State poised for its share of stimulus

Posted Feb. 17, 2009, at 8:32 p.m.

AUGUSTA, Maine — The stimulus bill signed by President Obama on Tuesday will funnel billions of dollars into Maine for highway construction, education and energy programs while expanding the safety net for those left jobless by a recession that shows no signs of slowing.

Nailing down a precise dollar figure for Maine’s share of the economic stimulus is not possible because some of the money will be divvied up at a later date. But organizations tracking the stimulus bill have identified more than $2.4 billion earmarked for Maine so far, although even that figure is subject to change.

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Highlights of Maine’s estimated share of the stimulus package include:

— $130 million for “shovel ready” highway projects.

— $160 million to $198 million for local school districts and public colleges to help offset some of the recent state budget cuts.

— $116 million to increase food stamp benefits by more than 13 percent.

— $28.4 million to suspend taxes on unemployment benefits, resulting in a roughly $100-per-month increase for tens of thousands of laid-off Mainers.

— $70 million for weatherization assistance and energy-efficiency programs.

Maine also could receive in the ballpark of $300 million — and perhaps significantly more — in Medicaid funding to help the state pay off a large portion of the MaineCare reimbursement debts owed to hospitals.

Workers will also receive a $400 tax credit — and couples an $800 credit — to offset payroll taxes on the first $6,450 of income, while retirees, disabled veterans and Social Security recipients will receive a $250 payment.

“This is not the end-all, be-all solution,” Gov. John Baldacci said Tuesday afternoon after Obama signed the stimulus bill. “But I think it’s a great step forward.”

Baldacci administration officials stress there is still considerable uncertainty about how much stimulus funds Maine will receive. They are, therefore, hesitant to discuss dollar figures.

“We continue to go through the bill trying to understand all of the details. It’s an 1,100-page document and in a lot of cases all of the details are not in there,” Ryan Low, commissioner of the state’s Department of Administrative and Financial Services, told members of a legislative budget committee desperate for details. “We know a little bit more every day.”

But several organizations, including the office of U.S. Sen. Susan Collins, R-Maine, have begun to distribute estimated payouts.

The Center for American Progress, a liberal-leaning think tank, compiled a list of $2.5 billion in stimulus funds so far for Maine. At more than 5 percent of Maine’s gross state product in 2007, that would be among the highest percentages nationwide.

Both the think tank’s state-by-state analysis and Collins’ office, as well as the Senate Democratic Policy Committee, have estimated that Maine will receive more than $130 million in highway funding.

The first project will be reconstruction of Interstate 295’s northbound lanes from Topsham to Gardiner, but other projects throughout the state will quickly follow once the state has a firm dollar figure from Washington, Baldacci said Tuesday.

The Federal Highway Administration estimates that every $1 million spent on highway and bridge projects generates about 35 jobs. Using the $130 million figure, that would translate into the creation of more than 4,500 construction jobs.

Gregory Dore, president of the Maine Better Transportation Association and head of the Skowhegan Highway Department, said in a statement that the money couldn’t come at a better time for the industry.

“These are businesses that have been hit hard in the past couple of years,” Dore said. “They’ve laid off many hundreds of workers, and there was the sense that they were all scratching their heads and wondering what kind of work would be out there for their crews this year.”

Hospitals are also looking forward to receiving some of the back payments the state owes for MaineCare services dating to 2005. MaineCare is the state’s Medicaid program.

Estimates of Maine’s share of the Medicaid funding vary widely, but Baldacci administration officials said they are hoping to receive at least $300 million.

Dan Coffey, vice president and chief financial officer at Eastern Maine Healthcare System, said many hospitals, and particularly “critical access” facilities in rural areas, have been hit hard by the economy and the state’s delinquent MaineCare payments. Coffey said the cash infusion will help hospitals keep existing health care services and “stabilize” employment.

Baldacci and legislative leaders, meanwhile, are all vowing to ensure that the sudden windfall from Washington is not squandered on projects that do little to help struggling Mainers or stimulate the economy.

On Tuesday, Baldacci signed an executive order that he said grants lawmakers significant oversight and guarantees public transparency. The order directs all state agencies to brief legislative oversight committees about how every dollar of stimulus funding would be used before it is spent.

Additionally, the Baldacci administration said it plans to post information about the stimulus dollars on the state’s Web site, allowing the public to track how the money is dispensed, which firms received the contracts and how many jobs were created.

“I think it’s important for all of us to have complete access and transparency with the highest amount of accountability because these are precious tax dollars,” Baldacci said in an interview.

Sen. Kevin Raye, a Perry Republican and the Senate minority leader, said he believes the governor and legislators are on the same page. Raye said he wants to make sure the stimulus funds are used for infrastructure investments and one-time projects, not new programs.

“To me, that would be a nightmare scenario where you are setting up expectations of a new program without a revenue source,” Raye said Tuesday.

State and federal officials predict that the stimulus package could create or save 3.5 million jobs nationwide, including 15,000 in Maine. But economist Charles Colgan from the University of Southern Maine cautioned that the recession is likely far from over and that job losses could continue well into 2010.

“Unfortunately, we have lost 15,000 [jobs] and probably have another 15,000 to lose, at least,” Colgan told lawmakers Tuesday. “So on balance, the stimulus will help, but it by itself will not dramatically alter the path of the recession.”

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