National leaders are saying the United States is facing its biggest economic crisis since World War II. The new president and congress are answering the crisis with an economic stimulus package that exceeds an $800 billion price tag. Backers say the package will save or create over three million jobs and give most Americans tax cuts. Long term, it is designed to stimulate energy, health care, education.
But as national leaders debate, the question around most dinner tables is simple: How will my family benefit? What, if anything, could this mean to Blount County?
And, if Blount County can snare a share of the package, what will the money be used for?
County and city leaders in Maryville, Alcoa and Blount County are not sitting by idly in regards to the yet-unpassed stimulus package. They are preparing their requests to bring some of that money home.
“If we don’t line up to get it, someone else will,” Alcoa city manager Mark Johnson said.
State Sen. Doug Overbey said state lawmakers won’t know for sure what the package holds for Tennessee until the U.S. Senate deals with it. “The expectations are that Tennessee may get as much as $3.8 billion over two years. With much of it, there will be strings attached by the federal government,” he said.
The buzz words for those preparing proposals for the state or national part of the funds have been consistent: Projects must be “shovel ready,” or able to be up and running in 90 days to six months. Projects must include infrastructure. Projects should have a “green” component. And projects must create jobs.
Sen. Overbey said the best information he’s obtained so far is much of the funding will be tightly earmarked for projects outside of the state budget with only part of it available for use as legislators and the governor decide.
Overbey said there is talk that perhaps there will be as much as $400 million for legislators to decide how to spend it. “There is good and bad with that because whatever the federal government can give, it can then take away,” he said. “If we used this money for ongoing budget expenses, we could be digging ourselves a hole two years off.”
The senator said he hoped proceeds from the stimulus package could go to cities and counties all across the state for their local needs so they could make decisions about their priorities. “Just looking at the senate district I represent, it would seem our priority would be for school construction. The systems in Blount County and Sevier County have real building needs,” he said.
Johnson said the City of Alcoa is preparing to get in line to get some of the federal money. The city has plans to build a pedestrian bridge to span the U.S. 129 Bypass and connect the Greenway beside the Alcoa Municipal Building with walking trails in the neighborhood off Louisville Road, he said.
The city manager said stimulus money could also help pay for the boulevard into the planned Research and Development Park on the former Jackson Farm just off East Broadway Avenue in Alcoa.
“The pedestrian bridge is shovel ready to go, as is the boulevard into the research and development park. We have more of it engineered and all we have to do is extend the contract with the contractor and build more of it, so it’s shovel ready,” he said.
Johnson said if there’s time to refine engineering on some projects, Alcoa may apply for other funding. There is also funding for educational expenditures and that could mean money to help build the new Alcoa High School.
“If there’s some time for us to refine engineering on a couple other things, we’ll be looking at that. I’m not sure what the bill says with regard to how much of that could be for capital. We’re in the planning stage of a new high school facility,” he said. “There’s been talk of an initial round of ‘shovel ready’ projects and then a Round II, but we’re not anywhere close to being ready to break ground on the high school. We’ve got a year’s worth of architectural work left. If there’s another round of money later on, we would certainly line up for that as well.”
Johnson said the size of the stimulus package may be deceiving once every state gets some of it. “It sounds like a lot of money but when it gets spread out to everybody, it won’t be as much as everyone thinks it will,” he said.
The city manager said the important thing to remember is the money shouldn’t be used for recurring expenses, but it could still be beneficial to help finish local projects.
Maryville city manager Greg McClain said it could be a while before any stimulus package money gets to Blount County. “It has passed the House and now it goes to the Senate, and it will probably go to committee, assuming the Senate passes it, and they’ll negotiate numbers,” he said. “We’re not positive on the numbers, but we know there’s money for education and transportation. Those are big pieces of it.”
McClain said Maryville city officials have met with TDOT to get an understanding of how that money would be divided. “As we understand it, TDOT would get $500 million of $600 million for projects and $100 million would to go regional transportation planning organizations,” McClain said. “We’re part of the Knoxville RTPO. (RTPO is) looking for ‘shovel ready’ projects. That will probably be a relatively small list.”
McClain said it takes time to purchase the right-of-ways for projects like schools, so the list of ‘shovel ready’ projects will probably be small.
On the education side, Maryville has already passed on it’s project list. “I think Maryville could get $2.128 million over two years, and, of that, $669,000 is for capital projects. That is all subject to change after the Senate votes, however.”
McClain said the $669,000 could go to help pay for existing school maintenance and repairs. “It would be up to the school board to decide how to spend it,” he said.
Maryville Schools director Stephanie Thompson said the education money in the stimulus package is divided three ways. The categories include funding for capital expenses, Title I funding to assist low-income students and money to assist students in special education, she said.
Blount County ideas
Blount County assistant mayor and finance director Dave Bennett said if the federal government is going to give money for economic stimulus, it should go for public projects like the construction of schools.
“It is absolutely hitting the nail on the head as far as stimulus because it puts people straight to work,” he said. “You’ve got contractors and with contractors you’ve got electricians, plumbers, sheetrock hangers, insulators - all the things you’ve got to have to build a school. This will put those folks to work immediately.”
