RI slow to spend millions in stimulus funding

AP News
Posted: Nov 23, 2009 7:57 AM

Gov. Don Carcieri's administration has failed for months to spend $20 million meant to insulate poor people's homes against the winter chill and put unemployed people to work during one of the worst economic crises since the Great Depression.

All the while, the Republican governor has criticized President Barack Obama's $787 billion stimulus plan as ineffective in creating jobs even though the state isn't spending all the money it's been given. Half the funding had arrived by July, but state officials say it will only start flowing this week to agencies ready to spend it.

Rhode Island was among five states that had not started spending their weatherization funding money by late September, according to an analysis of federal records by the National Association for State Community Services Programs. The others were Alaska, Indiana, Vermont, Wyoming and the District of Columbia.

Jeanne Gattegno, president of Westbay Community Action, a charitable agency that helps Kent County residents become self-sufficient, attributed the delays to complex rules governing the stimulus program and state officials trying to cope with a sudden influx of cash.

"We were surprised it took this long, but it's here now at last," Gattegno said.

While other states also have struggled to start spending, the need for work is particularly desperate in Rhode Island, where unemployment stood at 12.9 percent last month, better than only Michigan and Nevada. A $20 million spending program would offer relief to at least some workers, said Leonard Lardaro, an economist at the University of Rhode Island.

"It's always better sooner rather than later assuming that you're not just throwing the money away," he said.

The stimulus bill enacted in February gives states about $5 billion to seal homes against the cold. Workers can apply weather strips to old doors, fix old heaters and boilers and inject modern insulation into lofty attics and drafty walls.

Rhode Island desperately needs the help. Economists expects a deep recession to push unemployment in the state to nearly 14 percent next year, and the job losses have been devastating for workers in construction and the building trades.

Sen. Jack Reed, D-R.I., said he was frustrated by the slow spending, especially since he said his constituents are worried about losing their jobs and providing for their families.

"The No. 1 problem is jobs," Reed said. "This money was designed to get people working as quickly as possible. That could have put some people to work."

Among those hoping for a job in energy conservation is Christopher Harrell, who moved to Rhode Island last year. After months of searching, the 35-year-old found a job in sales engineering before getting laid off in July. He now spends his evenings in an intensive class learning how to make homes more energy efficient.

"When I came here, I was greeted by a lot of fantastic people," said Harrell, who might benefit from the stimulus-funded work. "Very few of them had work to offer."

The delays are attributable to multiple problems, some caused by state government, others not.

The state's Office of Energy Resources filed its application on time in mid-May, but afterward state workers lost an electronic code allowing them to access an account containing the federal funding. As a result, Carcieri's administration was initially unaware that millions of dollars were ready and waiting.

Jen Stutsman, a spokeswoman for the U.S. Department of Energy, said the agency helped Rhode Island correct the problem in August.

Carcieri spokeswoman Amy Kempe described the lost code as a minor clerical error and said it didn't hamper the weatherization program. The roughly half-dozen community action programs, or CAPs, that will ultimately administer much of Rhode Island's stimulus funding still have money to conduct the work through other sources, she said.

The state had received half of its stimulus funding by July 10, but local authorities were tangled in a bureaucratic dispute with the federal government and didn't spend.

The conflict centered over a Depression-era law requiring contractors to pay wages equal to those prevailing locally for public works projects, and the stimulus law applied it to weatherization projects for the first time. The U.S. Department of Labor did not establish those wage rates until late August.

Federal officials say the wage determinations should not have stopped state governments from spending.

Gilbert Sperling, who heads the weatherization program for the U.S. Department of Energy, told states in a July 10 letter they could begin spending their weatherization money before the wage decisions were made. If workers were paid less than the soon-to-follow wage rules, those workers could be reimbursed after the fact, he wrote.

Carcieri's office like others in many states opted to wait because it worried paying workers after the fact would create accounting chaos.

"They gave us that advice, but we felt it was more important to have all the information in working with the CAP agencies rather than burden the CAP agencies and the state system to retroactively pay people," Kempe said.

Carcieri's office recently signed contracts with local community action programs that will identify homes in need of help and arrange for the weatherization work.

Given the uncertainty, Bob Gruttadauria, the owner of Greenwich Insulation Inc., said he has resisted hiring more workers to supplement his company, which does weatherization work. He was interested in hiring at least two more workers to supplement his shop's staff of about six.

"Until I see it, I don't really need the guys," he said. "You don't hire until you have the work."