Stimulus package won’t meet expectations

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Look at how Obama's plan will impact LaRue County

By Linda Ireland

Kentucky will receive about $3 billion for health care, education and road construction over the next two years, according to a news release from Gov. Steve Beshear.

The $787 billion federal stimulus bill, called the American Recovery and Reinvestment Act, will direct $924 million to education in the state, $421 million for road and bridge construction and about $990 million for Medicaid.

The state should receive about $120 million to address revenue shortfalls expected in the next two fiscal years.

But that doesn’t mean LaRue Countians will get everything they hope for in government handouts.

The stimulus money is to be distributed to states and areas designated as metropolitan planning organizations, LaRue County Judge-Executive Tommy Turner said.

There are only three areas in Kentucky that meet the population density standards: Lexington, Louisville and northern Kentucky.

“The state then is charged with determining how to spend the money it receives and how, if any, will be filtered down to local communities,” Turner said.

Last week, Turner spent several hours in discussions about the stimulus money and fielding questions about how it will affect the county.

“Of the nearly $3 billion in funds to come, little will be accessible by LaRue County, Hodgenville or Upton - LaRue County’s incorporated cities,” Turner said. “Many mistakenly thought these funds would somehow be divided up among the communities. That doesn’t mean you won’t see projects being done in the communities - improving I-65 or possibly paving U.S. 31E -" but there are no dollars that give us local discretion as to how they will be spent. Hopefully it will help stimulate the economy in some way.”

One program that could prove beneficial to LaRue Countians is Medicaid, Turner said. The state program will receive about $990 million over the next two years.

“The program currently faces a $232 million deficit this year, while demand for services is increasing by about 3,000 people a month due to the economy. In LaRue, we have a fairly large population that qualifies for Medicaid. So, increase in funding for the program will directly affect a large number of LaRue Countians. None of the dollars will flow through local government and will flow through the normal Medicaid Program in Frankfort.”

Schools could benefit from funds rolling back into Title 1, Head Start, technology and school lunch programs. Superintendent Sam Sanders said he did not have enough information available about the funds to comment at this time.

The state also will receive $421 million for highways and bridges.

“At first glace this appears to be an area where we can finally hit pay dirt,” Turner said. “However, only roads and bridges that meet the federal guidelines for federal aid dollars qualify to utilize these funds. No county roads qualify, no city roads qualify, and few state roads qualify. In reality, most all of these funds will be used for interstate and parkway improvements. If I-65 and its six-lane widening project is included, there will be some ‘stimulus’ in our area.”

The state will receive about $12 million for local community development block grants.

“This may be our greatest opportunity to access some stimulus package dollars,” said Turner, adding that $12 million “doesn’t go far spread over all cities and counties in the state.”

There are, Turner said, “a lot of strings attached” to both block grants and loans for water/sewer improvements.

The state is receiving about $71 million for water and sewer projects, Turner said. Recipients will have to pay back interest on any money received.

“One other thought, $71 million sounds like a lot of money,” Turner said. “Yet the city of E’town is upgrading its sewer plant right now. The cost is over $20 million. So, three cities in Kentucky could spend the entire amount allotted statewide.”

In addition, communities will pay interest on the money they receive. They won’t pay back the principal, but the interest over a 20-year period could be substantial, he added.

The state will receive $66 million in job training and workforce development dollars. In the area of public safety, Kentucky will receive about $30 million to combat violence against women and to support criminal justice efforts at both the state and local levels.

One Web site - stimuluswatch.org - lists projects proposed by the 2008 Conference of Mayors. Turner warns residents against reading too much into the projects listed there.

The projects are simply “wish lists” already presented by mayors of larger cities. Some may receive the funding; others may not.

There simply isn’t enough stimulus money available to provide funding for all the projects, he said.

Beshear’s news release said the federal government is creating a Web site to track the dollars and how they are spent.

“... we will have something similar available here in Kentucky,” Beshear said. “These are tax dollars and the public deserves to know how their money is being spent.”