We know $787 billion in taxpayer-supported funding will go out to the states to jumpstart the weak economy. Washington is eligible for more than $4.5 billion in federal funding through fiscal year 2011, according to the Council of State Governments. That figure may grow with grant opportunities and tax provisions, enabling Washington to receive about a $7 billion piece of the $787 billion pie. But only about half a billion dollars is slated for transportation infrastructure projects expected to drive private sector jobs.

According to the state’s stimulus Web site, federal funds would be used to modernize Washington’s infrastructure, enhance energy independence, expand educational opportunities, increase access to health care and provide tax relief. The White House estimates the package will sustain or create nearly 75,000 jobs here.

Renee Radcliff Sinclair, executive director of congressional and public affairs for the Northwest Region of the U.S. Chamber of Commerce, says the only concrete monies going to directly traceable private sector job creation is the $492 million that Washington will receive and use for transportation infrastructure projects. Of that, $172 million will go out for bid by July 2009, according to the Washington State Department of Transportation. Another $168 million will go out for bid by end of 2009.

The largest project is the addition of HOV lanes on I-5 from the Port of Tacoma Road Interchange to the King County line. The remaining $152 million will go to local governments for surface transportation projects that could be put out to bid to local private sector transportation constructions companies or be used by local governments to maintain surface roads with existing local government employee resources.

Boosting Transportation Infrastructure
AWB President Don Brunell says Washington benefits from the stimulus package in a couple of ways. One is the money the state will receive for transportation infrastructure projects.

“Not only will this create private sector jobs, it will address serious infrastructure deficiencies in Washington. We’re the number one exporting state per capita. With so many of our exports coming from eastern Washington, it’s a challenge to get time-sensitive products to our ports for distribution,” he said. “For example, Washington is the number one cherry supplier to Japan. That product must be moved expeditiously to stay fresh. The transportation infrastructure improvements funded by the stimulus package will begin to alleviate this problem while creating private sector jobs.” 

Secondly, he says, Washington will receive about $3 billion for health care and unemployment expenses. “This one-time infusion will help our state deal with its budget deficit. Granted this is temporary relief but it will help avoid the need for new taxes now and fill the significant budget gap.”

Sinclair says the Chamber supported the effort to create and pass the federal stimulus package because the country needed a quick fix. “We were glad to see the stimulus package pass and relief on the way to businesses but would have liked more money directed at infrastructure projects and less on creating bigger government.”

A a former Washington state legislator, Sinclair says there’s a need to create one time opportunities for job growth and economic support rather than giving money to extend current systems that individual states will likely not be able to continue affording once the federal stimulus monies are gone.

Risk vs. Reward
State House Republican Leader Richard DeBolt, R-Chehalis, agrees that economic development is key to a brighter future in Washington but points out, “There is some risk in the approach of attempting to create jobs and stimulate capital investment by increasing government spending, especially if you’re borrowing money or raising taxes to do it.

Money removed from one part of the economy and placed somewhere else may not actually result in job growth. When looking where to place funds, the best place government can look is long-term investment in infrastructure and new technology, and provide capital that will encourage additional investment and long-term structural changes to our economy.

The same is true of how government deals with business through policy and regulation. By creating a hospitable and predictable business climate, entrepreneurs know what the long-term business climate will be and will invest accordingly.”

Additionally, nationwide, there is about $60 million available through the federal stimulus package in competitive grants for ferry infrastructure from the National Ferry Transportation System, $8 billion for passenger rail infrastructure and $1.5 billion for supplementary discretionary funding for highways from the United States Department of Transportation, according to Sinclair. WSDOT says it will pursue both the ferry and passenger rail funding, perhaps resulting in more private sector job opportunities. 

 

Additional resources or information

• American Recovery and Reinvestment Act Web site: www.recovery.gov

• Washington state Recovery Web site: www.recovery.wa.gov/

• Council of State Governments: http://www.csg.org/

• The U.S. Chamber of Commerce say there is $290 billion in tax provisions in the stimulus
package for which businesses in Washington and nationwide are eligible, including:

   o $23 billion in tax breaks for the purchase of equipment for renewable energy;

   o Extension of an existing tax break until 2013 for businesses that produce or make    equipment for generating wind and wave energy;

   o Cancellation of the indebtedness provision, which provides financial incentives for businesses to restructure, reduce debt and grow;

   o Depreciation acceleration for 2009 capital expenses tax provision that would give business a financial incentive to purchase and put into service immediately new equipment, buildings and other capital expenditures; and

   o Extension of a small business tax provision (for those with less than $15 million annual revenue) from two to five years that broadens the net operating loss carry back (significant to small business but has minimal impact for medium and large businesses that generate 95% of our nation’s tax revenues vs. 5% for small business).