Washington Watch Report: Abuses of Stimulus Funds

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Missouri Spends $500,000 of Federal Stimulus Money on Fish Food

The Missouri legislature is currently considering a proposal to spend $156 million in federal stimulus funds. The package includes $500,000 to defray feed costs for Missouri fish farmers. (Source: Associated Press, http://www.kansascity.com/news/breaking_news/story/1132148.html)

 

The State of Michigan announced that they were spending $1,525,000 in federal stimulus money to streetscape six blocks of a downtown area surrounding a local casino and its parking garages. According to the press release issued by the state: “The city of Detroit, in coordination with the Downtown Development Authority (DDA), will streetscape Monroe Street from St. Antoine Street to Randolph Street, and Brush Street from Lafayette Boulevard to Gratiot Avenue, in Greektown. Streetscape elements include decorative and scored sidewalks, new streetlights, bike racks, trash receptacles and trees. This project will improve the visual quality of the area, making it attractive and safer for pedestrians and will complement the current investments that are part of the Greektown Casino development.”

As the map below indicates these streets border the Greektown Casino and its parking garages. Interestingly while the stimulus bill prevented taxpayer funds from being expended on casinos it does not preclude funds from being spent to improve the streetscapes around casinos.



(Source: Press Release, http://www.michigan.gov/recovery/0,1607,7-172-52829-212442--,00.html )

New York Spends $3.1 Million in Stimulus Funds for “Canal Boat” Museum

New York State elected to spend $3.1 million in federal stimulus funds to “make mechanical upgrades to the Day Peckinpaugh,” a 1921 canal motorship owned by the State Museum. According to a local news report, “The new federal grant will provide funds for the rehabilitation work necessary before permanent exhibits can be installed and the Peckinpaugh is ready for continuous tours, museum officials said.”(Source: Press Release, http://www.nysm.nysed.gov/press/releases/peckgrant.cfm)

 

New York State elected to spend $3.8 million in federal stimulus funds to extend the ARTWalk, urban art trail in Rochester. According to their website, “ARTWalk is a permanent urban art trail, connecting the arts centers and public spaces within the Neighborhood Of The Arts (NOTA). ARTWalk is an interactive outdoor museum…Along ARTWalk you can find various pieces of public art, be it visual works, or practical things such as park benches or bus stops which are artfully designed. Art is even imprinted into the sidewalk!”

Below are some examples of the current art available on ARTWalk:



(Source: Press Release, http://www.state.ny.us/governor/press/press_0402091_print.html )

$578,000 in Homeless Funding for a Town with No Homeless Problem

The town of Union, New York, received $578,661 in stimulus money that they didn’t ask for. The money is supposed to pay for homeless prevention and emergency shelter programs. But according to a town Supervisor, Union has no program in place to administer the funds, and the supervisor is not aware of any homeless problem existing. When asked about the grant, an official with HUD stated, "We hope and encourage these new grantees to develop creative strategies for the funding."(Source: http://www.pressconnects.com/article/20090305/NEWS01/903050353/1001 )

 

The Altoona Mirror ran a story regarding the stimulus that also raised question about whether a homeless prevention grant from the stimulus was necessary: “Altoona is getting $819,000 for a homelessness prevention program but may not have enough of a homelessness problem to use it.”(Source: http://www.altoonamirror.com/page/content.detail/id/517765.html )

Ohio Uses Stimulus Funds for Studies Rather Than Construction

Delaware Spends $400,000 in Stimulus Funding to Create Berth for Historic Boat

Public-Private Organization With One Employee to Spend $100 million in Stimulus Funds

The website AllGov.com recently reported that:

The stimulus fund will give $100 million to the Emergency Food and Shelter National Board Program (EFSP), a public-private organization that was created in 1983 to help provide for the needs of hungry and homeless Americans. The program, which is supposed to be overseen by the Federal Emergency Management Agency (FEMA), awards grants to local social service organizations. It sounds like a good idea, but there’s one catch: the EFSP has only one employee.

A recent report by the Inspector General of the Department of Homeland Security put the problem succinctly: “Staff within the Emergency Food and Shelter Program declined from six in 1997 to one in 2008, According to FEMA program officials, this decline led to a significant decrease in financial and program monitoring. Having one staff member responsible for both monitoring activities reduces FEMA’s ability to ensure the appropriate use of grant funds.”

A spokesperson for the Department of Homeland Security told The Center for Public integrity that, despite the influx of $100 million, there are no plans to add to EFSP’s staff of one.

(Source: http://www.allgov.com/ )

Houses for Developers and Investors Courtesy of the Stimulus?

The stimulus provided $2 billion for HUD's new Neighborhood Stabilization Program that provides funds to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. These funds are in addition to the $3.9 billion provided for the same program in the Housing and Economic Recovery Act of 2008 (enacted last July).

While HUD has yet to distribute the $2 billion provided in the stimulus, a recent review by the Los Angeles Times of a similar program launched in 1998 indicates what kind of results we might have to look forward to:

Congress launched the program in 1998 to clear the Department of Housing and Urban Development's books of foreclosures and provide affordable housing. Local governments would buy the homes for $1, fix them up and resell them at a discount to poor families, who would get a chance to put down roots in the community.

