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June 15, 2009

The Most Popular Stimulus Funds Are Gone

"We have a great library project shovel-ready," the lady from Morristown told me. It was my second day on the job as Vermont's Chief Recovery Officer; I asked her to tell me about it. "Repaving projects don't put carpenters to work; our construction project will." She was right, of course; but Morristown didn't get any money from the American Recovery and Investment Act (ARRA or the stimulus bill) for its library (but there are other ARRA-funded projects in and near Morrisville).

There is no specific program in ARRA for libraries. But Vermont did receive a two year allocation of $17.1 million which it is free to use for any government service. The Morrisville library would have been eligible for this money – known variously as the discretionary part of the State Fiscal Stabilization Fund (SFSF) or the General Services Fund (GSF). So would the lists of building and rehabilitation projects submitted by the University of Vermont, the state colleges, the hospitals, and some towns and school districts. People in my home town of Stowe hoped to use GSF for its long-sought and already-permitted hockey rink. The Preservation Trust listed over $27 million of shovel-ready projects on their website. There were at least $200 million of request for this money. It was obvious that most would be disappointed and, of course, they were.

Different states have different procedures for appropriating federal funds. Here in Vermont they are appropriated by law, not by the Governor unilaterally. Governor Douglas proposed spending all $17.1 million on economic development, mostly through the Vermont Economic Development Authority (VEDA). State money invested in VEDA attracts private funds into the same companies, and the hope was that the as much as $160 million would actually have been available for Vermont businesses as a result of this allocation.

The budget passed by the Legislature over the Governor's veto appropriates only half of the money, $8.5 million, for the State's fiscal year 2010 which begins on July 1, 2009. The rest remains to be appropriated next year.

$4.4 million was appropriated to the Public Safety Department. Since no new programs were created with this money nor any new positions created, this money is being used as a stop gap to lessen Vermont's budget deficit problem.

$2.15 million will go to VEDA to set up a venture capital fund to help early stage Vermont businesses.

$1 million will go to VEDA for a Vermont Jobs Fund to help otherwise healthy businesses weather tight credit conditions caused by the recession.

$200, 000 will go to the department of economic development for operation of the Vermont Training Program.

$500,000 will go to the department of tourism and marketing.

$100,000 will go to the Vermont Sustainable Jobs Funds for the Farm-to-Plate Investment program.

$150,000 will go the Vermont Sustainable Jobs Funds for operation of the funds.

Since the Governor will almost surely make a recommendation for the remaining $8.6 million to the next session of the Legislature and since the Legislature will certainly appropriate that money, you do have a voice in how the money is spent next year. You'll probably have a hard time making the case that it should be spent for a specific project in your town since it won't cover very many local projects but you can certainly try. You can advocate for statewide projects, for economic development, or to use the rest of the money to plug one more year of budget gap. The right people to contact with your recommendations are the Governor and your elected representatives.

An AP story on this subject is at http://www.rutlandherald.com/article/20090610/NEWS04/906100378.

An earlier post on the most popular money in the stimulus bill is here.

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