Sunday, April 3, 2011

The American Recovery and Reinvestment Act: How the Mohawk Valley fared

Police officers and firefighters were hired. Contractors fixed the state's roads and bridges. The jobs of thousands of public school employees were safe, for the time being.
And don't forget about the $282 billion handed out nationwide in federal tax breaks.
The American Recovery and Reinvestment Act of 2009 has continued to inject millions of much-needed dollars into the Mohawk Valley's diminished economy. Whether those dollars created a positive lasting effect on the region, however, is still being debated.
As of Jan. 1, these stimulus funds have meant $128.3 million for entities in Oneida County, and $91.6 million in Herkimer County, according to an O-D analysis.
"We've used those funds to maintain positions that we would have needed to cut without them," said Kathy Houghton, superintendent of the New York Mills Union Free School District.
Still, results have been mixed.
* Nearly all of the state Department of Transportation-funded contracts for local work were awarded to companies headquartered outside the Mohawk Valley.
* Some experts say the $787 billion in stimulus funds were not enough to right the nation's - and the Mohawk Valley's - economic woes.
* School districts were awarded millions of federal dollars to stabilize budgets, but questions remain about the impact when those funds run out.
* The time it takes for groups to receive funding has varied dramatically, depending on which state agency administers the money.
The effectiveness of the federal stimulus still is being debated by elected officials and economic experts two years after the bill was enacted.
The bill funded job growth and cut taxes for individuals and small businesses. The region's unemployment rate, which was 9.1 percent in February, however, remains at levels considered high compared to the past 20 years.
And contracts were awarded to improve infrastructure, although whether money trickled down to workers beyond their expected salaries still is being questioned.
Stimulus funds followed two paths from Capitol Hill, either directly from the federal government or to state departments and agencies, which then administered the money through competitive programs to local entities.
Local police agencies had the option of applying for a litany of grants to purchase equipment and employ more officers.
"Anytime the department can get help putting boots on the street, whether that money comes from the state or the federal grants, we'll always try to do something positive with it," Utica Police Department spokesman Sgt. Steven Hauck said. "Financially for the city, it's helped because it has funded those four positions, and it has helped us put officers out on the street."
The city of Utica received about $923,000 to hire officers, purchase equipment such as guns and ammunition, and to ramp up its time dedicated to Internet crimes against children.
Of the funding, $694,860 went toward allowing the city to fund four entry-level officer positions for three years. As a stipulation of the grant, the city must keep those officers on the force for a fourth year.
The grant program to hire officers had been contentious for numerous municipalities when it was introduced last year because of the caveat that if money was awarded, further officers could not be cut.
Impact on unemployment
Injecting $787 billion into the nation's economy was expected to right the downturn that began affecting Oneida and Herkimer counties in late 2008.
For more than a decade, the Utica-Rome region's unemployment rate floated near 5 to 6 percent, increasing slightly in the winter months and then dropping again as companies hired seasonal workers in the summer, said Mark Barbano, a state Department of Labor analyst.
By the time President Barack Obama signed the federal stimulus bill February 2009, the local region's unemployment rate had spiked to 9.2 percent for the first time since January 1991, according to state Labor Department statistics. This year's unemployment statistics continue to mirror the elevated levels of 2010, Barbano said.
In Oneida and Herkimer counties, roughly 13,000 still remain unemployed.
So without the stimulus bill, would the picture have been even bleaker?
"I think it definitely helped, but the gap between where the actual unemployment was and where it was reported at being, was too large," said Ranjit Dighe, a professor of economics at SUNY Oswego. "A larger stimulus would have done the job. You have to wonder what the policymakers would have done if they had a crystal ball."
The stimulus bill funded work programs and courses for workforce training, and federal funds were used to directly hire companies to perform work.
For David Mathis, director of Oneida County Workforce Development, that means having extra funds to train youth who otherwise had no discernable job skills.
"What we did with our summer employment money was take disconnected youth and put them in training programs," he said. "Many didn't have high school diplomas, so that helped them get their GEDs while gaining some workforce experience."
Alice Savino, executive director of the Workforce Development board, said federal funding continues to provide training for both entry-level and more advanced jobs.
"The money we spent wasn't on staffing, or upgrading the facilities," she said. "That money was spent on training people for jobs, and that investment will pay dividends for some time to come."
Other projects
The stimulus also earmarked funds that would be used to repair and renovate the nation's highways. Putting contractors to work was expected to directly affect the local workforce.
The state Department of Transportation awarded $20.9 million for 17 projects in Herkimer and Oneida counties, creating 173.5 jobs, federal reports show.
Records show that while a number of Upstate New York companies won contracts here, only a single local company landed work.
For Central Paving Inc. of Herkimer, that meant working on the Mohawk Street Beautification Enhancement Project in the village of Herkimer, records show.
Other companies were headquartered as far away as Minnesota. Benchmark New York Inc., a New York City-based group, was awarded $4.5 million for three paving projects.
A regional DOT spokesperson was not available to comment about the issue.
Other stimulus funds went to public school districts throughout the state to stabilize their budgets during the recession.
The New York Mills school district already has received $1,002,843 from six grant programs.
Superintendent Houghton said stimulus funds were used during the current fiscal year to brace the district's budget. Federal job funds will be used during the 2011-12 school year to do the same. The future beyond that is not so certain.
"Obviously, those are holes that will need to be filled," she said. "We'll try to plan ahead to minimize expenses in ways that won't hurt the students."
Costs versus benefits
Officials remain split on whether spending billions of dollars in the end was worth it.
U.S. Sen. Charles Schumer, D-N.Y., remained on board with the stimulus' goals and objectives, helping him win reelection last fall.
Schumer also helped secure more than $38 million for Utica and Oneida County to help pay for state-mandated sewer upgrades estimated to cost $335 million.
"Every nickel we secure from the federal government is one less dollar local residents will have to pay in taxes and rate hikes," Schumer said at the time the funding was announced.
But U.S Rep. Richard Hanna, R-Barneveld, said the benefits of the stimulus did not outweigh the costs.
Hanna was elected last November, replacing Democrat Michael Arcuri, of Utica, who voted for the stimulus bill. Hanna said the government's mission should not be to directly create jobs, but rather "to foster an environment in which private sector job creation flourishes."
"I opposed the stimulus bill because I simply disagree that government spending is the best way to create jobs," said Hanna in an emailed response to questions. "Every dollar Washington spends is a tax dollar taken from a family or a business. Otherwise, it's borrowed money that adds to our debt."
Government expects fraud
Earl Devaney, the head of the White House’s Recovery Act Transparency and Accountability Board, said at the time of his appointment that U.S. taxpayers lose as much as 7 percent of their government’s spending to fraud and waste.
That would mean $2.19 billion of the $31.26 billion awarded to New York from the federal stimulus bill is expected to be lost to fraud and waste.
The New York State Stimulus Oversight Panel already has rooted out improper business practices in Brooklyn and Sullivan County during separate investigations involving weatherization contracts. That put a halt to $7 million in contracts so far, although that figure is well short of the 7 percent mark expected by Devaney.
A state Stimulus Oversight Panel spokesperson said a report updating the group’s work since October is still being compiled and is expected to be released this spring.

