Friday, February 20, 2009

"I'm personally not convinced about the decisions that are being made without any oversight and transparency."

Pace of Texas stimulus spending called 'staggering'


The Dallas Morning News
Copyright 2009

AUSTIN – Thanks to the federal stimulus package, the state budget deficit is all but erased and the Texas economy will see a quick injection of up to $70 billion. But oversight needs to be slammed into place quickly as the money begins flying, state lawmakers said Thursday.

Rep. Jim Dunnam, D-Waco, said he was 'stunned' by next Thursday's goal.

A special committee looking at the stimulus money began peeling away the numbers and recognizing the usually glacial pace of government has been shot into a speed boat, so lawmakers need to react quickly to guarantee that the funding is well-spent.

"That's staggering," said Rep. Jim Dunnam, chairman of the special stimulus committee as he ticked off the flood of funds. "And I'm personally not convinced about the decisions that are being made without any oversight and transparency."

The money is a windfall for state budget writers, who had anticipated making cuts throughout government to balance the budget. Now, they can expand health care for the poor, build roads and expand programs ranging from child care to education technology.

But Dunnam, D-Waco, and other lawmakers immediately jumped on $2.3 billion for roadway projects that are slated to be approved by the Texas Transportation Commission next week. But lawmakers don't know which ones they are.

"I'm not picking on TxDOT, but I was stunned to learn that their goal is to obligate 100 percent of the money next Thursday," he said.

The Texas Department of Transportation is still compiling its final list of the selected "shovel ready" projects. The states have 120 days to submit those projects to federal transportation officials for approval and funding.

More than $1.5 billion of the money is for state highway projects designated by TxDOT and an additional $700 million will be allocated to regional transportation groups to use on local projects they have selected.

The planning has been going on for four months, and most of the priorities were set by local authorities, said Deirdre Delisi, chairwoman of the transportation commission.

"The list was based on whatever the criteria was set in the [federal] bill," she said. It is moving quickly, but that is needed to reassure construction companies poised to lay off workers that projects are in the works and will start soon.

"The whole point was to get people working again," Delisi said.

Dunnam said that TxDOT will brief lawmakers next week on the selected projects in their districts but that he feels the money is being allocated too quickly, pointing out that the state has at least three more months before it has to submit the list to federal authorities.

"These are the kinds of decisions that are being made while some of us are still trying to get a copy of the bill," he said.

In the stimulus, about $17 billion will be coming directly to Texas for existing state programs in education, transportation, health and assistance areas. An additional $27 billion will go to local government projects and private entities for things such as energy efficiency. And about $27 billion will be forthcoming in tax breaks to Texans earning less than $75,000, according to Legislative Budget Board estimates.

State lawmakers still must determine if they want to draw down even more funding by changing laws and policies, if only for a year or so.

For instance, the state could receive an additional $560 million for laid-off workers if it covered part-time employees with unemployment insurance. Private businesses are assessed fees that cover the insurance costs, and to keep those fees low, Texas has chosen to limit the coverage.

The Legislative Budget Board, which provides spending numbers and analysis, told lawmakers Thursday that an additional $5 billion will be coming from Washington to bolster payments to those on Medicaid. It means that Texas can now use those federal funds to fill a large state budget hole because of growing caseloads under the program that, along with a state match, provides health coverage to low-income Americans.

After the 2001 recession, states got $20 billion, half of that to defray costs for Medicaid. The current plan will send states $87 billion for Medicaid alone.

"This is clearly a new world," said John Thomasian, the National Governors Association's director of best practices, at a panel discussion Thursday in Washington. "This is an unprecedented flow of funds to states, through an almost unprecedented number of spigots."

It is exactly the problem state lawmakers need to grapple with in the coming weeks, Dunnam said at the inaugural committee meeting on the stimulus oversight.

It's imperative that taxpayers don't re-experience that "sick feeling I got in my stomach," after learning that bankers used their federal bailout for executive bonuses and posh retreats, he said.

"We've got to wisely use this one-time resource," he said.

Staff writer Todd J. Gillman in Washington contributed to this report.

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