State official disagrees with Chavez that stimulus is crappy

ALBUQUERQUE — Albuquerque and state officials disagree about whether the state’s largest city is benefiting sufficiently from federal stimulus dollars.

“Most mayors around the country, at least the major cities, feel like we’re standing with buckets in the rain and it’s falling all around us,” Albuquerque Mayor Martin Chavez said in an online article produced by Slate entitled “Pity City.”

The author sums up Chavez’s assessment and paraphrases the mayor describing the stimulus program as a “crappy one for Albuquerque.”

But former New Mexico Gov. Toney Anaya, who was appointed by Gov. Bill Richardson to administer New Mexico’s office of the American Recovery and Reinvestment Act (ARRA), disagrees.

While Albuquerque may be getting direct control of only a small portion of the amount coming into the state, the city will “ultimately get more than its fair share,” he said in an interview with NMI.

The disagreement is chiefly about the program’s design, with Albuquerque officials saying it should focus more on new programs and state officials saying it has been essential for keeping afloat necessary state programs that benefit the city.

The city of Albuquerque’s chief operating officer, Irene Garcia, said the administration believes Albuquerque should have been directly allocated funds proportionate to both its population and the revenue it generates, instead of the $62 million it received from the state’s anticipated $3 billion total haul.

“We could argue that we are the largest population base, and more services are needed here,” Garcia, an appointee of Chavez, said. “We’re 26 percent of the state population, and 32 percent of the revenue generated in the state comes from Albuquerque. So we would have liked to see 26 or 32 percent of the stimulus dollars. That we didn’t is mostly due to how it was designed.”

The federal government used existing programs rather than creating new ones, Garcia explained, which has meant that federal dollars have flowed to the local level through state-level programs.

“There was anticipation that there would be new programs, but that’s not the way it turned out,” she said.  “Solar programs through the Department of Energy were new, but otherwise the funds went through existing programs.”

The result is that the state gets to decide where the bulk of the money goes. That combined with the “shovel ready” requirement for directing stimulus money to infrastructure projects has city officials feeling left out in the cold.

For instance, rather than get a new Paseo del Norte/Interstate 25 interchange built with stimulus dollars, which is almost universally desired across Albuquerque’s political spectrum, state officials instead decided to fund a new highway interchange at Paseo del Volcan at the western edge of Bernalillo County.

“The [state] Department of Transportation can argue that it’s in Albuquerque, but it wasn’t number one on our list,” Garcia said.  “That would be Paseo del Norte. We would have liked the opportunity to submit other proposals as well, but the caveat was that any project had to be shovel ready.”

Anaya said even if Paseo del Norte had been shovel ready, it probably wouldn’t have been chosen due to its size, because the primary intent of the stimulus dollars was the stabilization of state budgets.

“It’s a misconception that the stimulus dollars are supposed to be primarily for job creation through infrastructure-type projects,” he said. “Choosing Paseo del Norte would have eaten up almost the entire stimulus budget of the Department of Transportation due to its size.”

Two-thirds of the estimated $3 billion that will come to New Mexico is destined for New Mexico state agencies, such as the Human Services and Workforce Solutions Departments.

The stimulus dollars helped plug a budget deficit in fiscal year 2009, and an additional amount was allocated to the fiscal year that started on July 1. The total allocation so far is about $500 million, Anaya said, with the rest designated for state agencies over the next 18 months.

In addition to the $62 million already allocated to the city, Albuquerque will likely benefit from additional program and infrastructure grants. But even more importantly, flow-through money from the state agencies — to education and other key areas like unemployment insurance, food stamps and college education assistance programs — has already been crucial for the city, Anaya said.

“There’s been a huge increase in university or college enrollment due to the bad economy,” Anaya noted.  “About $194 million of our stimulus allocation has gone to Pell grants or work-study programs.”

“Plus, had it not been for the stimulus dollars already allocated, schools would be laying off employees, school districts might be choosing which schools to close, and other essential services would have been cut by the state Legislature.”

“Without those stimulus funds we’d be seeing some pretty dramatic cuts already. We’re not a basket case like California, and the reason is the stimulus.”

Looking at the data

One problem in determining what impact the stimulus is actually having, either statewide or in Albuquerque, is the lack of available data.

Larry Waldman, senior economist at the University of New Mexico’s Bureau of Business and Economic Research, said it’s impossible to know the effect of stimulus dollars at this point given the data provided on the ARRA website.

New Mexico Voices for Children economist Gerry Bradley concurred, saying that while he was “astonished” that anyone would think Albuquerque isn’t benefiting from the stimulus dollars he isn’t surprised given the state of the Web site.

“In the first quarter of this year, transfer receipts such as unemployment insurance, Medicaid, and food stamps were already keeping New Mexico’s economy from going into free fall,” he said.  “In the second quarter, the stimulus money… furnished an additional transfusion to the state’s economy. Plus there was an income tax break for lower income folks in the spring, and those dollars are being spent in the economy. I am astonished that… the mayor’s office does not know that.”

“However, I guess I shouldn’t be surprised,” he continued, “since virtually nothing has been done to publicize the impact of the Recovery Act funds on the state’s economy.”

But one can piece together a semblance of a picture by looking at various reports put out by state agencies in combination with what is on the ARRA Web site.

For instance, as of May 2009 the state had an additional 20,500 people out of work over the amount recorded May 2008, with just over half of those, or 11,900,  in Albuquerque.  At the same time, unemployment insurance claims have skyrocketed, from just under 14,000 in March 2008, to 32,000 in June 2009.

The ARRA Web site shows that, so far, $15,632,000 in federal dollars has flowed to a line item called “weekly unemployment insurance benefit increase.”

Bradley said that’s an indicator that federal stimulus dollars are being spent by that department. But the problem with knowing the impact of stimulus on the economy, both he and Waldman said, is the lack of further detail about when and on what the money was spent.

Still, they both agreed with Anaya that the money being pumped into the state — through actual transfers as well as a cut in personal income taxes earlier this year — is helping.

“The economy is in the tank, and the data every month is worse than we expected,” Waldman said. “The second quarter employment “shrink” hasn’t been seen since the mid 1950s. One would think that if (the stimulus funding) wasn’t here, the economy would be really bad.”