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State prepares for federal money

BY SHAWN GUDE | FEBRUARY 17, 2009 7:40 AM

With billions of dollars in stimulus money set to flow into Iowa, officials are anxious to fund coveted infrastructure programs and shore up the state’s budget.

But they’ll have to wait a few more days.

Although President Obama is set to sign the $787 billion stimulus bill into law today in Denver, lawmakers and bureaucrats won’t know the allocation process or the bill’s stipulations until at least the end of the week, Sen. Bob Dvorsky, D-Coralville, said.

“A lot of it depends not only on the actual amount, but what the flexibility is in using the funds,” Dvorsky, the chairman of the Senate Appropriations Committee, said.

Rep. Dave Jacoby, D-Coralville, said the Legislature will generally be responsible for determining spending priorities and match requirements.

According to early estimates from the Federal Funds Information for States, Iowa will receive just under $2 billion from the massive bill. The largest chunk of that will be allocated to Medicaid funding, and a significant portion will go to buoying the state’s education budget — roughly $387 million — and spending on highways and bridges — $358 million.

Dan Franklin, policy and legislative services director for the Iowa Department of Transportation, said his agency has already started identifying so-called “shovel-ready projects,” which could be started within the next 120 days.

Both state and local governments will be tasked with identifying such projects — which could range from pavement to safety projects.

“The list goes beyond what funding we may have available,” Franklin said.

States were set to receive even a larger influx of stimulus cash, but moderate U.S. senators from both sides of the aisle hammered out a deal last week that gutted billions of dollars from the package.

Still, Dvorksy and others remained sanguine about the effectiveness of the bill and its ability to bolster the stricken state budget despite contentions on the left that the package included a paucity of state aid.

“Anything would be helpful,” Dvorsky said.

Iowa Gov. Chet Culver also backed the bill.

“The recovery package marks an important point in time when it comes to addressing the economic downturn caused by past policies from Washington and practices on Wall Street,” he said in a statement. “This recovery package is a major step to bring America’s economy back to life.”

With about $2 billion set to come into the state, officials agree the key now is to avert a slow-moving, red-tape disaster. Jacoby said lawmakers will work with the state’s U.S. congressional delegation and “look at some waivers so we don’t have to jump through so many hoops.”

For his part, Culver is putting together several state agency working groups that will help assure the funds are maximized and distributed in a timely manner. He will also meet this weekend with other governors at the National Governors Association confab in Washington, D.C., to discuss the package.

Troy Price, Culver’s press secretary, said the bill’s “use it or lose it” provisions will also speed up the process.

Franklin was optimistic about his agency’s ability to distribute the funding as well.

“We don’t want it to get caught up in red tape, and we don’t believe it will,” Franklin said. “There will be a lot of reporting required as a part of the accountability and transparency provisions of the bill, but, no, we don’t anticipate red tape being a problem. The intent was to get out the money and create jobs, so that’s what we’re going to do.”


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