Tulsa World: Will $3 billion federal injection cure state's ills?

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Will $3 billion federal injection cure state's ills?
The American Recovery and Reinvestment Act's impact on Oklahoma's economy waits to be seen.

By RANDY KREHBIEL World Staff Writer
Published: 6/21/2009 2:24 AM
Last Modified: 6/21/2009 3:51 AM

Search a list of Oklahoma stimulus projects

For most of us, $3 billion is a lot of money.

It's enough to hire 85,714 teachers, at $35,000 each, for one year.

Enough to buy 30 billion Pixie Stix, 1.5 million iPhones, or 120,000 American-built hybrid sedans.

But is $3 billion enough to put a jolt in Oklahoma's $146.5 billion economy? That's what we're about to find out.

Officially, Oklahoma has been allocated $2.6 billion of federal stimulus money under the American Recovery and Reinvestment Act, but that total does not include such things as $137.4 million being spent on state military bases — chiefly Fort Sill and Tinker Air Force Base — or $83.3 million allocated to Oklahoma Indian tribes through various federal programs.

It also doesn't include $70.8 million in Army Corps of Engineers projects in the state, $7.8 million being spent by the Department of Interior, or $3 million by the General Services Administration to replace all the windows in Tulsa's downtown Federal Building.

It also doesn't include Oklahomans' share of increased unemployment benefits — $15 million through May 31 — $288 billion in

tax cuts and credits or individual participation in such things as a Small Business Administration loan program and a Defense Department program to help personnel and civilian employees sell their homes.

So, everything taken together, $3 billion seems a reasonable estimate for the recovery act's initial shot to Oklahoma's economy.

And what are we getting for $3 billion?

Hundreds of entities and perhaps more than 1,000 have been allocated stimulus money.

The list runs from $390.86 for disadvantaged students at Kildare Public Schools to $272.2 million for Medicaid.

Just about every item on it could be questioned — and justified.

There's $6 million to repair a dam at Fort Sill, $3.9 million for job-search assistance and $13,120 for the Roosevelt, Okla., Housing Authority.

The National Park Service is getting $41,000 to replace a fence at the Washita National Battlefield. Low-income Oklahoma college students will have an additional $85 million in Pell Grants available. Road projects, including those under the purview of the Corps of Engineers and Interior, total more than $550 million.

It's certain that all of this will have some economic impact, said Bob Ball, chief economist for the Tulsa Metro Chamber of Commerce. Measuring how much is something else entirely.

"There's no doubt stimulus money stimulates the economy," Ball said. "Whether, politically, people think we should be doing this is another issue."

Using the 18-month, $75 million Inner Dispersal Loop project as an example, Ball said, "The contractors hire workers, the workers buy groceries, the grocery stores hire more people. Does the effect last more than the 18 months? There is a carryover."

But, he said, it is impossible to know whether the workers would have been employed otherwise or what their earnings would have been.

Aside from concerns about the general effectiveness of the stimulus program are fears the money will not be spent as intended. Oklahoma Auditor and Inspector Steve Burrage is responsible for monitoring the $2.6 billion passing through state agencies.

"What I'm telling everyone is that they make sure they have the proper controls in place to be in compliance with federal requirements," Burrage said. "The governor had to personally certify the money would be spent properly."

Burrage said he is not as worried about outright fraud as he is having the agencies suddenly finding themselves responsible for a lot more money — and more accountability — than in the past. As a result, he has been giving presentations across the state about how to document stimulus money and how to ward off fraud and abuse.

"Without proper controls, you're inviting fraud," he said.

Under the American Recovery and Reinvestment Act, federal agencies are required to publish weekly online updates of stimulus plans and expenditures, and all states face federal audits.

"Everybody spending this money needs to understand that if it is not spent the way it is supposed to be spent, it will be pointed out," said Burrage. "There will be federal auditors coming."

Randy Krehbiel 581-8365
randy.krehbiel@tulsaworld.com By RANDY KREHBIEL World Staff Writer