Bennett said the planned Prospect School near Burnett Station Road would fit the definition of a “shovel ready” project because it could be started within six months.
“Obviously we would welcome any amount of money the federal government would hand down because it’s our taxpayer money,” he said. “Anything they pay for would alleviate what the local taxpayer would have to pay for.”
Bennett said there are three road projects on Highway Superintendent Bill Dunlap’s list that could use stimulus money. “Morganton, Old Niles Ferry and Ellejoy roads are projects that need to be done and have been on our list since 2000,” said Bennett. “We just haven’t had money to do them. Obviously, with road projects, you’ve got right-a-ways, so I don’t know if they could be ready in six months. If so, they would be priority projects as far the county is concerned.”
Blount County Economic Development Board executive vice president Bryan Daniels said the development board is hoping to get $8 million, with one priority being infrastructure work in the research and development park.
“Yes, we’re hoping to get infrastructure money for our technology park because there are more roads and water and sewer systems that need to be constructed and we can immediately contract for those if approved for the stimulus package money,” Daniels said.
Bennett said the stimulus package’s impact would be two-fold. “It would reduce the local money we need to put toward those projects -- like paying for schools. Every amount we can increase that by, that’s money we can use to pay off our debt,” he said.
The county finance director said the other impact of the stimulus money would be in the multiplier effect of government spending. “If we spend $10 million on schools, folks would go to work immediately, and those moneys would buy food and purchase goods. It comes back in sales tax dollars, and we spend it again, and it turns over again,” he said. “The cycle gets better in terms of people having money to spend because they’re back at work.”
Johnson said the funding could help get some of these projects out of the gate because local governments simply do not have money now and won’t have money in the foreseeable future. “As far as the local economy, it will have a direct impact, not just for citizens of Alcoa, but Blount County, with increased payrolls and continued payrolls for contractors to get folks back to work,” Johnson said.
McClain said any money infused into the economy would be a positive thing. “It’s going to be hard to quantify what the effect would be,” he said. “Any money infused into the economy would be a positive.”
Daniels said moving the infrastructure along in the research and development park would make it easier to recruit companies to the development, which will mean more jobs.
Overbey said the $800 billion stimulus package is unusual. “I don’t think we’ve seen anything like this,” he said. “The House bill totals $819 billion dollars.”
Johnson said he had never encountered a stimulus package of this magnitude in his career. “Maybe there was something like this in the pre-World War II era, back in FDR’s time, but I haven’t seen anything like this,” he said.
McClain said he had never seen a federal stimulus bill this large. “This experience is unique to all of us alive at this point in time. I don’t think any of us have ever experienced this type of economy,” he said.
Daniels said nobody at the economic development board has seen such a large federal initiative to jumpstart the economy. “Our understanding is the stimulus package is to help stabilize our weak economy and provide a floor for our economy so it will not decline anymore,” he said.
Bennett said the bill could spur construction on a grand scale but paying for it could be an issue. “It concerns me greatly as a federal taxpayer the amount of money we’re talking about. We’re talking about $816 billion. I don’t see how we can afford it,” he said.
The finance director said some of the expenditures in the bill don’t appear to stimulate the economy. “It’s almost like everyone is taking a wish list from the last 100 years and putting it in the stimulus bill just to get it accomplished,” he said. “I don’t agree with that.”
Bennett said that at some point Americans must think about the country’s financial future.
“If we don’t balance the budget and live within our means, it’s going to be a tremendous impact on decades and generations of people,” he said.
Overbey said there are potentially two negatives to the package. “Nationally, what if it doesn’t work? There may be a lot of things in this package that may not stimulate the economy and is just spending for spending sake,” he said.
A stimulus needs to be used where it creates jobs and the pay generated by these jobs turns over several times within the economy, Overbey said. “I think it remains to be seen whether this is truly a stimulus package. That’s been a concern of lawmakers in Washington who didn’t vote for it,” he said.
“The second concern is that if -- on the state level -- we try to use what is clearly one- time money for our recurring expenses. If we do that, we will only be building in a gap in our budget after about two budget years.”
Johnson said that, in the long term, the federal government has to come up with the money somewhere, and it has to be paid back. “We’re sort of borrowing, but that’s what you have to do sometimes to get the economy stimulated,” he said.
Daniels said the concern the economic development folks have is how much debt this package will place on the country’s national gross domestic product.
Bennett worried how the government is going to pay for the stimulus package. “We’re seeing trillion dollar deficits in the federal government,” he said. “I worry that, in five or six years, there will be rampant inflation. If we put all this money into the economy and, all of a sudden, we see inflation, I’m really, really concerned about what we do then.”
Bennett said local and state governments are required by law to pass balanced budgets. “You live within your revenue. When you have deficits, you’re spending more than you take in,” he said. “Someone has to pay for that someday.”
McClain said if the stimulus package is held up in government bureaucracy, it may be too late to truly stimulate the economy.
“If they’re going to do this, it needs to be expedited in a very deliberate way,” McClain said. “The downside is all this money getting held up in bureaucracy and not hitting the street any time soon.”
When it hits, however, local leaders appear ready with plans for a slice of the pie.