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By Sean Mussenden and James Romoser
Media General News Service
WASHINGTON—As President Barack Obama on Tuesday signed an economic recovery package that will send at least $6 billion to North Carolina, state officials scrambled to figure out how to spend the expected windfall on roads, schools, health care for the poor and other needs.
Gov. Bev Perdue, D, said that her office was combing through the massive bill to determine exactly how much the state is eligible for, and had not yet determined which specific projects in the state — new highway construction and others – would benefit from the new stream of federal funding.
The $787 billion recovery package includes a broad mix of spending programs and tax cuts aimed at juicing the slumping the economy and creating new jobs, coupled with assistance for those hurt most by the slump.
More than a third of the package — $288 billion — is tied to tax breaks intended to stimulate the economy: breaks for people who buy new cars and homes this year, bigger tax breaks for college tuition and an increase in tax credits for the poor.
The package also expands unemployment benefits for laid off workers and increases federal funding for training programs, and increases assistance to the poor through the federal school lunch program and child care programs.
Signing the bill in Denver, Obama said the economic recovery package represented "only the first part of the broad strategy we need to address our economic crisis."
White House economists predicted that the plan would create or save 3.5 million jobs nationally over the next two years — including 105,000 in North Carolina.
The state shed more than 100,000 jobs just last year and has the eighth highest unemployment rate in the nation, 8.7 percent.
The economic downturn and declining tax revenues has left a hole in the state budget for this year that is projected to be between $1 billion and $3 billion.
A similar gap is expected next year, which means deep cuts because the state is constitutionally mandated to have a balanced budget.
The recovery package will send an estimated $1.4 billion to North Carolina to help balance the budget for the next two years, the vast majority of which the state has to spend on education.
The package also increased the federal government’s share of the cost of Medicaid, the insurance program for the poor that is jointly funded by Washington and state governments, worth an estimated $2.3 billion to North Carolina.
Perdue said the federal money would not be a big enough help on its own and she would have to continue cutting state services and programs.
"I don’t want anyone to be fooled. There are going to be tough, hard decisions made," she said. "Every community in the state is going to feel this pain, regardless of how pleased we are today with the federal stimulus money."
Much of North Carolina’s share of the spending contained in the package will flow through Raleigh for distribution.
On Tuesday, Perdue created a new state office to maximize the amount of money coming to the state and determine where best to spend it.
"Part of what we want to do is look at the legislation with a North Carolina perspective," said Dempsey Benton, a longtime state bureaucrat Perdue appointed to lead the Office of Economic Recovery & Investment.
State leaders will have to work quickly to determine how to spend much of the money provided in the bill. For example, the $736 million for highway funding
North Carolina is eligible for requires that half of the money be spent on projects ready to go within four months, and the other half within a year.
The governor’s office has produced a long list of "shovel ready" projects eligible for funding under the bill, but said it had not yet targeted any for funding.
"State’s are going to have some issues trying to interpret all this, especially given the short time frame," said Robert Strange, a policy analyst with the National Conference of State Legislatures.
Local government leaders were also working Tuesday to secure a piece of the recovery package pie, either by lobbying state leaders or preparing applications for programs in the bill that allocate money directly to local governments.
Winston-Salem City Manager Lee Garrity said he does not yet know what stimulus package programs the city could qualify, but they were preparing applications just in case.
"We’re erring on the side of, if it’s not excluded, we’re going to at least prepare internally as best we can," he said. "We’re making an educated guess at this point."
Jane Cole, a county employee who acts as a liaison for the county at the state level, said she’s gathering more information today on how the stimulus package could affect Forsyth County.
"We are pushing forward and are trying to get every cent we can," she said.
Sean Mussenden can be reached at 202 662-7668 or at smussenden@mediageneral.com
Media General News Service
WASHINGTON—As President Barack Obama on Tuesday signed an economic recovery package that will send at least $6 billion to North Carolina, state officials scrambled to figure out how to spend the expected windfall on roads, schools, health care for the poor and other needs.
Gov. Bev Perdue, D, said that her office was combing through the massive bill to determine exactly how much the state is eligible for, and had not yet determined which specific projects in the state — new highway construction and others – would benefit from the new stream of federal funding.
The $787 billion recovery package includes a broad mix of spending programs and tax cuts aimed at juicing the slumping the economy and creating new jobs, coupled with assistance for those hurt most by the slump.
More than a third of the package — $288 billion — is tied to tax breaks intended to stimulate the economy: breaks for people who buy new cars and homes this year, bigger tax breaks for college tuition and an increase in tax credits for the poor.
The package also expands unemployment benefits for laid off workers and increases federal funding for training programs, and increases assistance to the poor through the federal school lunch program and child care programs.
Signing the bill in Denver, Obama said the economic recovery package represented "only the first part of the broad strategy we need to address our economic crisis."
White House economists predicted that the plan would create or save 3.5 million jobs nationally over the next two years — including 105,000 in North Carolina.
The state shed more than 100,000 jobs just last year and has the eighth highest unemployment rate in the nation, 8.7 percent.
The economic downturn and declining tax revenues has left a hole in the state budget for this year that is projected to be between $1 billion and $3 billion.
A similar gap is expected next year, which means deep cuts because the state is constitutionally mandated to have a balanced budget.
The recovery package will send an estimated $1.4 billion to North Carolina to help balance the budget for the next two years, the vast majority of which the state has to spend on education.
The package also increased the federal government’s share of the cost of Medicaid, the insurance program for the poor that is jointly funded by Washington and state governments, worth an estimated $2.3 billion to North Carolina.
Perdue said the federal money would not be a big enough help on its own and she would have to continue cutting state services and programs.
"I don’t want anyone to be fooled. There are going to be tough, hard decisions made," she said. "Every community in the state is going to feel this pain, regardless of how pleased we are today with the federal stimulus money."
Much of North Carolina’s share of the spending contained in the package will flow through Raleigh for distribution.
On Tuesday, Perdue created a new state office to maximize the amount of money coming to the state and determine where best to spend it.
"Part of what we want to do is look at the legislation with a North Carolina perspective," said Dempsey Benton, a longtime state bureaucrat Perdue appointed to lead the Office of Economic Recovery & Investment.
State leaders will have to work quickly to determine how to spend much of the money provided in the bill. For example, the $736 million for highway funding
North Carolina is eligible for requires that half of the money be spent on projects ready to go within four months, and the other half within a year.
The governor’s office has produced a long list of "shovel ready" projects eligible for funding under the bill, but said it had not yet targeted any for funding.
"State’s are going to have some issues trying to interpret all this, especially given the short time frame," said Robert Strange, a policy analyst with the National Conference of State Legislatures.
Local government leaders were also working Tuesday to secure a piece of the recovery package pie, either by lobbying state leaders or preparing applications for programs in the bill that allocate money directly to local governments.
Winston-Salem City Manager Lee Garrity said he does not yet know what stimulus package programs the city could qualify, but they were preparing applications just in case.
"We’re erring on the side of, if it’s not excluded, we’re going to at least prepare internally as best we can," he said. "We’re making an educated guess at this point."
Jane Cole, a county employee who acts as a liaison for the county at the state level, said she’s gathering more information today on how the stimulus package could affect Forsyth County.
"We are pushing forward and are trying to get every cent we can," she said.
Sean Mussenden can be reached at 202 662-7668 or at smussenden@mediageneral.com