PROVIDENCE – Although Rhode Island is expected to receive about $1 billion in various forms of federal stimulus funding over the next few years, the impact of those dollars on the economy, job creation and infrastructure improvements has yet to be felt in any substantive way, Gov. Donald L. Carcieri told the state Economic Policy Council at a meeting this morning.
“We are taking advantage of this as fast as we can,” Carcieri said. Particularly in terms of job creation, “the money is flowing very slowly,” the governor said. “Anybody who thinks it’s coming out in a big bucket fast is mistaken.”
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Overall, “this money is not having any significant impact right now,” the governor told the 19 council members present for the session at the R.I. Economic Development Corporation (EDC) headquarters.
One reason for the lack of impact, the governor suggested, is because the federal government had no special mechanisms in place to distribute the funding when the $787 billion American Recovery and Reinvestment Act of 2009 was enacted in February, the single largest appropriation bill in U.S. history.
As a result, the federal government is using a mix of existing mechanisms to disperse the funds, said Jamie McDonald, director of the state office of economic recovery and reinvestment.
Some of the money will go directly to the state, other funds will go to municipalities and still other dollars will be distributed through grants and a competitive application process. Carcieri said it is safe to say that most of the funding for innovative technology and alternative energy projects, for instance, will be apportioned through direct competitive grants nationwide.
By executive order, the governor created the state office of recovery and reinvestment in early February, about one week before the federal package was enacted, to handle the complex process of tracking and applying for funds.
Carcieri said the federal government did not include money for administrative overhead, so “we’re absorbing that cost.” The new office at the Statehouse is made up of teams of employees, drawn from existing state agencies, each working on different aspects of the appropriation, such as health, information technology, education, energy and transportation funding, according to McDonald and Carcieri.
When Rhode Island will begin to feel the effects of the federal bonanza is unknown. Under the federal government’s plan, the bulk of the spending will come in fiscal year 2010, with more than $100 billion slated for expenditure that year, and fiscal year 2011, when another $60 billion will be spent, the governor pointed out. “If our [state] revenue doesn’t climb in two years, it will be an issue,” he said.
Main funding streams for Rhode Island, according to information provided by McDonald, include: more than $450 million for Medicaid and the global waiver; more than $176 million for transportation; more than $260 million for education; more than $11.5 million for public safety; more than $46.5 million for water resources; and more than $17 million for workforce development. These funding streams include money that will come directly to state government, as well as dollars to be disbursed to cities and towns and via competitive grants.
To track the status of the federal stimulus funding, the state recovery office maintains a Web site at www.recovery.ri.gov.
Members of the state Economic Policy Council include some of the heaviest hitters in state economic circles, such as leading executives of CVS Caremark Corp., Amgen Inc., Cox Communications, the University of Rhode Island, National Grid and Gilbane Inc. A review board recently suggested merging the economic policy council with a newly restructured EDC, but the governor made it clear this morning that the council will continue to meet until the EDC changes are in place.
