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Nevada stimulus spending is election focus but effectiveness in dispute

By ThisIsReno

By Sean Whaley, Nevada News Bureau: The question of how well the Gibbons administration has done in quickly and efficiently deploying Nevada’s share of stimulus dollars is difficult to quantify.

Gibbons, a Republican who is leaving office in January, was criticized by Rep. Dina Titus, D-Nev., in a debate Wednesday for failing to move quickly to spend stimulus dollars. Titus said the bottleneck was not at the federal level, but at the state level. Congress specifically chose to put the money into existing programs to get it moving quickly to create jobs, she said.

Gibbons defended his handling of the nearly $2.5 billion in stimulus funds awarded to the state so far, saying: “The stimulus funds awarded to Nevada were spent and are being spent as expeditiously as possible in order to create as many new jobs as possible.”

Nevada’s American Recovery and Reinvestment Act website shows the state has actually received and spent about $2 billion of the total awarded through June 30, 2010.

The majority of the stimulus funds received by the state have already been spent not on job creation projects, but on Medicaid caseloads and jobless benefits. Three jobless related programs alone account for nearly $1.3 billion in total spending in Nevada.

Titus is not alone in her criticism of Nevada’s efforts under Gibbons to quickly use stimulus funds to create jobs, especially early on in the process. The act was approved by Congress in February 2009.

In a letter to Gibbons on Oct. 1, 2009, Jim Oberstar, chairman of the House Committee on Transportation and Infrastructure, cited Nevada as a state that was not doing a good job in spending the funds, ranking 47th of 51 based on an analysis of the percentage of recovery act highway formula funds put out to bid, under contract and under way.

Nevada received about $201 million in stimulus funding for road projects.

“I strongly urge you to refocus your efforts to implement the Recovery Act and use the available funds to create and sustain family-wage jobs,” Oberstar said in the letter.

The state Democratic Party criticized Gibbons for the report as well, but Dan Burns, a spokesman for the governor, said in October 2009 the information was inaccurate. He also criticized Nevada Democratic leaders for bringing in stimulus money that put the state 50th per capita for its allocation of funding.

The Nevada Department of Transportation announced in February of 2010 it had obligated its entire stimulus funding a month ahead of schedule. The agency announced in May that stimulus funds will have created or saved 5,600 construction jobs by the end of the year.

The state was also questioned about its slow pace on spending nearly $19 million in stimulus funds for neighborhood weatherization projects. As of November of 2009, the state had spent less than $1 million and risked losing the money.

But the program moved into high gear, and Gibbons announced in May 2010 that the State Office of Energy and the Nevada Housing Division had received letters from the U.S. Department of Energy commending their efforts at quickly and efficiently spending the stimulus funds.

Nevada was identified as one of a small group of states that had 100 percent of its award through the environmental permitting process finished and 75 percent or more of the funds obligated.

“These accomplishments are a testament to your team’s strong planning and management,” U.S. Department of Energy State Energy Program Director Mark Bailey said. “DOE applauds Nevada’s State Energy Office for your success and commends your hard work.”

John Restrepo of the Restrepo Consulting Group in Las Vegas, said the Gibbons administration may have been slow in getting going on spending the stimulus funds, but that the state has probably done as well as any other in getting the money into the economy.

Restrepo, who also serves on the State Economic Forum, a panel charged with predicting Nevada’s tax revenues for the next two years, said for him the bigger issue with the stimulus is whether it was big enough.

“In my humble opinion it was not large enough,” he said. “It was a tepid response in adding employment and addressing the longer term problem of our antiquated infrastructure.”

What can’t be proved conclusively about the stimulus spending is whether the state and national unemployment pictures would be worse without it, Restrepo said. Speaking as an analyst, Restrepo said he believes the recession would have been worse without the funding.

“The stimulus did some of what it was supposed to do,” he said. “We could have done better.”

Nevada State Controller Kim Wallin, a Democrat, said there is no way to compare how Nevada is doing on spending its share of stimulus funds with other states because there are no uniform reporting requirements.

But Wallin, who has some oversight responsibilities for the stimulus spending, does post a weekly report on her website showing the amount received for each project and the amount spent. Some agencies have not moved quickly to spend the money, she said.

The state Energy Program, for example, has been awarded $34.7 million but expended only $16.9 million as of Oct. 15, Wallin said.

A number of wildland fire fuel reduction projects under the direction of the state Department of Agriculture show low expenditures as well, she said.

While some agencies have done a good job of obligating and expending their funds, a number of other programs do not show any significant spending yet, Wallin said.

 “The whole idea of the stimulus was to get the money spent as quickly as possible to create jobs,” she said.

Jim Groth, director of the state Office of Energy, said Nevada is in the top 10 states in terms of expending its energy-related stimulus funds. In addition to the nearly $35 million for a variety of projects and programs, the office received another $9.5 million in energy efficiency and conservation block grant funds, he said.

The state has until April 2012 to spend the money, and it will all be put to use long before that deadline, Groth said.

The projects funded by the stimulus funds, and their progress, are updated weekly on the agency’s website, he said.

The job-creation programs have different deadlines by which the money must be expended and are included on the controller’s stimulus spending webpage. Some deadlines have already expired, while other projects run through 2014.

During the Wednesday debate in the closely watched District 3 race, Republican challenger Joe Heck said the stimulus act is not working nationally or in Nevada, as evidenced by the loss of jobs and high unemployment rate. Nevada leads the nation in unemployment, which remained unchanged at 14.4 percent in September.

The September report, released Friday, shows Nevada had nearly 24,000 fewer jobs than in the same month the year before.

Titus said the situation would be worse without the stimulus spending approved by Congress.

Titus also rejected any suggestion that District 3 has seen only minimal job creation from the stimulus.

The federal stimulus reporting website shows District 3 shortchanged in job creation, reporting only 187 jobs in the three months ending June 30. But that is because most of the state stimulus money flows through the state capital in Carson City, so the jobs are counted in District 2, represented by Dean Heller, R-Nev., who voted against the stimulus bill. The district shows 8,674 jobs created during the same period.

Nevada District 1, represented by Shelley Berkley, showed 439 jobs created.

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