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All Politics is Local

 

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February 2009

 

Welcome to another edition of All Politics is Local, a non-partisan unbiased selection of local political news from Orange, Riverside, San Bernardino, and Imperial counties.  In this issue we provide insight from local community leaders on how the federal stimulus package may directly impact us at the local level.

 

THE FEDERAL STIMULUS PACKAGE - WHAT'S IN IT FOR ME?

 

The daily dose of news coverage on the federal economic stimulus package clearly demonstrates the partisan atmosphere our public officials are faced with in dealing with the national economic crisis.  While we all may have an opinion on what government should or should not be funding, it is clear the federal package will have programs and tax incentives totaling billions of dollars in funding to stimulate the economy. 
 
We are tracking what's in the federal package that will directly impact our local businesses, public agencies, and residents.  We have been talking with local leaders in order to drill down and get a local feel for what programs in the federal package could be coming our way to help jump start our own local economy. 
 
The following comments are based on what is currently in the House or Senate version of the economic stimulus package.  The situation is fluid.  And, it is being hotly debated as we are about to go to print.  Needless to say, the following comments and the status of the funding and the programs are subject to change.    
 
We will keep following this story closely over the course of the legislative progress.   
 
Meanwhile, we asked community leaders for their insight on what's in the package to learn what's possibly in it for all of us in Orange, Riverside, San Bernardino, and Imperial counties.

 

 

(some sections of this newsletter were printed in Busines and Politics: On the Record by Christine Iger, 2/10/09, The Public Record, www.desertpublicrecord.com)

 

 

RIVERSIDE COUNTY PERSPECTIVE

 

Stanley Sniff, Sheriff, Riverside County:
 
"The current package has approximately $4 billion in grants to state and local law enforcement to hire officers and to purchase equipment.   This has been proposed to assist states under extraordinary budget pressures, like our own, from laying off workers in vital law enforcement services.  
 
In contrast to earlier federal programs, this one is expected to last only two years to avoid long term obligations.  We do not know whether in its final form if it will require the 25% local match in funds that those earlier federal programs require, and we would certainly hope not.  
 
In another arena, this federal stimulus package will also allow Riverside County to recoup some funds in its new regional detention center project through energy funding, better leveraging our local dollars.    
 
These are all very welcome within our criminal justice community, and funding for hiring deputies and local police officers for our communities is sorely needed now throughout Riverside County."

 

 

Rick Bishop, Executive Director, Western Riverside Council of Governments:

 

"Western Riverside County should see significant opportunities for job creation from the Federal Economic Stimulus Plan as a result of funds for highway infrastructure, energy efficiency and conservation programs, workforce investment programs, and community development funding making their way to the region.  With one in every 10 workers in Riverside County out of a job, and foreclosure rates being the third highest in the nation, Riverside County is ripe to receive a significant portion of the stimulus funds to retrain those out of work to find new careers in growing fields such as green collar jobs, healthcare, and infrastructure construction."


 
Glenn Southard, City Manager, Indio:
 

"In order to be successful in combating this recession, it is critical that the federal economic stimulus money get into the economy swiftly. This objective is conflicting with federal guidelines, which are slowing
down the money.  
 
Since last November, the U.S Conference of Mayors identified $63 billion "ready to go" projects in more than 400 cities.  This means these projects received all environmental, planning and air quality permits to qualify under the American Recovery and Investment Bill of 2009. However, the federal government is looking to require National Environmental Policy Act (NEPA) standards on top of the already approved environmental clearances.  Also, they are looking to revise state, regional, and local planning documents all the while making us adopt new air quality standards that we have yet to see.
 
The reality is that we need a speedier and less restrictive economic stimulus plan.  This money needs to get into the economy and out of the hands of bureaucrats.
 
We have over 35 projects that are ready to go, which includes bridges, road improvements, highway improvements, new public facilities, and water infrastructure.
 
I've included the following to show you a few of the projects that economic stimulus funds could put under construction.
 
(1) Increase capacity and install modern safety improvements at several streets throughout the city, which is a part of our street rehabilitation program. 
 
(2) Modernize and repair two bridges in the City, which includes seismic retrofit of the Jackson Street Bridge at Union Pacific Railroad and the bridge at Indio Boulevard at the Storm Channel. 
 
