States Set to Use Stimulus Funds
By Mikel Chavers, CSG Associate Editor
Show Missouri the money.
The day President Barack Obama’s pen hit the paper as he signed the American Recovery and Reinvestment Act into law Feb. 17, the Show Me State pulled the ripcord on a bridge project that would use money from the stimulus.
That bridge project is the first in the nation set to use the federal stimulus funds, according to the Missouri Department of Transportation.
And other state government officials are on a similar track to using stimulus dollars quickly. The American Recovery and Reinvestment Act provides more than $300 billion in potential funding for states and state-related programs.
Missouri was prepared to funnel money from the stimulus for highways and jumpstart a list of waiting projects—the Osage River Bridge was the first project on the list.
“It was identified that it needed to be replaced but there just wasn’t money available for it,” said Todd Grosvenor, finance manager at the Missouri Department of Transportation. “We stack up our priorities and wherever you draw the line where the money is—those projects get funded. And this one was not in those projects. Now that we got additional money and that line was drawn at a different spot—this particular project was now able to be built.”
Missouri was able to get the ball rolling on the project so quickly because the project was started with state funds in anticipation of the federal dollars, Grosvenor said. The state funds used to start the bridge project were savings from other projects in the state’s road construction plan—probably amounting to a few thousand dollars until the federal funds are available, according to Grosvenor.
“We’re hoping to get this stimulus money any day now,” Grosvenor said. That’s supposed to happen within the first 21 days of the act.
And the process for funneling the federal stimulus money, at least when it comes to transportation and highway projects, is not reinventing the wheel, which may be why the first signs of stimulus action in the states has been on transportation projects.
Grosvenor said the stimulus funds in the highway area work exactly how normal federal highway aid does. That process is already set up and states put out bids for projects and go with the lowest, qualified bidder.
The only difference is, the stimulus is pumping more money into state transportation budgets.
“It’s almost like getting two years worth of federal aid in one year,” Grosvenor said. “We get the normal SAFETEAU-LU Act money and now we’ve got this American Recovery and Reinvestment Act money.”
The money isn’t an upfront grant, it’s a reimbursement. “You actually spend it and get reimbursement—it’s about simultaneously with the accounting system we have. But you have to spend it to get it,” Grosvenor said.
Missouri will get around $600 million for highway projects from the stimulus.
“We don’t technically get that money until we expend it on a contract. So we actually pay the contractor X amount of dollars for whatever they’re doing on a progress payment basis and at the same time we pay them, we go to the federal government to get reimbursement,” he said.
Other states are getting a jumpstart on stimulus projects as well.
Just two days after Obama signed the act, New Hampshire began advertising for bids on transportation projects that will use stimulus funding, according to New Hampshire Gov. John Lynch’s office. The first is an estimated $9.5 million pavement rehabilitation job on NH Route 101. Another project was advertised Feb. 24 to build a new northbound section of Interstate 93 in Windham. Plans are to advertise and award contracts for projects using half the state’s $129 million in stimulus funds for highway and bridge projects by the end of June.
Wisconsin’s legislature has already pre-approved $300 million in spending from the federal stimulus so the state can move forward with transportation projects. Wisconsin Gov. Jim Doyle signed Senate Bill 62 into law Feb. 19.
For more on the first wave of stimulus action in the states, check out StateRecovery.org, a special service from The Council of State Governments. State News magazine will also feature a special in-depth look at how the states plan to funnel the federal stimulus funds in the April issue. Check statenews.csg.org for magazine content and more.