$17 Billion in Federal Stimulus Funds Persuade Gov. Perry to Change Mind

By Eileen Schwartz
February 25, 2009

After strongly criticizing President Obama’s $787-billion economic stimulus package, Texas Gov. Rick Perry (R) has agreed to accept all $17 billion of the state’s earmarked federal money. The big question now is where and when the money will be spent.

The new interchange at U.S. 290 and U.S. 183 will be paid for in part by the stimulus plan. Image courtesy CTRMA..

The Texas Transportation Commission and the State Legislative Budget Board are both meeting to discuss how to distribute the monies and put Texans back to work; but it is unclear when plans for all specific projects will be announced. At least $2.2 billion will go to the Texas Dept. of Transportation for roads and bridges. TxDOT spokesman Chris Lippincott says the agency has given the Texas House Select Committee of Federal Economic Stabilization Funding a project work list.

“The department staff will eventually narrow this $2.2 billion to projects requiring $1.2 billion,” Lippincott adds. That $1.2 billion is the amount immediately available. Among the larger projects on the TxDOT list is $130 million for an interchange ramp between U.S. 290 and U.S. 183 in Austin. The Central Texas Regional Mobility Authority, an Austin-based government agency created in 2003 to implement innovative, multi-modal transportation solutions, would kick in $30 million to complete the project.

The state must obligate half the money within 120 days, and the remainder within a year. Lippincott believes these monies will be very effective in stimulating jobs. “It’s important to remember that we are implementing economic policy—not transportation policy,” he says. “The bill is designed to put shovels in the dirt and money in pockets of Americans quickly.”

State Sen. Kirk Watson (D, Austin) urged TxDOT last fall to consult local groups about transportation projects that could be launched immediately. “This is a great opportunity for TxDOT to show how it can work well with the Texas Legislature,” Watson says.

David Bloxom, president of design-build general contractor Speed Fab-Crete, Fort Worth, says he doesn’t think that the stimulus package will ultimately create additional jobs, “but it might help stop the bleeding.” He says that states with shovel-ready projects already on the books—such as Texas—will benefit most.

“The Southwest Parkway toll road that will eventually run into downtown Fort Worth will be jump-started from these funds,” Bloxom says. States such as California that don’t have projects already authorized “could be hardest hit,” he adds.

Texas, by contrast, has been thinking ahead. Deirde Delisi, chair of the Texas Transportation Commission, which oversees TxDOT, sent a letter on Nov. 19 to Congress listing $6.2 billion ready-to-go projects.

The $17 billion in federal funds allotted to Texas includes—under energy and environmental programs—$236 million for weatherization and $342 million for the Clean Water and Drinking State Revolving Funds, or SRF, which provides grants to states for wastewater treatment projects; as well as energy tax cuts.

Another $5.4 billion could go toward public education for the next two years. Millions more will go to school districts for various programs, however, exactly how this will be distributed remains unclear. The funding to local school districts aims to prevent budget cutbacks and layoffs and provide school modernization.

Texas Education Commissioner Robert Scott is awaiting direction from federal education officials. He adds that the money might go for technological equipment and repairing schools damaged by the 2008 hurricane season.

Scott, head of the Texas Education Agency, was selected to head a 10-member task force to develop education-recommendations that could be carried out during the first 100 days of the Obama administration. The money might go for technological equipment and repairing schools damaged by the 2008 hurricane season, Scott says.

Gov. Perry was skeptical at first about taking stimulus money, not wanting to burden Texas taxpayers with future debt. Watson is more pragmatic: “use it or lose it” to other states.

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