(3) Install traffics signals at both east bound and west bound off ramps at Monroe Street and Interstate 10 with resurfacing of Monroe and its supporting ramps.
 
(4) Improve storm drain capacity by installing new line along Avenue 44 from Aztec Street to the White Water Storm Channel, which will resolve water drainage issues along this important city arterial."
 
 
Jerry R. Patton, Superintendent/President, College of the Desert:
 
"We are experiencing 15 - 20 percent increase in enrollments this spring.  People are returning to college to find or renew skills they feel are needed to be competitive in this unusual economic crisis. With the county's unemployment rate now at 9.3%, many county residents are desperate for work. However, community colleges are reaching their maximum capacity to serve this large increase in enrollments.  The provisions of the federal stimulus package could help community colleges to leverage their capacity and ability to assist in the effort to rebuild our economy.   
 
Specifically, H.R. 1 provides:
 (1) $39 billion to local school districts and public colleges and universities, distributed through existing state and federal formulas; $15 billion in incentive grants to states as a reward for meeting key education performance measures; and $25 billion to states for other high-priority needs, such as public safety and other critical services, which may include education.
 
( 2) $15.6 billion for Pell grants, which will increase the maximum by $500 in the 2009-2010 academic year and by $500 in the 2010-2011 academic year.
 
( 3) $6 billion to improve and modernize higher-education facilities.
 
(4) $750 million for a new program of competitive grants for worker training, of which $500 million is designated for projects to prepare workers for careers in energy and renewable industries. 
 
(5) Also, the Hope Scholarship tax credit is being revised and enhanced.  The new credit will be $2,500 rather than the current $1,800. It will also allow students to receive the credit for "supplies," which includes books and equipment (currently the credit can only be used for tuition expenses), and is 40% refundable, which will help low-income students qualify.
 
(6) The largest provision of funding would be the state Fiscal Stabilization Fund, in which California would get $8 billion.   Sixty-one percent of that fund is dedicated to K-16 on a "use it or lose it" basis over two
years.   The funding will flow from the Federal Secretary of Education to the governor of each state and be moved through the annual budget process in concert with the governor's plan for distribution that was approved by the Federal Secretary.  Higher Education is directed to use the funds to "mitigate the need to raise tuition and fees for in-State students".  The language stipulates Higher Education may not use that provision's funding to increase endowments or for capital outlay. Under the Modernization, Renovation and Repair provision, $6 billion is included for Higher Education -- preliminary estimates fall between $300 million to $400 million for community colleges in California, depending on the eventual formula agreed upon. 
 
(7) Additionally, community colleges will benefit from the $15.6 billion included to increase the Pell maximum grant by $500, for a total of $5,350 for 2009-10.  The House version also includes $490 million for Federal Work Study programs and increases limits for unsubsidized Stafford loans by $2,000.  For College of the Desert, the significance of this funding would allow increased worker training programs in energy, sustainability and green-clean technology.  The increased funding could be used to provide facilities that are specifically designed for high-tech green programs. The increase in Pell Grants as well as the Hope Scholarship tax credit will provide relief for students whose financial ability is limited to obtain an education to increase their standard of living."

 

ORANGE COUNTY PERSPECTIVE

 

William Habermehl, County Superintendent, Orange County Department of Education:

 

1. Individuals with Disabilities Education Act (IDEA):  Last year, Orange County School Districts contributed $313 Million from their General Funds to subsidize insufficient Special Education funding from State and Federal sources.  The stimulus bill would reduce the Special Education encroachment by 1/3 over the next two years.  We strongly support this provision of the bill.
 
2. School Facilities - Repair and Modernization:  In comparison to the House version, the Senate Bill would eliminate all funding for facilities repair, renovation, and construction.  Orange County School Districts would have received $80 Million under the House version.  We strongly support the House version of this bill.  The funding under the House Bill would help school districts fund much needed repair, renovation, and modernization of school facilities. 
 
