Will the Stimulus Have Any Lasting Impact on States and Cities?

posted by Zach Patton

Of course we've all heard a lot about the stimulus over the past several months. And we're about to hear a lot more -- the October 10 reporting deadline for states is looming large. (By the way, you can get a preview of how states have been spending their recovery cash in Josh Goodman's October Governing story.)

But what are the long-term implications of the stimulus? Will it have any lasting impact on states and cities?

A panel of stimulus experts tackled that question at the kick-off session for Governing's Managing Performance conference in Atlanta.

The bottom line? Will the stimulus have a lasting impact? No. Except...maybe.

Everyone on the panel seemed to agree that the American Recovery and Reinvestment Act won't have any long-term fiscal impact on states and localities. "I don't know of any governor who's counting on this money continuing," said David Quam, the director of federal relations for the National Governors Association. "They see this as a one-time thing."

The ARRA influx of cash did delay states' "day of reckoning," as Mike Mower, Utah's planning coordinator and stimulus czar, put it.

But Mark Muro, policy director for the Metropolitan Policy Program at The Brookings Institution, was blunt about the stimulus' ultimate effect: "I don't think ARRA will be seen as transformative at all," he said. "I think it will be seen as one of the last gasps of federal business-as-usual, a highly visible case-study of the way we've delivered government services for the past 30 years."

So, okay, no movement of the tectonic plates when it comes to states' fiscal picture. But there is one way that the stimulus may change government for the long-term: accountability. The reporting and transparency required by the ARRA may fundamentally shift the way states and cities report on how they deliver services. "I do think we're starting to see a trend" toward great accountability, said Quam. "If it's done right, I could see this having a long-lasting effect."

Quam also said the working relationship between states and the federal government has improved dramatically. "I'm hopeful that the cooperation that's come from working together to create this [reporting system] is actually a model for building a relationship that, instead of being coercive, is actually cooperative."

So, the stimulus: a necessary one-time shot in the arm for state budgets. But maybe the beginning of a long-term evolution toward better accountability and an improved give-and-take federalism.

Or maybe not...

Why Washington, D.C. Is Rich

To live in Washington, D.C., is to have friends and family in other parts of the country. And while talking to people I know elsewhere, I've made the point many times in the past year that this area has not been hit by the recession to the same extent as San Francisco or St. Louis or Minneapolis or Boston or wherever they may be.

That's because the share of the nation's wealth that we spend here -- typically about one-fifth -- has gone up thanks to the $787 billion stimulus package and other deficit-builders.

Now, not all that money is actually spent here, of course. We've written time and again about how states, cities and counties are getting and spending their share of the stimulus. But the money is appropriated here. Which means that we continue to have enormous numbers of lobbyists, even though their ranks have supposedly shrunk a little lately. The Washington Post reported recently that the number of lobbyists is down below 2001 levels -- but we still aren't talking Wall Street or Detroit-style job losses here.

The Partnership for Public Service this month released a report indicating that the federal government will need to hire 270,000 workers to replace retirees and staff expanded programs over the next three years. That's going to translate into roughly 120,000 new jobs here in the D.C. area alone.

This steady economic activity and job creation translates into the nation's greatest concentration of wealth -- at least among young workers, if a new Nielsen study is to be believed. This metro area now contains an incredible 16 of the top 50 counties for 25-to-34 year-olds making $100,000 or more.

It's easier to get into most area restaurants than it was two years ago. But two years from now, it's going to be a lot harder scoring a good table around here than it will be just about anywhere else in the country.

Your tax dollars at work.

posted by Alan Greenblatt

Story Behind the Story: Making the Stimulus Czar Calls

One of the first things Governing's editors taught me when I started here four years ago is that when reporting a story you have to think long and hard about where you call. We have plenty of options: The United States has 50 state governments, 3,068 counties and 19,429 cities, towns, villages, etc.

If I'm writing about health care, or economic development or law enforcement, I could call almost any of those places and hear the government talk proudly of their novel accomplishments. But, there's a good chance that Sheboygan, Wisconsin's program is the same thing that Cheyenne, Wyoming was doing five years ago or that Portland, Maine is merely imitating Portland, Oregon.

