As the $789 billion stimulus bill makes its way to President Obama's desk to become law, state officials are crunching numbers to determine how much of the package will come to Oregon.
North Coast leaders are hoping to grab a slice of the pie for infrastructure projects in Clatsop County, and there are a number of ways the money might trickle down to local residents and the wish list recently compiled by local governments.
The American Recovery and Reinvestment Act is a landmark effort to create jobs, jump-start growth and boost the U.S. economy as the nation spirals ever deeper into recession. It includes tax cuts for working and middle-class families, a $150 billion investment in the nation's infrastructure and is projected to create as many as 44,000 jobs in Oregon alone.
Oregon officials estimate the bill's State Fiscal Stabilization Fund will deliver a much-needed $569 million cash infusion into the state budget, which could be short by as much as $800 million at the close of the 2007-09 biennium June 30.
Jillian Schoene, spokeswoman for Gov. Ted Kulongoski, said so far the state has only rough estimates of how much stimulus money is headed to Oregon.
Of the estimated $569 million the state would receive through the State Fiscal Stabilization Fund, around $466 million would be dedicated to education, she said, and $103 million would be available for other programs.
"But even if we were to spend every penny of this, we still would not fill the hole we're expecting for this biennium," she said. "Cuts still will be needed."
State Sen. Betsy Johnson, D-Scappoose, who co-chairs the Legislature's Joint Ways and Means Committee, said the state budget was $142 million in arrears for 2007-09 when the Legislature convened.
Johnson and fellow lawmakers have been laboring over potential cuts to state programs since the session started in January. The Legislature held a series of public hearings last week on proposed cuts to human services, education and public safety. They got an earful from concerned citizens.
"Some of these cuts are draconian," Johnson said. "The human services one is going to be awful."
The budget crunch stems from a lack of personal and corporate income taxes flowing into the state coffers. Though the actual deficit is still unknown, projections show a severe shortfall. The next budget projection will be released Friday.
"In the next two weeks we'll have some idea of how the stimulus package buys back some of the potential cuts we were going to have to take, particularly in human services," said Johnson.
But once they've shored up the budget for 2007-09, legislators will move onto the 2009-11 biennium.
"Right now we're just reconciling '07-09," said Johnson. "As a state, we're constitutionally mandated to have a balanced budget. All we have to balance that shortfall is the blunt instrument of the cut and the hope for some mitigation from the stimulus."
The state could be making layoffs and sending notices to people about reduced services by early next month, she said.
Estimates of Oregon's share of the stimulus money over the next three years include $130 million for federally funded schools, $196 million for Oregon students in increased Pell Grants, $830 million over nine quarters for Medicaid, $190 million for food stamps assistance, $22 to 23 million in child care development block grants and $334 million for roads and bridges, about a third of which will go to cities and counties, according to Schoene.
Most of the dollars in the stimulus package have spending requirements around them and a deadline for spending them within the next three years, said Schoene. Not all the funds will be spent to shore up the 2007-09 budget.
"I don't think I've heard anyone say we should use the entire pot for this biennium," said Schoene. "We don't know where the bottom is. It's all about using a portion of it now and spreading it out over the next several years. ... Challenge No. 1 is balancing '07-09 by June 30. Challenge No. 2 is the next biennium."
Johnson said she is resisting the temptation to raid the state's rainy day fund to balance the current budget "without knowing how bad 2009-11 will be."
If the economy continues to spiral, Johnson said the Legislature might have to hold additional sessions this year to figure out how to continue funding state programs.
The federal stimulus will help the state on many levels, said Julia Krahe, communications director for Congressman David Wu, D-Ore.
State and federal agencies will funnel some of the money toward infrastructure projects such as the ones on the list compiled by Clatsop Economic Development Resources.
Meanwhile, funding for schools or unemployed workers will trickle down to North Coast residents through the U.S. Department of Education or the U.S. Department of Labor.
"Part of what this bill is trying to do is take advantage of the programs that already exist to distribute the money," said Krahe.
The state is preparing to develop competitive grant proposals to vie for billions of dollars in project funding in the stimulus bill. State agencies have compiled their own lists of "shovel-ready" projects to make use of the money as soon as it becomes available.
Rick Gardner, executive director of Clatsop Economic Development Resources, said the list compiled by local governments has gone out to state legislators and congressional representatives.
"I'm not sure who does what with it, but at least it will give them a sense of where we think the regional priorities are," said Gardner. "We're taking multiple approaches that will at least make us competitive in attracting both state and federally sponsored funding."
A lot of the stimulus funds will be accessible through the normal channels, he said, "there's just more money now."