3. State Fiscal Stabilization: The House version provided $79 Billion for State Fiscal Stabilization.  However, the Senate Bill reduces this amount by more than 50%, or $40 Billion.  This means that Orange County School Districts would receive approximately $200 to $250 Million less fiscal stabilization funding than that proposed in the House version.  Given the national and global economic crisis which has resulted in less tax revenues to states, we strongly support the House version of this bill.

 

 

Troy Butzlaff, City Administratror,  City of Placentia:

 

The City of Placentia has a number of projects that are ready to go, including enhancement, rehabilitation, maintenance, and capacity expansion projects.
 
The following is a sample of a few federal economic stimulus proposed projects:
 
(1)   Enhancement project - Placentia Metrolink station parking structure (project cost is $14, million).
 
(2)   Rehabilitation Project - Golden Avenue Bridge replacement (project cost is $1.5 million).
 
(3)   Capacity Expansion Project - Citywide master plan sewer capacity enhancements (project cost is $4 million).
 
(4)   Rehabilitation Project - Orangethorpe Avenue widening and rehabilitation from Kraemer Boulevard to east city limits (project cost is $4.8 million).
 
We have been working closely with our two Congressional representatives, Caltrans and the Orange County Transportation Authority to promote these "ready to go projects" that will create up to 472 jobs, help stimulate the economy and make significant capital improvements within the community.

 

SAN BERNARDINO COUNTY PERSPECTIVE

 

Ken Willis, Upland City Councilman and Chairman Public Works Committee:

 

"This program is to include funding for "shovel ready" public works projects.  That sounds good on face value, but few projects can be defined as "shovel ready" for the following reason: Shovel ready means that a project has clear deed and title to property, has been engineered and is ready to go to bid. Most projects remain on the drawing board until such time as they are ready for funding.  This would include "engineering."  It is not prudent for a local public agency to spend money on the engineering until you know for sure you've got the money.  Otherwise you could very well spend a few million dollars on planning and engineering only to find later that you haven't the funding for actual construction.  Much larger agencies may be different, wherein they have the budget to fund engineering because no matter what, they will eventually build the project.  But, the rules can always change within a few months, thus making it risky to do the engineering prior to confirmation of funding.  Agencies that may have an acceptable project have 90 to 120 days to do the engineering... in reality that is slicing it close.
 
So, I'd say there is some confusion over the definition of "shovel ready" for many smaller public agencies.   Smaller agencies should be targeted by the Fed's because it is a sure way of spreading the wealth where it may be needed most."

 

 

David Ackerman, President, DGA Associates, Sacramento (commercial construction industry):


"The interesting point to all of this is how the money will be allocated, whether it's discretionary or through existing formulas.

 

For instance, the House version of the package has over $46 billion for transportation infrastructure, including: $30 billion for bridge and highway funding, to be distributed by existing formulas with a portion of the funds within each state being sub-allocated by population areas.  $12 billion is for transit funding, with new construction being distributed on a discretionary basis, and upgrades, repair, and other assistance being distributed according to existing formula.

 

There's also $3 billion for Airport Improvement Grants, distributed on a discretionarybasis."

 

IMPERIAL COUNTY PERSPECTIVE

 

Fred Bell: Executive Officer, Building Industry Association, Desert Chapter:
 
"The housing industry has basically collapsed in the wake of a credit crisis. While Congress works to reduce mortgage foreclosures, they must also provide incentives that will bring home buyers back into the marketplace. Providing a home buyer tax credit that could be applied toward a down payment will make a huge difference here in the Coachella Valley. 
 
The good news is that on Wednesday, the Senate voted to give a tax credit of 10 percent of the value of new or existing residences, up to a $15,000, in the current debate on the elements of the federal economic stimulus bill.
 
If the tax credit holds up as Congress continues its debate, it would be a huge shot in the arm for the housing industry, since current law provides for a $7,500 tax break but only for first-time homebuyers.  The Senate's vote allows a tax based on local housing prices, ranging significantly higher than the current $7,500 which used to be only available for first-time purchases.  It would go to all home buyers, with income limitations; and it would not need to be repaid.
 
Democrats readily agreed to the tax credit proposal, although it may be changed or even deleted as the stimulus measure makes its way through Congress over the next 10 days or so."

 

We hope you enjoyed this issue of our Newsletter!

 

Sincerely,

 

Iger & Associates Team

 

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