Archive for Sunday, March 15, 2009

Stimulus spending

Kansas legislators must have a clear strategy for making use of federal stimulus funding.

March 15, 2009

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Members of the Kansas Legislature are right to be cautious in how they allocate the state’s share of federal stimulus funds.

Kansas is expected to receive about $1.7 billion of the $787 billion included in the American Recovery and Reinvestment Act, approved by Congress and signed by the president last month. That money could be a boon for the state or an albatross, depending on how it is used.

Portions of the money have been designated for specific purposes, including transportation, K-12 education and higher education, but within those categories decisions will have to be made about exactly how the money should be spent.

As legislators approach those decisions, they should be guided by two primary factors: The money should be directed at one-time expenditures that won’t create new programs or facilities that will require state support after the stimulus funds are gone, and top priority should be given to creating new jobs that will stimulate the state economy.

With that in mind, dedicating a portion of the stimulus funds to the many deferred maintenance projects at state universities is an ideal project. It would provide construction jobs and allow universities to complete projects that the state has been unable to fund. When the projects are completed, universities may actually see a reduction in their operating costs based on energy savings and better efficiency.

A recent study by the Docking Institute of Public Affairs estimated that every $1 million spent on university deferred maintenance projects creates 19 new jobs and generates an economic impact of $2.2 million in the state.

Examples of a poor use of funds would be to fund construction of new buildings that would add to overall maintenance costs down the road or new programs that would require new staff and additional salaries.

The same principle applies to other proposed uses of the stimulus money. For instance, highway projects that could be completed while stimulus funds are available would provide jobs and perhaps lower maintenance costs in the future.

Lawmakers should be careful to commit to spending only money the state is sure to get and not on what they hope might be forthcoming in later years. There’s no reason for state lawmakers to turn down stimulus money, but there is every reason for them to be careful how that money is used. Directing that money at one-time projects that provide jobs and address state needs could give the state economy a shot in the arm without putting an additional burden on future budgets.

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