States stand to gain billions from stimulus

States stand to gain billions from stimulus

January 28th, 2009 by Herman Wang in Local Regional News

Tennessee would see an estimated $3.8 billion over this year and next, while Georgia would receive about $5.6 billion, under a proposed economic stimulus package headed to the U.S. House floor today for a vote, according to estimates and analyses of the bill's contents.

The package includes funds for highway construction, Medicaid relief, school construction, energy projects and other infrastructure.

Tennessee and Georgia lawmakers are hoping the total $825 billion bill, which includes stimulus money and tax cuts alike, will help their states cope in the midst of the worst recession in years.

But both state's governors have said the budgets they have prepared for the upcoming fiscal year will not count on the stimulus money because the bill could undergo substantial change in the coming days and weeks as the House and Senate debate it.

"We continue to receive estimates of what's being discussed, but we can't know the amount or limit on use of these funds until Congress votes," said Lydia Lenker, spokeswoman for Tennessee Gov. Phil Bredesen.

The governor has said the state needs to slash $900 million in spending this coming fiscal year.

Tennessee Finance Commissioner Dave Goetz has cautioned that the expected federal money is not a "silver bullet."

Bert Brantley, spokesman for Georgia Gov. Sonny Perdue, said with the state looking at $2 billion in budget cuts, the stimulus funds would give Georgia some breathing room, but he also said the state is in watch-and-see mode.

"We're going to watch what happens, and when we can offer input, we'll do that, as well," Mr. Brantley said. "Until you see what strings are attached, it's hard to know how you would act."

The House is expected to pass the Democratic-drafted bill today, largely along party lines, and the Senate could do the same by the end of the week.


The Federal Funds Information for States, a project of the National Governors Association and National Conference of State Legislatures, estimates that as part of the package, Tennessee would see $613 million in highway construction funds.

Georgia, meanwhile, is expected to receive $1.046 billion in highway funds, according to a state-by-state breakdown released by House Speaker Nancy Pelosi, D-Calif.

Tennessee also could get about $701 million in new federal funding for Medicaid over the two-year period, while Georgia could get $742 million. Medicaid is known in Tennessee as TennCare and in Georgia as PeachCare.

"(Medicaid increases) will be a sizable form of relief for Tennessee," said Dr. Reuben Kyle, a consultant to the Tennessee Advisory Commission on Intergovernmental Relations, which released the analysis during a commission meeting.

The stimulus package also includes an estimated $244 million for Tennessee and $454 million for Georgia for K-12 construction aimed at rehabilitating school buildings and grounds.

President Barack Obama has insisted that highway infrastructure projects be "shovel ready," able to be up and going within a short period of time in order to maximize the economic stimulus impact.

The Tennessee Department of Transportation has identified 113 state projects totaling $850 million that officials think could be ready to go within 180 days. Among them are nine Southeast Tennessee road and bridge construction projects.

State House Transportation Committee Chairman Vince Dean, R-East Ridge, said top state transportation officials have assured him that "Tennessee is sitting on ready" when it comes to moving once the money is in hand.

Georgia transportation officials in December said the state has about $2.2 billion in ready-to-go road and bridge projects.


Democratic leaders in Congress have said they hope to have the stimulus bill ready for Mr. Obama's signature by mid-February. On Tuesday, the president made personal appeals on behalf of the bill to House and Senate Republicans on Capitol Hill.

But Rep. Zach Wamp, R-Tenn., said the president didn't change many minds, if any, and Republicans still are largely critical of the measure's spending levels.

"President Obama was very gracious and talked about being willing to negotiate, but he was dug in to the notion that government spending would help the economy, even at these extraordinarily high levels," he said. "Our concern is that most of it is just spending on social programs that won't have the desired effect, and it'll put us into bigger debt."

A spokesman for Rep. Nathan Deal, R-Ga., said the congressman also is opposed to the stimulus bill, while Rep. Lincoln Davis, D-Tenn., could not be reached for comment.

Sens. Lamar Alexander and Bob Corker, R-Tenn., both said Congress should focus on fixing the ailing housing markets and credit markets.

Sen. Alexander said in an interview on MSNBC that Republicans have proposed a 4 percent Treasury-backed mortgage for every credit-worthy American, as well as a $15,000 tax credit for first-time borrowers to purchase homes.

"If we get housing started again, the economy will start again," he said.

Sen. Corker told the Fox News Channel that the stimulus bill amounts to "throwing a potpourri of spending in multiple directions, not in a directive way."

"I think most people understand that 90 percent of the issue we're dealing with today is the credit market and housing," he said. "Until those are rectified, the fact of the matter is, anything we do as it relates to spending is like throwing money in a mud puddle."