Region Rolls Up Sleeves With $30B Stimulus in Its Pockets

DALLAS - The eight states of the Southwest region have already put their $30 billion share of the federal stimulus in motion, launching transportation projects, patching holes in their budgets, and restoring programs that would otherwise go begging.

Under federal projections, Arizona, Arkansas, Colorado, Kansas, New Mexico, Oklahoma, Texas, and Utah would add 556,000 jobs through the additional spending.

Among all categories, the lion's share, $11.5 billion, would go to health care, with $7.3 billion for education, $4.6 billion for highways, $764 million for mass transit, and $745 million for water projects. Additional outlays would go toward law enforcement - including drug enforcement in the embattled border states - and investments in alternative energy.

The massive infusion of capital has drawn different reactions, depending on whether Democrats or Republicans are in charge.

Arizona and Colorado both received visits from President Obama after the stimulus bill passed. In Denver, where Obama signed the legislation on Feb. 17, Democratic Gov. Bill Ritter was laudatory over the inclusion of $130 million for energy programs that he has made a signature of his own administration.

"The president's recovery package will drive the New Energy Economy forward not just in this state, but all across America - creating jobs, reducing the cost of energy for families, and moving our nation closer to energy independence," Ritter said.

In Arizona, the response was more muted from newly installed Republican Gov. Jan Brewer and leaders of the Republican-controlled Legislature. Even the Arizona Department of Transportation took little note of the $522 million in funding that would be coming from the stimulus package.

In Texas, where Republican Gov. Rick Perry grudgingly accepted $15.5 billion - more than went to the region's other seven states combined - the Texas Department of Transportation last week jumped on $500 million of projects eligible to share in the $2.3 billion taxpayer-backed bounty for transportation.

In a meeting last week, the Texas Transportation Commission that oversees TxDOT also advanced several other projects that will be funded by state bond programs and a $4 billion redevelopment of the LBJ Freeway in Dallas that will be built in part by private developer Cintra as a toll project.

At the same two-day meeting of the TTC, commissioners adopted a "2030 Committee's Texas Transportation Needs Report," citing transportation needs between now and 2030 at $315 billion.

The transportation issue has created new drama between Perry and U.S. Sen. Kay Bailey Hutchison, his presumed challenger in the 2010 Republican primary, whom Perry staffers have taken to calling Kay "Bailout" Hutchison, even though she opposed the Obama stimulus package.

According to projections, Texas would add more than half of the region's 556,000 jobs under the stimulus. But Perry has sought to minimize Texas' economic problems, saying the state is in much better shape than others.

Those claims notwithstanding, Tom Pauken, head of the Texas Workforce Commission, now says the state may need a federal loan for its unemployment benefits fund by next fall. Perry last year suspended the unemployment tax on businesses, citing the state's low unemployment that has since risen to 6%.

Texas also will take most of the region's money for mass transit - $375 million - compared to Arizona's $101 million, Colorado's $104 million, and Utah's $58 million. New Mexico, which began operating its first commuter rail line last year under Gov. Bill Richardson's controversial GRIP bond program, will apply $28 million out of its $1.1 billion allocation to mass transit. Arkansas qualifies for $28.4 million in mass transit funds, while Kansas will receive $31 million.

Water is another critical issue for the arid West. Texas will receive $344 million in federal assistance for water projects, followed by $83 million for Arizona, $66 million for Colorado, $64 million for Oklahoma, $56 million for Kansas, $51 million for Arkansas, $41 million for Utah, and $40 million for New Mexico.

Gov. Kathleen Sebelius said Kansas' allocation of $1.7 billion of federal stimulus funds should enable her state to make progress on eliminating a budget shortfall in fiscal 2010 estimated at $654 million.

Sebelius said 85% of the Kansas budget is dedicated to education and health care, which make up much of the stimulus funding the state will receive.

"I think it will make 2010 budget decisions a little easier because it does give us a cushion," said Sebelius, whom Obama on Saturday nominated to be secretary of health and human services. If confirmed by Congress, she will join another Southwest governor in the cabinet, Arizona's Janet Napolitano, who heads the Department of Homeland Security.

Officials in Oklahoma are considering using a portion of the $2.6 billion of stimulus funds that the state will receive over the next two years to make up for declining revenue that otherwise would create a $900 million shortfall in fiscal 2010.

The state is seeking clarification from federal officials to determine how much of the $578 million in budget stabilization funds can be used to make up the revenue shortfall in the next fiscal year, which begins July 1. Almost $500 million is dedicated to restoring cuts in the budgets for public and higher education, but the state budget is currently balanced.

State superintendent of public instruction Sandy Garrett said Oklahoma schools will receive $287 million for special education efforts and programs designed to improve achievement of disadvantaged students. That is in addition the stabilization funds earmarked for education, Garrett said.

She said local districts can use the federal stimulus money for dropout prevention, graduation-rate improvement, early childhood programs, or longer school days.

The Oklahoma Transportation Commission will award contracts in late March that will allocate $340 million of the $465 million the state will receive for transportation efforts in the federal stimulus package. Another $39 million will be distributed among local transit projects.

Gary Ridley, director of the Oklahoma Department of Transportation, said the federal money is equivalent to a full year of state funding for highway projects, which has averaged about $400 million a year. The projects to be funded were part of ODOT's eight-year capital program or the pavement restoration program, he said, which will allow other projects to be accelerated when the work schedule is re-configured this fall.

Arkansas Gov. Mike Beebe wants to use the $2.1 billion allotted to the state in the federal stimulus package to upgrade school facilities, build roads and bridges, and make public facilities more energy efficient.

"This is an historic opportunity to establish lasting benefits for the people of our state," Beebe said. "While the stimulus package is precipitated by the difficult times we are all facing, if used wisely, these one-time funds can be leveraged to create a positive impact for years to come."

The state will receive $730 million for health care costs, $351.5 million for transportation infrastructure projects, $370.7 million for education, $133.8 million for public school students living in poverty, and $113.5 million for special education.

Last week, the Arkansas State Highway Commission approved 27 "shovel-ready" reconstruction and paving projects totaling $27 million. Officials said work could begin whenever the Federal Highway Administration makes the funds available, which is to be no later than March 10.

"This money has two purposes," Beebe told the highway commissioners. "One, jobs. Two, giving taxpayers something for their money."

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