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March 21, 2009

The Stimulus Czar Summit – Part 2

Most of the summit the Vice President sponsored in Washington last week consisted of half hour presentations from the agencies which will be awarding the money to us state "stimulus czars". These ranged from a boring reading of a list of numbers we could already find on a website to dynamic presentations with new information. There was never a case when the recovery czars didn't have a lot of questions over how a program would work; sometimes the agency people had answers and often they didn't.

Clearly a lot of thought has gone into how to get money out quickly. Often agencies are waiving complex requirements for the first tranche of money in a particular program and then requiring a lot more information for the second tranche when the recipients have had more time. This makes sense.

In many cases money is being distributed through existing programs using existing formulas. This is a fast process and it explains why we already know how much Vermont will receive for programs like home weatherization grants to low-income (200% of the poverty level) people. However, we in the states still have to be creative in these cases. Some programs are receiving ten times more money than they ever did before. Can we spend it as quickly as we were supposed to under the old rules? Should we broaden eligibility since there's more money? If we do, what happens when the money stops flowing from DC in a few years? Do we have enough people trained to do the work that the particular category of stimulus money supports? Not much guidance from Washington on these questions but we can work them out at the state level.

The most serious problem we saw was that there has been very little coordination between most of the federal agencies who are giving out money. Their definitions are not aligned. There is no clear way for us to make a request that spans multiple agencies even when that may make sense to do. Here in Vermont we want to assure that we build something lasting with this money by focusing many of the different stimulus streams on relatively few goals. We would expect preference to be given to applications which use the stimulus money well. But what if each of the agencies involved when we ask for a competitive grant for something like smart grid or broadband says "how can you be shovel-ready when you need approval from multiple agencies? What if the other agencies turn you down? Sorry, no money for you." We can't let lack of coordination in Washington (which the agencies say, with some justification, they haven't had time for) prevent us from coordination and smart use of the money.

Many states objected to the fact that, although the act is generous in allocating money for inspectors general at the federal level to audit how the money is spent, in most cases it allocates no administrative money to the states. This came to a head when Earl Delvaney, Chairman of the Recovery Act Transparency and Accountability, told us that they really expected the states to do the primary auditing for monies granted to or though them and Washington would just audit the auditors. "How come you have the money and we have the work?" the stimulus czar from somewhere asked. Delvaney was frank is saying that, if he had known he was going to have the job he has, he would have lobbied for some different provisions – presumably money for state administration or at least audits. Here in Vermont we're absorbing the extra administrative expense at the state level by "borrowing" skilled people from various agencies.

The word "transparency" was used more than the word "jobs". Problem is that there isn't yet any guidance on some basic transparency questions. For example, we're supposed to report on a per program basis the number of jobs created or retained and these numbers need to hold up in an audit. But what counts as a job? It's not as simple a question as it seems. Suppose you're building a building and you hire some people to build trusses onsite; probably those are jobs. But what if you buy pre-built trusses? Do you count the jobs in the factory that went into making the trusses? The question has some urgency because we'll need to require contractors and sub-contractors to comply with reporting requirements so we can report accurately but we're signing contracts today before we know what it is we're reporting.

Feel free to ignore the whining above; we'll figure a way to make all this work. It's our job.

The first post on the stimulus czar summit is at http://blog.tomevslin.com/2009/03/the-stimulus-czar-summit-part-1.html.


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