EagleTribune.com, North Andover, MA

August 17, 2009

Mass. among top 10 states in stimulus spending; job numbers elusive

By Kyle Cheney

STATE HOUSE, BOSTON — The state, local governments and private entities in Massachusetts have received $4.44 billion and spent more than $2.02 billion, 45 percent, through the federal stimulus law, known as the American Recovery and Reinvestment Act.

That percentage of spending puts Massachusetts seventh among states in the rate of putting stimulus funds into the economy, Executive Office of Administration and Finance officials said Thursday. By the end of the life of the stimulus in fiscal 2011, the state expects to receive $9.22 billion for spending out of $514 billion doled out nationally, as well as $4.28 billion in tax benefits, compared to $272.52 billion nationally.

Testifying Thursday before the Legislature's Committee on Federal Stimulus Oversight, budget officials said the federal funds had helped save budgets for important social welfare programs, spark infrastructure development and retain jobs. But "evolving" federal guidance has made it difficult to track the number of jobs created, they said.

Much of the funding has been used in the state budget, effectively preserving jobs that may have been cut.

Secretary of Administration and Finance Leslie Kirwan said stimulus spending was one facet of the Patrick administration's effort to turn around the Massachusetts economy, which has seen tens of thousands of job losses and deteriorating tax collections in recent months. Other aspects include the state's borrowing program, an accelerated bridge repair program, as well as investments in broadband, clean energy and life sciences.

Of the $2.02 billion in stimulus funds spent, state agencies are responsible for $1.47 billion, including $419 million for education, $1.02 billion for safety net programs, $12.4 million for public safety efforts, $8.1 million for labor and workforce development programs and $4.5 million for transportation programs. The rest flows directly into cities and towns, school districts and non-governmental entities.

Spending deadlines for hundreds of millions of dollars of transportation infrastructure funds have been met and exceeded, said Jeffrey Simon, director of the Patrick administration's Office of Infrastructure Investment, which oversees much of the stimulus spending. Those deadlines included a 120-day window to spend $153 million on highway repairs - Massachusetts spent $191 million - and a 180-day timeframe to spend $159 million on transit - the state has spent $164 million as of two weeks ago - Simon said. If those deadlines had not been met, the state would have had to return the money to the federal government.

Administration officials said they were struggling to quantify the number of jobs created by ARRA funds because of "evolving" guidance for how to calculate job gains and job retention.

"We're on version three now of directives from [the federal Office of Management and Budget]," Simon said. Simon pointed to an Oct. 10 deadline for reporting such numbers, when the state hopes to have clearer guidance.

Sen. Marc Pacheco, who co-chairs the stimulus oversight committee, said he expected "a good news story" when those job numbers were available.

Kirwan later said she expected the numbers to show that "most likely thousands of local jobs" had been created or retained. She, as well as committee co-chairman Rep. David Linsky, said the federal funds for safety net programs - food stamps, mental health services and others - had saved lives.

Since March 19, the last time Administration and Finance officials came before the committee to discuss stimulus funding, Simon's office has hired two veterans of Attorney General Martha Coakley's office to help oversee infrastructure spending. The two, Stephanie LeBlanc and Douglas Rice, who respectively serve as infrastructure assessment manager and compliance and reporting manager, worked on Big Dig cost recovery efforts for Coakley. Simon said hiring officials with that experience made "a statement" about the administration's seriousness about ensuring that public dollars are spent wisely.

Kirwan told committee members the administration had hoped to evenly spread its stimulus funds through fiscal years 2009, 2010 and 2011, but steep deterioration in revenue collections moved state policymakers to frontload much of the stimulus spending to help balance the fiscal 2009 budget.

"When the governor first put this budget together for fiscal '10, we had not yet experienced the revenue losses for April and June," she said, noting that those two months saw revenues miss benchmarks by $500 million and $180 million, respectively. "At this time last year, we still had not lost a dollar of revenue. We did not until the middle of September last year have any loss of revenue."

Comptroller Martin Benison also testified at the hearing, describing his office's efforts to track and report on 34 separate grant awards overseen by OMB. Twenty departments - 16 executive agencies, two non-executive departments and two colleges - are responsible for administering those grants, which have totaled more than $500 million to date. Much of that includes a $412 million use of education funds to offset a fiscal 2009 local aid reduction.

Benison said his office holds weekly conference calls with stimulus stakeholders to coordinate reporting efforts.