Nov/Dec 2009

State News: August 2009



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Stimulus Money Brings Confusion

By Kelley Arnold, CSG Membership Outreach
As stimulus dollars continue to be funneled into state budgets, Republicans and Democrats, governors and legislators can all agree on one thing: Many aspects of the American Recovery and Reinvestment Act remain unclear.
Communication between the different agencies and levels of government will play a key role in clearing up those questions and ensuring states benefit from the Recovery Act, according to speakers during a Web conference sponsored by the National Governors Association and The Council of State Governments.
Governors across the country appointed stimulus czars or set up official recovery offices after President Barack Obama signed the Recovery Act in February. But as federal agencies begin to release funds, the lines of reporting are starting to blur.
“In a number of cases, agencies of the federal government are working with individual state agencies, but we are pushing for (federal agencies) to communicate with the governor’s people—both the budget officers and the leads the governors have put into control of the recovery package,” Ray Sheppach, NGA’s executive director, said during the Web conference.
The information flow is not a one-sided problem. As states work toward the first federal reporting deadline in July, many leaders are left wondering how to package the data so that it meets federal reporting requirements.
“A lot of separate entities, between the Hill, (the Government Accountability Office), the administration, (the Office of Management and Budget) and separate agencies, are all requiring their own reporting,” Sheppach said.
Scott Pattison, executive director of the National Association of State Budget Officers, said states are collecting required reporting data in different ways, “since there is no prescribed way to go about dealing with the funds.”
Because both state and local entities can apply for competitive grants, Pattison said communication between state and local agencies will be crucial. “States will be responsible for reporting on local fund usage when it flows through the state,” he said, “but it will be up to the state itself to track all the funds including those that flow indirectly.”
So while states will be required to report on funds they grant to cities and municipalities, they will not realize the overall economic impact unless they also track money granted to local governments directly from federal agencies.
“We have to be mindful as we think about ARRA and how we are working with local officials to have a seamless transfer of information,” said David Adkins, executive director/CEO of The Council of State Governments.
One of the most controversial aspects of the Recovery Act has been the amount of power the executive branch has in making appropriations. This has left legislators across the country trying to figure out where they fit into administration of funds.
“Legislative committees are wrestling with the role of legislators in the process,” Adkins said. “Legislators have interest in how the stimulus affects their districts. They are getting pressured by their local constituents.”
Adkins expressed hope that executive branches would reach out and actively engage legislative branches. This has happened in many states through executive order, interbranch working groups or joint meetings. But many are still working to find a balance between the branches.
As the first reporting deadline approaches, communication gaps are not the only problems state officials face. Administrative costs, grant cycle announcements, reporting templates and data standardization remain gray areas. Organizations such as CSG, NASBO and NGA are working with both state and federal officials to provide frameworks and guidance to help navigate the Recovery Act.
NGA and NASBO meet regularly with federal officials to convey the concerns of those offices and individuals responsible for both administration and oversight of stimulus funds. In addition, the two organizations jointly publish State Economic Review, a monthly publication that examines states’ economic situations. Both organizations are also in touch with membership to answer questions and monitor any concerns.
CSG has set up This Web site is designed to help states rapidly decipher potential funding opportunities, and share best practices by tracking how the executive, legislative and judicial branches of state government are responding to and impacted by this historic legislation. CSG also stays in communication with federal officials via its Washington, D.C., office.


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