SIDEBAR

Where the money is going
In September, the village of Ilion was awarded a nearly $6.3 million low-interest loan to build a water filtration plant and make state-mandated improvements to an existing dam.
Those funds finally arrived within the last two weeks, about a month after the village had planned to solicit bids.
"We were just given the OK to go ahead with the projects," Ilion Mayor John Stephens said.
In 2008, the state Department of Environmental Conservation put the municipality under a consent order to repair Reservoir No. 2 dam.
The estimated cost for the project is $2 million - the remaining funds will be used to renovate the filtration plant.
"Obviously, the dam project is necessary because of the consent order. We don't have a choice," Stephens said. "We have the oldest, slow sand filtration plant in the nation that takes raw water and turns it in to potable water. This upgrade will help with that process."
The filtration plant serves the village and parts of the towns of Frankfort and German Flats.
Reducing energy costs
Millions of federal dollars have passed through the state Energy Research and Development Authority to local groups.
The city of Rome received funding to install solar panels at City Hall and the Kennedy Municipal Arena. The system is expected to reduce energy costs at City Hall by about 10 percent, said Christian Mercurio, the city's community development coordinator.
"It's extremely technical work, getting the systems design, that was the hardest part," he said.
Mercurio said the systems likely will be installed during the upcoming summer.
The Community at Sunset Woods, a senior citizen apartment complex in the village of New Hartford, used $19,993 from NYSERDA to perform an energy audit on its building in 2009.
"We're still putting together a strategy and a plan to make some adjustments," Executive Director Carol Jubenville said. "We were surprised to find that the building was as energy efficient as it was."
The nonprofit's board of directors still is reviewing the findings, she said, and no work has been done on the building to date. With the consultant's report in hand, the group now can apply for grants to implement the recommendations.

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