tooth comb and look at the programs that make sense for us and the ones that don’t.”

“From our perspective, the vast majority of the education dollars and the Medicaid (money) will be utilized in the existing plans, so we really don’t have very many concerns about that at all … The areas that we would have concern would be the items which would be handled by the separate federal agencies in a competitive bid situation, or be out to local units of government, or to local programs that may do their best but who aren’t used to receiving federal dollars directly and may not know how to handle the auditory or regulatory responsibility.”

 

“Right now it’s understanding what’s in (the law) and all the different pieces. Our teams are going through all of the thousand pages and seeing what’s earmarked specifically, what has some flexibility to it so that we can understand how it’s impacting our budgets…Hopefully, we’ll get to some sort of conclusion over the next week, because we’ve got a supplemental budget that I submitted and it has some fairly significant cuts, in local aid, for example, so some of those may be impacted by the stimulus package.”

– Rhode Island Gov. Don Carcieri (R)

 

Utah Gov. Jon Huntsman Jr. (R)

“Probably creating a comprehensible hierarchy of priorities, which is never an easy thing in politics. You’ve got to corral your state and all your citizens around an easily understood set of priorities and that’s what we’re going to endeavor to do with the stimulus money, so that people easily understand that it is schools, it is infrastructure, it is our ability to power ourselves from an electricity standpoint, and then beyond that it’s investments in things like basic research and fortifying the grid system that will allow more in the way of renewable energy projects – that we talk about but nobody can take seriously until such time as you’ve got the adequate infrastructure. And this will help us in that regard.”

 

Virginia Gov. Tim Kaine (D)

“The challenge that we’re wrestling with here is that each line item has different restraint, restrictions, timing, reporting mechanisms. I’ve got a team that’s second-to-none in fiscal accountability. We will spend the money wisely, we will invest it in things that will create a return for our citizens, but each line item comes in differently.

“I think it is the accountability, because it’s so complex. There must be 70 different silos for the money. Each of those silos has a different set of rules and regulations and timeframes. So we’re determined to show the public that the money was well-spent, but that sounds easier than it’s going to be to execute because of the complexity of it. But having said that, we’re determined that the people are going to see it on the ground, working for them. They’re going to know how every dollar was spent and that it was spent well, and they’re seeing return on their investment.”

Wyoming Gov. Dave Freudenthal (D)

“Actually, getting some clear idea from the federal agencies how it’s going to flow. I don’t worry about our ability to account for it. I don’t worry about our ability to put it out through the typical procedures in the state. We’ve been doing it for years. It’s really a question of getting sufficient information to make sure that you know what it is you’re doing.”