Uncertainty besets Maine stimulus money

Posted Feb. 05, 2009, at 11:55 p.m.

AUGUSTA, Maine — Maine stands to receive more than $1 billion in economic stimulus money from Washington, but trying to nail down exactly how much is proving nearly impossible for the state officials planning how to spend it.

Under the $819 billion package passed by the U.S. House last week, Maine would see just more than $1 billion, according to estimates from the office of U.S. Rep. Chellie Pingree, D-Maine.

In the U.S. Senate, lawmakers Thursday were working through more than 200 amendments to the package, changing the overall cost of the bill, which was originally pegged at $920 billion. How much of that would go directly to Maine remained unclear, as moderate U.S. senators such as Susan Collins, R-Maine, were working to cut up to $100 billion from the package.

Adding more uncertainty is the fact that whatever the Senate passes will have to be reconciled with the House bill, which means more money could be cut or added to the stimulus package before it goes to President Obama for his signature.

Officials in Augusta are trying to keep track of the details. But rather than concentrate on actual dollars, they’re trying instead to make sure the money can be put directly to use on projects in Maine.

Nicole Witherbee, federal budget analyst at the Maine Center for Economic Policy, sees roughly $1.2 billion to $1.5 billion for Maine in the House bill and possibly a bit more in the Senate version.

“The bigger [the package is], the more effective it will be,” she said.

Pingree’s office, citing a report by economist Mark Zandi of Economy.com, said the House package would create or save four million jobs nationwide by the end of next year, including almost 15,000 in Maine.

It would provide Maine with $100 million for special education and programs for struggling students; $52 million for school renovation projects; almost $200 million for infrastructure projects like roads, bridges and clean water; $260 million to help state and local budgets; and $434 million for Medicaid.

Maine is attempting to be “prepared but cautious,” said Ryan Low, the state’s finance commissioner.

State agencies are making sure contracting and bidding processes are streamlined to be able to handle potentially hundreds of millions in federal funds — moving them quickly to the private sector while accounting for where the money went.

In some cases, projects are being put out to bid, contingent on federal funding. Reconstruction of Interstate-295’s northbound lanes from Topsham to Gardiner is one such project, said Greg Nadeau, deputy commissioner at the Maine Department of Transportation. The project is estimated at $35 to $40 million, and if funds come in, would put a lot of highway construction workers on the job.

“We don’t actually build the projects. The private sector does for the most part,” Nadeau said.

The theory is each employed construction worker won’t be using state systems like unemployment benefits and would instead be paying income taxes. And they’d be getting paid, putting that money into local economies by buying groceries, goods at local department stores, renting videos, and other activities that benefit busi-ness.

“Ideally, you want jobs that are long lasting and keep people employed for a long time,” Witherbee said. “But this legislation can only do so much, and it’s meant to jump-start.”

Another part of the stimulus package is funding to help people who have been hurt by the economy through investments in Medicaid, food stamps and unemployment benefits. According to Pingree’s office, under the House bill, 70,000 Mainers would see an increase in unemployment benefits, and 185,000 would see an increase in food stamps.

In at least one version of the Senate bill, Sen. Olympia Snowe, R-Maine, secured Medicaid funding that’s only slightly less than the House’s sum.

As a result of Snowe’s provision, Maine would receive up to $420 million in additional federal Medicaid assistance

“With states looking at combined budget ‘gaps’ of $350 billion over the next two years and the resulting, profound national impact on our overall economy, I believe this increased … funding is warranted and will certainly go a long way toward strengthening health care services in Maine,” Snowe said in a statement.

Mark Gray, executive director of the Maine Education Association, the union representing teachers, said he’s been trying to keep abreast of the ever-evolving Senate package. The state cut $27 million from Maine schools in its current budget. If the federal stimulus package is resolved quickly, layoffs may be prevented, he said.

“It’s an immediate way to save jobs,” he said.

Both the House and Senate proposals include tax credits to home buyers and other programs that are not in the form of direct funds to states. The goal of those proposals would be to spark interest in the depressed housing market, which was a major contributor to the current recession.

But some experts are skeptical the tax credit alone would spur people to buy houses, especially when people are having difficulty obtaining mortgages.

“I don’t think that’s going to do a whole lot,” said Ken Hall, owner of Maine Coast Properties in Scarborough.

The best thing that can happen is that Congress gets money to the states, which in turn get money into the private sector through projects, Hall said.

“If they can get the money into the system,” Hall said, “things will start improving.”

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in State