Sanders: Stimulus funds had big impact in Vermont
Toolbox
By Louis Porter
Vermont Press Bureau - Published: July 28, 2010
MONTPELIER – In an effort to get a handle on the overall effect of the federal stimulus program on Vermont, U.S. Sen. Bernard Sanders’ office has been working to get a rough idea of what the massive program meant in the Green Mountain State.
The end result is a survey of the dozens of programs in the $862 billion American Recovery and Reinvestment Act that could amount to as much as $1.3 billion – and perhaps 7,000 jobs by the report’s estimate – for Vermont over a period stretching two years.
Roughly 6 percent of Vermonters are now counted as unemployed and “there are many, many more who are underemployed or have given up looking,” Sanders, an independent, said.
Part of the massive stimulus package, designed to reduce job losses during the recession, increase investment in infrastructure projects and spur consumer and business spending, was a variety of tax breaks.
Among the many provisions in the stimulus package that affected Vermonters was a tax cut of $400 a year for two years, shared by as much as 95 percent of the state’s residents, Sanders said.
That could mean as much as $1,600 for a two-income family over the two years, he pointed out.
In addition, nearly 126,000 senior citizens in Vermont received a one-time payment of about $250 in 2009, while another 14,000 families were able to claim more federal tax credits for children in college, Sanders said.
“Almost everybody in the state of Vermont in one form or another has received a tax break,” he said. “If you are putting more money into the hands of working families, they are going to go out and spend that money. When you make that investment you are in a sense creating other jobs in your community. Almost everybody has benefited in one way or another.”
Then there are the direct investments from stimulus projects, from roads and bridges to broadband Internet projects and smart-grid spending.
More than $50 million in money for upgrading the state’s electricity grid has just begun to get out into the economy, said Tom Evslin, who was in charge of stimulus money for the state before moving on to other tasks in the Douglas administration.
The $48 million for “middle mile” telecommunications projects recently announced is even further from hitting the street.
“Those are considerable amounts of money, but the telecom money hasn’t gotten into the economy at all and the smart-grid money is just starting to get into the economy,” Evslin said.
On the other hand, the money for highway projects was “a win all the way around,” Evslin said.
“We got very low bids on those projects so we managed to get more work done than we would have if the economy had been more robust,” he said.
Of the roughly 7,000 Vermont jobs his office counts as being created or saved by the stimulus money, 809 are on the road projects around the state, funded with $143 million, Sanders said.
Another $50 million is slated to go into the state’s rail system, while about $140 million is going into energy projects.
Approximately 81 jobs were created by the $17 million spent on weatherization programs, according to a draft of the report.
There are other kinds of projects as well, including a $10 million expansion in Burlington and a new dental clinic in Plainfield, Sanders said.
“Every community health center is receiving funds to expand, to improve services,” he said.
Finally, there were the millions in Medicaid money and education spending that went to Vermont. “It made it possible for the state to not cut even more,” Sanders said.“The stimulus package clearly has not solved the financial problems facing this country,” he said. But it is “one of the factors in taking us out of what could have been a much worse recession than we have been in.”
But there is far from universal agreement.
“It is a huge point of debate among economists right now and it probably will be for, oh, the next 50 years,” said Economist Arthur Woolf. “You can easily find economists who would argue there has been no effect of stimulus.”
It is hard, since the economy is not a laboratory where one factor can be changed at a time, to separate out the effect of the stimulus package from other measures undertaken by the Federal Reserve Bank, like establishing interest rates at close to zero, Woolf said.
And there is the fact that much of the money was borrowed by the country.
“It means the federal government is more and more in debt,” he said. “Are people forward-looking enough to realize their taxes will be higher in the future.”
Among those jobs funded with ARRA money is Kate Dowling’s.
Dowling, who now lives in Montpelier, had been working for Vermont Technical College in a grant-funded position before she lost her job.
She was out of work for about two months before landing her new job – paid for through stimulus money – in March at the Central Vermont Community Action Council.
That job, at a portion of the agency called Vermont Green, helps coordinate job training in renewable energy or other “green” industries with businesses, other nonprofit groups and other individuals or organizations.
State budget writers are keenly aware of the looming end of federal stimulus money sometime next year, and so are those whose jobs are funded through the program.
“We are looking at different ways of making this a sustainable project,” she said. At the same time “we definitely don’t want to reinvent the wheel.”
But Dowling, one of several Vermonters profiled in the Sanders report, is optimistic about the future for the kind of work she is doing, whether the ARRA funding remains.
“I think it is tending to increase, I think there will be room for more positions if anything,” she said. “That is my hope, anyway.”
22