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	Report Comment Travis, Tahlequah (6/21/2009 7:22:25 AM) Stimulus? Bad. Wait till inflation hits.
	Report Comment zzx375, BA (6/21/2009 8:01:24 AM) Short answer to the headline: No.
	Report Comment my view, Sand Springs (6/21/2009 9:02:01 AM) Travis, It won't be a normal inflation but hyper-inflation. When it hits Obama numbers will drop faster than a lead balloon.
	Report Comment Graychin, Eucha (6/21/2009 10:26:54 AM) The threat during a recession is DEflation, not inflation. As inflationary pressure returns, we back off of the stimulus spending and the Fed starts to raise interest rates above zero again. You guys need to read past Chapter 1 of your economics text.
	Report Comment okie ridgerunner, Small Country Town State Line (6/21/2009 12:09:09 PM) Nothing is going to cure the states ills.
	Report Comment Charley, (6/21/2009 2:02:51 PM) I think $3,000,000,000.00 should be enough for our state's leadership to sponge off, give part away, waste some, graft some & get a little building fixed somewhere, with a little asphalt parking lot.
	Report Comment Independent Thinker, Tulsa (6/21/2009 2:10:11 PM) ################################## Where is all this "stimulus" money coming from? The country was broke BEFORE Obama came into office !! And .. where are they going to get the money when Social Security goes belly up in the next couple of years. DUH! ##################################
	Report Comment Ron Ballew, Lawton (6/21/2009 5:23:59 PM) If the Federal Government gives Oklahoma $3 Billion in stimulus money you can be sure the Federal Government will take $6 Billion out of Oklahoma in increased taxes to pay for it.
	Report Comment moogle, Tulsa (6/21/2009 6:27:36 PM) That comes to about $850 for every person in Oklahoma. I prefer Big Brother keep the stimulus and I keep the $2,550 (plus government overhead) in tax payments that I will eventually have to cough up for my family's share.
	Report Comment sirwinston, (6/21/2009 10:52:50 PM) This is doing nothing for the economy. If you want to improve the economy, make it easier for people to get SBA loans that don't have high credit scores. The Credit Crunch is hurting a lot of people right now.
	Report Comment PAN, (7/10/2009 4:17:42 AM) NOPE! AND this stimulus 'stuff' won't cure the rest of the country, either. Wait and see - we are going to end up with an added tax on every single thing we buy or utilize - medicine, electricity, water, healthcare, insurance, soda, plastics, etc. and there will be an added tax on beef, chicken, pork, etc. Bigger than big government is going to totally control every citizen of this country, including how much money an individual can make. I truly believe it with all my heart and soul. I'm old and might not be around to see it, but my children and grandchildren will be and it scare the living 'you know what' out of me.
	Report Comment 52favoriteteacher, Washburn--used to be Broken Arrow (8/4/2009 9:31:16 AM) Sorry disagree Today 3 billion is like 30 million was a few short yrs ago... Like 22 cents 4 a gallon of gasoline-- Like a loaf of bread for a quarter-- Like a set of clothes for ten bucks...
	Report Comment FS, Broken Arrow (8/6/2009 11:06:21 AM) Charley understands ...
	Report Comment Centrist, close enough (8/26/2009 3:31:27 AM) The government wants inflation, they make a lot of money then. It will come along with higher taxes. Save the Stimulus...Give it Back...Our Debt is not going away. usdebtclock org
	Report Comment Harold Brookens 1, Tulsa (8/26/2009 10:20:37 PM) IN the end all politics are local. I dare Oklahoma to decline this money. With the state of our budget and the state deficits we face, the reduction in education revenue, preacher killers on the loose. Rural hospitals going under, I double dare Oklahoma to just say no.
	Report Comment flyingtheo, Broken Arrow (9/13/2009 1:59:20 PM) President Obama says that conditions have improved in the banking industry and the Treasury is stepping down emergency support programs implemented after the collapse of Lehman Brothers investment bank. Where is the financial reform Mr. Obama promised? So far, the financial reform we've seen is: 1) Bail out banks because their risky bets failed. Let them take as long as they need to pay back. 2) Eliminate the "mark-to-market" accounting rules on the assets backing their loans. Sure would be nice if everyone could value their homes as if the housing bubble didn't burst. 3) Take over Fannie and Freddie since they're GSE's. Funny how the government only gets to run this business when the business fails. 4) Have the Federal Reserve print money and buy bad loans from banks. 5) Have the Federal Reserve reduce the fed lending rate to .25%. This amounts to basically giving money to banks and letting them charge 4-5% interest on loans they make. Wouldn't it be nice if the Fed loaned money to citizens at the fed lending rate? Heck, I'd even pay 1-2% on loans. None of the above are true financial reform ... they are all band aids on a system that sorely needs to be overhauled. We really need to think long term. How about: 1) Eliminate fractional reserve banking. Banks can loan money they don't even have in this system. As much as $40 for every $1 they have. 2) Make banks keep loans they make. You think they would make risky loans if they knew they couldn't be packaged together, fraudulently graded, and sold to suckers around the world? 3) Re-install the Glass Steagall Act. Without it, commercial banks can take account deposits and gamble with the money. This type of investing should only be allowed by investment banks. 4) Re-install "mark-to-market" accounting. Assets backing loans should be valued by the free market. You should not be able to use this rule only when homes are increasing in value. You can't have it both ways. 5) Eliminate GSE's. No more government safety nets when the banking industry falters. 6) Eliminate the Federal Reserve. Stop printing money to solve financial deficits. Take back the responsibility of managing our country's money policy. The Federal Reserve is unconstitutional and they have an obvious conflict of interest ... they don't care about the American people's prosperity ... they only care about their own. 7) Re-install a gold-backed currency. Our dollar is collapsing. It's time to rebuild a solid financial foundation for this country. I'm really getting tired of being held hostage by the current one.
	Report Comment Fromtheright, Tulsa (9/24/2009 4:19:38 AM) Stimilus money is like crack cocaine to the tax eaters. When the money stops coming in the eaters are going to act worse than the zombies in the video Thriller.
	Report Comment Dowhatisright, (10/7/2009 11:13:28 AM) If the money is used to put Oklahoma citizens to work it may help ther unemployment rate.

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