More than 2,300 homes have been sold by HUD for $1 each nationwide, with 326 in California. Nearly half of the homes in California were bought by companies or individuals who typically resold them at a much higher price.

The city of San Bernardino bought more Dollar Homes -- 62 -- than any other city or county in the state. But San Bernardino officials could not provide The Times with any account of what happened to the homes after they were sold.

Using county property tax and assessor records, federal bankruptcy files and real estate listings, The Times tracked every property sale to San Bernardino under the program since 2000. Among the findings:

* At least 43 of the 62 homes were sold to housing contractors and investors. Within months after purchase, nearly all were resold, and for an average of three times the original sales price.

Despite their track record, San Bernardino received $8.4 million from the first $4 billion for the Neighborhood Stabilization Program.

(Source: http://www.latimes.com/ )

Can’t Afford a Bicycle After Purchasing a Million Dollar Home? Stimulus Money to the Rescue

The Washington D.C. Department of Transportation will spend $3 million in stimulus money to expand its “Smartbike” program.

The money will increase the program by 5 times from 10 bike racks to 50 bike racks, and from 100 bikes to 500 bikes. Neighborhoods expected to get new bike racks include: Adams Morgan, Columbia Heights, Capitol Hill, Anacostia, and Georgetown – where the average single family home runs $1.2 million.

(Source: http://www.wtopnews.com/)

Stimulus Money Says Go to West Virginia Young Man & Grow Ginseng!

West Virginia has officially requested $380,350 from the stimulus bill to hire two state coordinators and an assistant to encourage private landowners to grow ginseng and shiitake mushrooms on their private forestlands. With three staff and $380,000 in federal money, they hope to contact 160 landowners. That works out to $2,377 per contact. (Source: http://www.wvgov.org/)

40 New Jobs from the Stimulus? More Like 2.

A press release from Sens. Baucus and Tester claimed $1.3 million in stimulus money would create 40 new jobs for the Flathead City-County Health Department. According to local press reports, in reality, the money will simply provide another year of funding for the department’s Community Health Center, which already has 10 full-time positions and plan to add only two more jobs. (Source: http://dailyinterlake.com/ )

In Connecticut, State Officials Can’t Vouch for Administration Job Claims

On April 5th, The Hartford Courant reported on the job creation claims surrounding the stimulus:

Last month, a team from Gov. M. Jodi Rell's office went to Washington and heard that Connecticut's share of the stimulus pot was projected to create or save 41,000 jobs — in a state that lost just shy of 58,000 jobs from March 2008 through February.

But as Matt Fritz, one of the governor's point people on stimulus funding, said during several hours of conversations last week, no one in Rell's office is comfortable — yet — with that 41,000 figure.

No federal official was able to explain to the Connecticut delegation what constitutes "a job." At what wage or duration? How do you hold an employer accountable? Does it have to be a new job, or could it be one that already exists?

For example, the MDC, citing "projected estimates" from the contractor, reported that two of the five phases of the planned North End work would involve a total of 54 jobs.

There were no estimates for the other three phases. Without a definition from the feds, it's not clear whether that level of reporting would satisfy the stimulus requirements, or whether workers already on a contractor's payroll would constitute "job creation."

As of Friday evening, state officials had gotten no federal guidance on those points, more than three weeks after the Washington trip.

(Source: http://www.courant.com/ )

Massachusetts Officials Can’t Explain Jobs Numbers Either

On March 27th, the Associated Press reported:

State officials overseeing the federal economic stimulus program in Massachusetts say they have no idea how the White House came up with one key pledge — the promise to save or create 79,000 jobs in the state. They say they're not even sure how to measure saved jobs — and fear the jobs figure sets an unrealistic yardstick against which the success or failure of the program will be measured.

"The federal estimate of 79,000, we really don't know what's behind that, we just plain don't," Jeffrey Simon, Director of Infrastructure Investment in Massachusetts, told The Associated Press. "I'm not saying it's not 79,000, but I just don't have any way of knowing that," he said.

Simon and his counterparts overseeing the distribution of stimulus funds in Massachusetts said concerns about the state jobs numbers were raised at a meeting earlier this month in Washington between state and federal leaders.

Massachusetts Undersecretary of Administration and Finance Jay Gonzalez also attended the Washington meeting and said other states complained that issuing job estimates undercut the administration's vow of transparency because it was unclear where the estimates came from.

Gonzalez said he was asked at one point how he might come up with a jobs estimate and pointed federal officials to a state task force report, but cautioned them the estimate was very rough and came with "qualifications all over it."

He said he was surprised when the state was presented with the estimate of 79,000.

"We have no idea where that number came from and now we're going to be measured against it," Gonzalez told the AP. "They haven't even decided yet how they are going to require that we measure new and retained jobs."

(Source: Associated Press )

In Nevada Stimulus Bill Mandates Pay Three Times Going Rate, Meaning Fewer Jobs

The Wall Street Journal recently reported that, “In Nevada, lawmakers agreed that strings attached to the stimulus would require them to pay the prevailing union wage -- $46 to $57 an hour -- to construction workers who will fan out to make buildings more energy- efficient. Still under debate is whether the state should pay equally high wages to workers hired under a locally funded weatherization program, which typically pays $15 an hour.”

(Source: Wall Street Journal )

Fewer Jobs and Fewer Weatherized Homes in Los Angeles Because of Wage Mandate