Portsmouth, NH Refuses Stimulus Dollars

Here in New Hampshire, we have a new example of a city turning down stimulus money because of the unreasonable and expensive hurdles included in the legislation as a result of special interest giveaways:

As stimulating as it might have sounded at the time, the city recently declined $2.5 million from the American Recovery and Reinvestment Act for its new water treatment plant because federal wage regulations would have forced the city to pay more for the project.

Ranked as the fifth most pressing drinking water project in the state, the state Department of Environmental Services awarded the city $5 million in March 2009 for the project — half of which would be a grant, and the other half borrowed from the state's low-interest revolving loan fund. The award required the city issue an addendum to the request for bids, which was issued a month earlier, asking bidders to include the stimulus money in their proposed budgets.

When the bids came in, the low bidder — Penta Corporation — presented final cost of $21 million with the stimulus funds and $17.3 million without.

So the city said thanks, but no thanks, to the stimulus funds.

"It just didn't make sense," said Deputy Public Works Director David Allen. "It was going to cost us more money to take the money."

Stimulus' Education Parachutes About to Fail

As expected, with stimulus funds starting to peak and decline, local school systems are beginning to see trouble on the horizon:

Congress included about $100 billion for education in the stimulus law last year to cushion the recession’s impact on schools and to help fuel an economic recovery. New studies show that many states will spend all or nearly all that is left between now and the end of this school term.

With state and local tax revenues still in decline, the end of the federal money will leave big holes in education budgets from Massachusetts and Florida to California and Washington, experts said.

“States are going to face a huge problem because they’ll have to find some way to replace these billions, either with cuts to their K-12 systems or by finding alternative revenues,” said Bruce Baker, an education professor at Rutgers University.

The stimulus program was the largest one-time infusion of federal education dollars to states and districts in the nation’s history. As the program took shape last year, Education Secretary Arne Duncan and other officials repeatedly warned states and districts to avoid spending the money in ways that could lead to dislocations when the gush of federal money came to an end.

But from the start, those warnings seemed at odds with the stimulus law’s goal of jump-starting the economy, and the administration trumpeted last fall that school districts had used stimulus money to save, or create, some 250,000 education jobs.

Now the new studies point to the problems likely to beset thousands of school districts when the federal money runs out.

As localities though the nation, and here in New Hampshire, grapple with difficult budgeting choices, it will be interesting to see how this fight plays out when the federal government isn't there to cover over the underlying problem.

Spending Freeze...Literally

The folks at Political Math have a new video explaining that minuscule impact Obama's proposed spending freeze will have on the federal debt.

Just as interesting, look how much money we would save by canceling the remainder of the stimulus: