Rhode Island news

Comments | Recommended

Carcieri: Stimulus money hasn’t helped R.I. economy

01:00 AM EDT on Wednesday, May 13, 2009

By Benjamin N. Gedan

Journal Staff Writer

Governor Carcieri addresses a meeting of the state Economic Development Corporation board on Tuesday.


The Providence Journal / Kathy Borchers

PROVIDENCE –– The gargantuan federal economic stimulus package has done little to revive Rhode Island’s economy, Governor Carcieri said Tuesday.

Three months after President Obama signed the historic $787-billion spending bill designed to reverse a rapidly worsening national recession, only $28.6 billion has been doled out to the states.

In Rhode Island, where the jobless rate is the sixth-highest in the country, just $176 million of a promised $1.1 billion in stimulus funds has been spent.

The vast majority of that money has gone for food and medical care for the poor –– programs critical to struggling families but not remedies for the state’s economic troubles.

“They make it sound like all this money is flowing,” Carcieri told his top economic advisers at a meeting of the Economic Policy Council Tuesday morning. “It’s not.”

The stimulus spending has aided food-stamp recipients, boosted jobless benefits for 2,600 unemployed residents and paid for roadway improvements. But overall, Carcieri said, “this money is not having any significant impact right now.”

Just last month, Carcieri, a Republican, was praising the federal aid, responsible for thousands of summer jobs and more significantly, rescuing the state from a crushing budget deficit with more than $200 million for Medicaid and schools. The transportation projects, he told CNN, “have an immediate impact on jobs.”

The state’s overburdened Department of Labor and Training has accepted $17.4 million in stimulus funds. And an additional $46 million is paying for upgrades to drinking water systems, sewer lines and wastewater treatment plants.

Moira Mack, a White House spokeswoman, said that the stimulus is playing a key role in repairing Rhode Island’s economy.

“With highway projects, airport projects, health-care assistance and aid to those in need all flowing into the state and hundreds of millions more to come,” Mack said, “we remain confident that the recovery act will make a major contribution in turning around the Rhode Island economy.”

U.S. Sen. Jack Reed also defended the stimulus. “The state has received more than $2 million a day since President Obama signed the recovery act into law and there is no question it has had a beneficial impact in Rhode Island, preserving and creating jobs and providing workers with more take-home pay,” Reed said in a statement. “Everyone wants the economy to improve as quickly as possible, but reversing a sharp economic decline takes time.”

Carcieri himself still has high hopes for the stimulus. At Tuesday’s meeting, he repeated his goal of using the federal aid to thrust Rhode Island into a position of “national leadership” in off-shore wind energy.

Committees at the state’s new Office of Economic Recovery and Reinvestment are preparing to do battle for billions of dollars in competitive grants, evaluating “thousand of projects” from local businesses and universities for ambitious infrastructure and research projects.

From the start, the stimulus was designed to bring about complex, structural changes to America’s economy and energy use. Given those goals and the scale of the program, the pace of spending is reasonable, said Fred S. Hashway Jr., director of government affairs for the state Economic Development Corporation. “Deploying a trillion dollars,” he said, “is not easy.”

In large measure, however, the stimulus was also designed to quickly create jobs. In Rhode Island, the 10.5 percent jobless rate –– the highest since the 1970s –– has not improved since the stimulus passed.

Now, facing unexpectedly meager tax receipts that have grown the state’s budget deficit, Carcieri is dampening expectations for any short-term federal rescue. As some economists warn of the economic aftershocks of the end of stimulus spending, the governor says the program is hardly under way.

Federal agencies, for example, are not yet prepared to evaluate grant requests from states for projects such as alternative energy generation.

Even the spigot for transportation spending is narrow. Of $137 million allocated for Rhode Island’s roadways, just $20 million has been made available to the state and less than $500,000 has been spent putting to work idled construction workers.

“There’s not a lot of money available yet from the feds,” Jamia McDonald, director of the Office of Economic Recovery and Reinvestment, said. “It hasn’t had the impact so far that we’d hoped.”Where most of the money has gone so far

•Department of Human

Services: $71,803,163

•Department of Mental Health, Retardation and Hospitals: $27,270,340

•Department of Labor and

Training: $5,167,619

•Department of Children, Youth and Families: $3,902,451

•Department of Elderly Affairs: $514,838

•Department of Transportation: $446,668

•Department of Health: $66,253

bgedan@projo.com

Advertisement

Reader Reaction