What Does Rhode Island Get Out of This?
[This post should in no way be interpreted as an acceptance or approval of the “stimulus” bill furiously being worked out in Congress. The premise that massive government spending can lift or save an economy is a non-starter; most of the line-item spending in the bill qua economic stimulus is an absurdity. In short, this and all “stimulus” bills should be killed.]
Budgeters on the state and local level have been holding their breath and postponing important decisions, pinning their hopes on the state aid expected to flow out of the “stimulus” package pending in Congress.
CBS News Political Hotsheet provides the AP’s listing of how the $789b will be doled out. Setting aside targeted monies – $87b for Medicaid, $46b for transportation projects, etc – below are the line items that might remotely fulfil wishful budgeters dreams.
$8 billion in aid to states to defray budget cuts
* * *
$47 billion in state fiscal relief to prevent cuts in state aid to school districts, with great flexibility to use the funds for school modernization and repair
* * *
$26 billion to school districts to fund special education and the No Child Left Behind law for students in K-12
Items two and three would flow directly to the local level. But in actuality, they are targeted funds as well and must be spent on specific education spending items.
Really, only the first item of $8b is discretionary. And remember that states may choose to keep the entire amount at the state capitol and not share with cities and towns.
Rhode Island and the United States have populations of around a million and 304,000,000 correspondingly. If the $8b is divided among the states on a per capita basis, it looks like $26,315,000 in “discretionary” funds is headed to Rhode Island. [Feel free to check my math.] So. If this bill passes, would $26m have been worth the wait? Would it cover all postponed budgetary decisions? Last but not least, how will the Rhode Island General Assembly divy this $26m?
In today’s ProJo, Steve Peoples and John Mulligan peg the total coming to Rhode Island at $825 million and make a good point about the targeted funds.
Roughly $425 million will go to Rhode Island Medicaid programs over the 27-month life of the emergency bill, which will free up hundreds of millions of dollars for other causes. And the state could get another $400 million over two years for local school districts, with few restrictions on how it is spent.
Differences are emerging as to how will these one-time funds should be spent.
Even though the package hasn’t yet cleared Congress or been signed by President Obama, whispers have already begun to fill State House hallways about who will control Rhode Island’s share and where it will go.
Governor Carcieri has suggested using the stimulus to cut taxes. Assembly leaders have yet to outline a plan, but acknowledged yesterday tremendous pressure to restore proposed cuts to municipalities, hospitals and nursing homes.