The message from Governing's editors is that you don't call up any old government and breathlessly report that whatever it's doing is the next big thing. Rather, you dig until you find some place that is really doing something others aren't -- or doing something better than other places -- and then write about that.

So, I faced an atypical question when reporting a story for October about the economic stimulus: Where should I call when every state, on the surface, is doing the same thing?

How Many Jobs Does a Playground Make?

posted by Ellen Perlman

"When it comes to jump-starting the economy, a playground isn't going to cut it," according to a story in the Virginian Pilot today.

That's what U.S. Housing and Urban Development officials told the Norfolk City Council. The city wanted to spend $50,000 in stimulus funds on a playground, but the feds said that really wouldn't do much for job creation.

So the council voted instead to put the $50,000 toward drainage improvements in the South Suffolk neighborhood. (Not all that fun to play in, really)

Then it moved the same amount of money out of the drainage project and into swings and slides. "In other words, you take money out of your left pocket and put it in your right pocket," Vice Mayor Curtis Milteer Sr. said.

Hmm, is this how it's going down around the country? Other examples out there of projects being rejected for funding or of cities or states moving the money around?

The Role of Technology in the Stimulus -- And After It

posted by Zach Patton

Government technology is undergoing a shift unlike anything else in the past decade -- or perhaps ever. The federal stimulus plan is completely overhauling how governments will use technology to monitor how their recovery funds are being spent.

As Governing's annual Managing Technology conference kicked off in Minneapolis this week, all talk was on the stimulus and the role technology will play as states disperse and track their recovery spending. Not since the run-up to Y2K have states focused so singularly on a particular technology initiative. And, given the aggresive timeline for this project -- states must begin reporting their data on the federal www.recovery.gov site in October -- this may indeed turn out to be an effort of unprecedented scale.

"Recovery.gov could be the game-changer in state government," said Gopal Khanna, the Minnesota CIO and current president of the National Association of State Chief Information Officers, who welcomed the Governing conferees to Minneapolis. States will be scrambling to meet the stringent data-reporting requirements of the stimulus, he said, but the effort will ultimately have a much longer-lasting impact than the two-year period mandated by the American Recovery and Reinvestment Act. "The big effect of Recovery.gov will be seen after those two years are up. We're creating an environment that is more effective and efficient."

Tom Hanson, the commissioner of Minnesota's office of management and budget, echoed that sentiment. "We're not going to create a whole new structure that's just going to last for the next two years." This initative has the power, he said, to fundamentally change the way Minnesota and other states provide data to citizens.

For some -- or even most -- states, the push for fiscal accountability isn't a new notion. "Transparency issues didn't just start in February of this year," said Mark Testoni, the president of SAP Public Services, who spoke on a panel with government officials. "In many places, these initiatives date back prior even to Y2K. What ARRA is creating is a new impetus, a new drive focused on outcomes.  It's not just, 'Where is my money going?' It's, 'What am I getting for it?'"

Take Maine, for example. That state has been providing publicly available spending data for years, said Maine CIO Richard Thompson. But the new federal recovery outlines are forcing the state to rethink the way it's been handling information. "We had an approach that was really kind of static," Thompson said. "It was, 'We'll provide you the information we think you'd like to see, and if you'd like more, you can fill out a Freedom of Information request.' Now, there's been a sea-change."

Needless to say, when states are overhauling their information systems on such a massive scale, there are challenges. Chief among them, according to Khanna, are security concerns, which he refers to as "the sleeper issue."  When states are collecting this much data -- and making it publicly available -- they must make every possible effort to ensure that personal information remains private.

There's another concern, too. As states work to provide all this data about how they're doing, some of the information will, inevitably, make the state look bad. "It's definitely a two-edged sword," said Thompson. "It shows our warts as well as our bright spots. We've had to just say, 'That's okay.' It helps us see where we have work to do." The key, he said, is to provide citizens with honest, unencumbered, unbiased information about how their taxpayer dollars are being spent. "The minute you start using this as a promotional tool, it loses its impact. It becomes sales pitch."